OKDHS Office of Inspector General State Fiscal Year 2012 ANNUAL REPORT

Transcription

1 OKDHS Office of Inspector General State Fiscal Year 2012 ANNUAL REPORT

2 OKLAHOMA DEPARTMENT OF HUMAN SERVICES OFFICE OF INSPECTOR GENERAL P.O. Box Oklahoma City, OK (405) FAX: (405) August 27, 2012 Welcome! It is my pleasure to present the annual report of the OKDHS Office of Inspector General. This reporting period covers July 1, 2011 through June 30, Through reading this annual report, I hope you will gain a better insight and become more familiar with the different functions of the Internal Audit Unit, the Administrative Review Unit and the Investigations Unit. The Office of Inspector General is dedicated to the prevention and detection of fraud, waste and abuse in the expenditure of public funds. In the last year, we have strengthened our efforts to improve communication and interaction among the three units of the Office of Inspector General. Our goal is to both increase efficiency and reduce the exploitation of public resources. I would like to thank you in advance for reading our annual report. Sincerely, Tony Bryan Inspector General

3 Mission The Office of Inspector General oversees and preserves the integrity of OKDHS programs and services through prevention, detection and prosecution of fraud, waste or abuse by OKDHS clients, vendors, employees or the general public. Background In 1962, the OKDHS director formed a 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 OKDHS 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 OKDHS contractors. In 1993, the Oklahoma Legislature authorized the OKDHS director to commission OIG investigative agents as peace officers. In 1996, a further reorganization added the Administrative Review Unit to ensure quality control in OKDHS assistance programs. Organizational Structure OIG is organized to serve three primary functions: reviews and audits for compliance with state and federal laws, rules and regulations quality control audits of the agency s four largest assistance programs fraud-related or special investigations completed for criminal prosecution or internal administrative action by OKDHS The Internal Audit Unit oversees and preserves the integrity of OKDHS programs and services and helps ensure administration of public resources in a fiscally responsible and ethical manner. The Administrative Review Unit is responsible for performing quality control reviews on sampled cases from the assistance programs administered by OKDHS. 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. 1

4 Internal Audit Unit The Internal Audit Unit is comprised of two sub-units, each with different auditing functions. The Internal Audit sub-unit focuses on audits of OKDHS 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 OKDHS accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of management controls and processes. Internal Audit conducts audits of OKDHS 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 OKDHS contractors to track audit findings, evaluate solvency and determine compliance with contract requirements and technical standards. Key Indicators for SFY 2012 Audits for compliance with policies and regulations, for performance and for financial viability Percent of audit recommendations accepted 98.44% Number of audits and desk reviews completed 219 Cost savings identified by audits and desk reviews $191,

5 Internal Audit Highlights SFY 2012 Aging Services Division Older Americans Act/Senior Nutrition Project Upon request, the Internal Audit Unit reviewed internal controls and contract compliance at three Senior Nutrition Projects administered by different Area Agencies on Aging. Auditors identified total questioned costs of $55,475 with an additional questioned cost of $96,482 determined during a follow-up audit in SFY Internal control weaknesses or non-compliance was found in the areas of: cost reimbursement and expenditures, purchasing, inventory, travel authorizations, expense allocation, reporting, budget changes and uncollected meal fees. Older Americans Act/Area Agency on Aging Auditors performed a routine compliance audit on an Area Agency on Aging and found weaknesses in the areas of cost and payroll allocation, expenditure approval and documentation, and interest earned on carryover funds. Auditors identified questioned costs of $31,540. Field Operations Division Adult Protective Services The Internal Audit Unit continued to audit APS functions to identify areas where adherence to policy and procedures should be strengthened including the safeguarding of vulnerable adult assets. In addition, auditors provided requested assistance on two exploitation cases under APS investigation. Supplemental Nutrition Assistance Program - Because electronic benefit transfer cards appeared to be missing, the Internal Audit Unit was requested to review a county s EBT card inventory and related internal controls. Auditors determined that the missing cards were a result of a mathematical error. Oklahoma Child Support Services (OCSS) Contracted services - Upon request, auditors reviewed an incentive plan of an OCSS contractor to determine whether the incentive plan was in violation of applicable laws or the contract. Although auditors determined that the plan was not in violation, the contractor agreed to return $3,729, because part of the plan was discretionary and not tied to work expectations. Support Services Division Auditors performed a routine audit of the OKDHS supply warehouse. Recommendations were made and accepted relating to the accuracy of reports, the disposal of obsolete items, and the identification of possible understocked or overstocked inventory

6 Child Care Audit & Investigations The Child Care Audit & Investigations Unit helps ensure that child care providers are paid correctly according to their contracts with OKDHS and are maintaining a drug-free workplace. The unit also helps ensure that families receiving program benefits have met eligibility requirements. Audits of child care facilities are conducted both randomly and based on complaints received. Such complaints may allege that the facility is keeping client electronic benefit cards or is being paid for children not in attendance. Complaints regarding the client often allege that the household receives benefits for which it is not eligible. The Child Care Audit & Investigations Unit makes recommendations to the Family Support Services Division to cancel contracts based on audit findings. Additionally, licensing violations discovered during an audit are reported to the Oklahoma Child Care Services division for further review and action. When overpayments are discovered and require collection, the unit reports provider overpayments to the Finance Division and client overpayments to FSSD. Key Indicators for SFY 2012 Audits and investigations of child care vendors for claims accuracy and contract compliance Number of new child care referrals received Number of investigative child care audits completed Amount of provider overpayments from investigative audits Percent of investigative audits with overpayments Number of random child care audits completed Amount of provider overpayments from random audits Percent of random audits with provider overpayments Total amount of child care provider overpayments Number of client overpayments discovered during audits Amount of client overpayments discovered during audits Percent of total child care audits with overcapacity Percent of total child care audits with card or pin violations $119, % 44 $59, % $178, $97, % 1.12% 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 OCCS and FSSD. Key Indicators for SFY 2012 Number of child care drug investigations Percent of drug investigations with confirmed findings % 4

7 Administrative Review Unit The Administrative Review Unit conducts mandated quality control reviews in the Supplemental Nutrition Assistance Program, Medicaid, and Child Care Subsidy programs. The unit also conducts Payment Error Rate Measurement reviews of Oklahoma Health Care Authority SoonerCare program cases. Key Indicators for SFY 2012 Quality Control/other measurement review on designated programs SNAP quality control case reviews processed* Medicaid quality control reviews processed* Child Care quality control reviews CMS-PERM case reviews *Includes active and negative action reviews 1, ,296 Best Practices Identified and Deployed SFY 2012 Promoting efficiency The Administrative Review Unit took steps this year to ensure a more streamlined process of requesting and receiving case files selected for quality control review. Beginning in December 2011, the unit began requesting the sample files by ing specific contact people in each county office rather than sending a fax to the office as was previously done. This has ensured that the list is received by the intended recipient and has eliminated the possibility of a delayed response due to a mishandled or incorrectly routed request list. Beginning in April 2012, the unit began requesting that all sample cases be scanned into the OKDHS imaging system instead of having the physical case file mailed to OIG. This has eliminated the possibility of case files being lost in transit and has reduced costs associated with mailing the physical files. Working together The federal procedure for sampling SNAP negative action cases changed for FFY Ahead of this change, the Administrative Review Unit held discussions with staff from the Family Support Services Division policy section regarding the new procedures and how they might affect the SNAP error rate. It was expected that the changes would result in an increased error rate. After these discussions, FSSD was able to issue several training tips and alerts to prepare field staff for the new focus of the SNAP negative action procedures. Collaboration between the Administrative Review Unit and FSSD continues to occur as new trends are being discovered. Embracing change In addition to the quality control reviews of OKDHS benefits cases, the Administrative Review Unit conducts federally required reviews of OHCA SoonerCare Medicaid cases. As OHCA has developed new computer systems and databases for case management, staff in the Administrative Review Unit has successfully learned to navigate and utilize these new technologies to ensure the accuracy of case reviews. 5

8 Reviewing the reviewers The United States Department of Agriculture Food and Nutrition Service 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. Key Indicators for SFY 2012 SNAP Quality Control accuracy audits SNAP quality control case reviews processed* SNAP quality control cases sub-sampled by FNS* Number of federal difference cases accepted due to state reviewer or supervisor error Percentage rate of accuracy *Includes active and negative action reviews 1, % Reviewers in the OIG Administrative Review Unit have consistently maintained a rate of accuracy of above 99 percent on these FNS sub-sampled SNAP reviews over the last five years. 6

9 Investigations Unit The 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 programs. This unit also conducts SNAP trafficking investigations of both clients and retailers and OKDHS 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 interstate match report to locate instances of multi-state concurrent receipt of assistance by a client. Key Indicators for SFY 2012 Referral Management activity summary Total new complaints received and reviewed Percent of new complaints referred to fraud units after preliminary investigation Percent of new complaints closed for cause after preliminary investigation 6, % 64.65% 7

10 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 OKDHS 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. Key Indicators for SFY 2012 Fraud and Trafficking units combined activity summary Cases presented for overpayment calculation Cases presented for administrative disqualification Cases presented for prosecution Average of cases still active at the end of each quarter Total cases closed after investigation with prosecution with administrative disqualification hearing with voluntary repayment agreement and/or disqualification with recoupment with other cause Total internal investigations closed Percent of cases closed with overpayments Closed case restitution/ reimbursement dollars Closed case recoupment dollars Closed case projected savings dollars USDA savings from closed SNAP trafficking retailer investigations only* *Savings to the USDA SNAP program in Oklahoma , , , % $1,938, $2,289, $1,333, $6,332,

11 Benefits Fraud Case Highlights SFY 2012 Okmulgee County An investigation was conducted regarding a client who allegedly failed to report increased income. The investigation revealed that the client failed to report when her earned income increased to a level that made her ineligible for SNAP. This unreported increase also led to the client receiving additional child care assistance that she was not eligible to receive. The FSSD Benefit Integrity and Recovery Section calculated that the client had received $3,463 in SNAP assistance and $1, in child care assistance that she was not eligible to receive. A report was submitted to the Okmulgee County District Attorney s Office and charges of Obtaining Food Stamps by Fraud and Obtaining Welfare Assistance by Fraud were filed against the client. In November 2011, she received a 10-year deferred sentence with supervised probation and was ordered to pay $5, in restitution to OKDHS. Oklahoma County An investigation was conducted regarding a client who allegedly falsified her OKDHS applications for SNAP assistance by failing 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. Her husband was employed at a car dealership. The FSSD Benefit Integrity and Recovery Section calculated that she had received $18,340 in SNAP assistance that she was not eligible to receive. A report was submitted to the Oklahoma County District Attorney s Office, and one count of Obtaining Food Stamps by False Representation was filed against the client. In November 2011, she received a 10-year suspended sentence with the first 100 days to serve in jail and was ordered to pay $18,340 in restitution to OKDHS. Cleveland County An investigation was conducted regarding a client who allegedly falsified her OKDHS applications for assistance by failing 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. Her husband was employed at three different specialty building companies during the time covered by the investigation. The FSSD Benefit Integrity and Recovery Section calculated that she had received $12,236 in SNAP assistance, $98.20 in Medicaid assistance, and $1,000 in child care assistance that she was not eligible to receive. A report was submitted to the Cleveland County District Attorney s Office, and charges of Obtaining Welfare by Fraud and Obtaining Food Stamps by Fraud were filed against the client. In December 2011, she received a threeyear deferred sentence and was ordered to pay $13, in restitution to OKDHS. Kay County An investigation was conducted regarding a client and her spouse who appeared on the Public Assistance Reporting Information System interstate data match report. The investigation revealed that the clients failed to report that they were already receiving SNAP benefits from the State of Wisconsin when they applied for benefits in Oklahoma. The FSSD Benefit Integrity and Recovery Section calculated that the clients received $1,724 in SNAP assistance that they were not eligible to receive. The overpayment has been set for recoupment. The client signed an Administrative Disqualification Hearing Waiver and agreed to voluntary disqualification from the SNAP program for one year. 9

12 Trafficking Case Highlights SFY 2012 Oklahoma County A SNAP trafficking investigation was initiated after OIG was contacted by the Midwest City Police Department. A citizen had reported to them that a client was advertising her SNAP benefits for sale on an internet site. Undercover investigators met with the seller and purchased the SNAP benefits card. After the purchase, a team of investigators arrested the client for SNAP trafficking. Further investigation revealed that the client was wanted on three felony warrants in Missouri. A report was submitted to the Oklahoma County District Attorney s Office, and charges of Trafficking in Food Stamp Benefits and Unauthorized Use of a Computer Network for the Purpose of Obtaining Money and Other Things of Value by Use of Fraud and Fraudulent Representation were filed against the client. She received a five-year suspended sentence and was ordered to pay fines. Threat Protection Case Highlights SFY 2012 Oklahoma County In February 2012, OIG received a report from Oklahoma Child Support Services that a caller had made threatening remarks by phone to a customer service representative at the child support call center. The threatening call included statements such as I m ready to get one of them Ryder trucks and blow up your building! The call included multiple expletives and shouting. The caller who made the threat was a truck driver who had hazardous materials and munitions endorsements. Therefore, the threat was considered viable and both an OCSS office and a District Attorney s Office were evacuated. The assigned agent obtained digital recordings of the telephone conversations and worked with several local police departments to investigate the threat. A report was submitted to the Oklahoma County District Attorney s Office, and one count of Terrorist Hoax was filed against the suspect. In March 2012, the suspect pled guilty to the charge and received a three-year suspended sentence. Internal Investigation Case Highlights SFY 2012 Muskogee County An investigation was conducted into a Child and Family Services Division case worker who allegedly made false entries in a child welfare case she was assigned to investigate. The case worker documented making face-to-face contact with the family and conducting an extensive interview with the parents. However, the parents told another case worker who was investigating a subsequent referral that no previous child welfare investigation had been done and they had not spoken with another worker. The OIG investigation substantiated the allegation that the first child welfare case worker had made false entries in at least two cases. The case worker resigned. A report was submitted to the Muskogee County District Attorney s Office, and charges of Public Official Neglecting Duty and False Statement During State Investigation were filed against the case worker. In July 2011, she pled guilty to both charges and received a one-year suspended sentence on each charge and a $1,000 fine. Tulsa County An investigation was conducted into a Developmental Disabilities Services Division case manager who allegedly made false entries in the case record of a consumer in her caseload. The case manager had been documenting monthly visits with the consumer, but a report was received that the case manager was not actually conducting those visits. Initial inquiries led to several other case records that may have false entries. The OIG investigation substantiated the allegation, and the case manager admitted to making 12 false entries on various case records. While no criminal violations occurred, the employee had violated OKDHS policy, and the matter was referred for administrative handling. In July 2011, the case manager resigned. 10

13 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: 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. Texas-Arkansas-Louisiana-Oklahoma-New Mexico Police Accreditation Coalition: OIG is a member of this regional organization of law enforcement agencies who work together to develop policies and practices based on the internationally recognized standards published by the Commission on Accreditation for Law Enforcement Agencies. Public Assistance Reporting Information System: OIG is a participating member of this data matching system, and the Chief Investigative Administrator is on the PARIS Board of Directors. Regional Organized Crime Information Center: OIG is a member of this organization of criminal justice agencies who work together to combat multi-jurisdictional criminal activities. Certified Public Manager: 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: 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: 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: 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: OIG is a member of this national organization that is an affiliate of the American Public Human Services Association. The organization provides policy and practice leadership on a variety of human service issues. 11

14 Human and Financial Resources Human Resources OIG staffing distribution at end of SFY 2012 Internal Audit Unit employees Administrative Review Unit employees Investigations Unit employees Total OIG employees* *Includes Inspector General Financial Resources OIG financial resources SFY 2012 Total OIG expenditures* $5,385, OIG expenditures as a percent of OKDHS expenditures* Less than 1% *Source: OKDHS Finance Division Report Ending June 30, 2012 Contacting OIG Reports of suspected OKDHS 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 may 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

15

16 S12073 OKDHS Issued 10/12 This publication is authorized by the Oklahoma Commission for Human Services in accordance with state and federal regulations and printed by the Oklahoma Department of Human Services at a cost of $ for 30 copies. Copies have been deposited with the Publications Clearinghouse of the Oklahoma Department of Libraries.