Fraud Prevention Investigation Program Guidelines

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Program Guidelines

Minnesota Department of Human Services

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Fraud Prevention Investigation Program Guidelines

Although the FPI Program employs a county based investigative structure (investigators are hired and supervised by county staff), operational expectations and standards are defined by DHS and set forth in these Guidelines. Adherence to the Guidelines ensures that comparable procedures and investigative standards are used statewide, that the rights of applicants and recipients are safeguarded, and that the interests of the taxpayer are met through the existence of an easy to use and readily available mechanism for welfare fraud investigations.

FPI Program legislation sprang from a confluence of national and local factors:

 A concern that individuals were coming to Minnesota to fraudulently collect public assistance but the state was not providing sufficient funding to support county agencies in their efforts to reduce fraud.

 A concern that conducting investigations for the sole purpose of prosecuting recipients is a costly and time consuming process which seldom results in the total recovery of fraudulently obtained assistance. Additionally, the nature of criminal investigation limits the number of cases that can be processed to a handful a year taken from a sea of possible cases.

 At one time Hennepin and Ramsey counties operated case worker based mobile verification units. These units proved a similar concept as practical and established a successful precedent.

 Several states developed a focus on fraud prevention, had positive experiences, and helpfully shared the procedural framework and results of their experiments.

In creating Minnesota’s program, the Department adhered to the philosophy that if prevention can take place before an ineligible applicant receives benefits or if benefits to ineligible recipients are terminated quickly, fewer federal, state, and county tax dollars are misspent. With the advent of federal block grant funding which places a cap on spending, this approach has proven especially valuable in ensuring only eligible recipients draw benefits from the finite pool of program dollars.

Minnesota’s FPI Program borrowed proven and replicable elements from prevention programs begun in other states during the 1980's, and complemented them with components tailored for success in the Minnesota public assistance environment. The FPI program uses an investigative process requiring cooperation between county agency case workers and investigators. The FPI model is defined by a need for rapid, accurate resolution of investigations and timely termination of benefits to ineligible recipients. It is important to note that the FPI enabling legislation places a cost neutrality requirement on the state’s funding appropriation for county agency administrative costs. This requires that demonstrable benefits of the FPI Program outweigh agency administrative costs. More so than many public programs, the FPI program must constantly monitor not only statewide costs and benefits, but also the viability of each county program. The cost neutrality provision requires FPI investigators and managers to be aware of the changing nature of public assistance program administration and adapt when necessary.

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History

In 1981, Orange County, California initiated the first broadly successful program to utilize trained investigators in the detection of fraudulent Aid to Families with Dependent Children (AFDC) and Food Stamp program applications prior to the establishment of eligibility for such assistance. Many states now operate with an investigator based fraud detection component to their public assistance fraud prevention and control plan.

In Minnesota during 1990 and 1991, the Department evaluated the effectiveness of investigator based fraud prevention programs in a pilot project involving seven counties. The Department’s pilot project experience was consistent with that of other states in that the FPI Program generated sufficient AFDC and Food Stamp program savings to be cost-effective to operate.

The success of the pilot project led the Minnesota State legislature to appropriate additional funding which enabled the Department to expand the FPI Program into additional counties in 1992. Consistent demonstrations of effectiveness led to additional funding for further expansion in 1995, 1997 and 2009.

Under present configuration, more than 30 positions are funded to operate FPI programs and dispersed over twenty-five county agencies. Thirteen of those twenty-five agencies act as the lead administrative agency in providing FPI services to multiple counties. All told, more than seventy counties, covering in excess of 90% of the state’s public assistance caseload, participate in the FPI Program directly or as participants in a regional operation.

The United States Department of Health & Human Services (HHS) conducted an on-site review and evaluation of the FPI Program. As a result of this review, HHS cited Minnesota’s FPI Program as a best practices model for other states to follow. The Minnesota FPI program has received recognition with inclusion in the Vice President’s Report of the National Performance Review. Specifically, HHS found that:

… ... Minnesota’s FPI Program demonstrates effective methods for cutting red tape and empowering employees to get results by developing specific referral criteria, eliminating time-consuming administrative and supervisory procedures, and creating a fraud

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In addition to TANF and Food Stamp program savings, the Department found in its own operational reviews that the FPI Program helped to:

 Increase case worker awareness of potentially fraudulent cases

 Increase claims establishment and disqualifications for intentional program violations (IPV)

 Increase recipient compliance with voluntary reporting requirements (deterrent effect)  Increase confidence in public assistance program administration

 Greatly expand the number of questionable cases that could be investigated as opposed to more traditional criminal justice oriented investigations

 Gather statistical data of use in identifying program weaknesses and suggesting policy and legislative changes

 Realize collateral benefit savings in other federal and state funded programs  Correct and update case file information, improving the accuracy of eligibility

determinations and thereby lowering quality control error rates

Along with these appropriations, the legislature added a cost neutrality provision that requires that public assistance program savings generated from fraud prevention investigations offset county agency administrative costs. This provision serves as the basis for monitoring county agency performance and requiring innovative prevention methodologies and multi-county shared investigator arrangements in order to maintain FPI Program cost-effectiveness.

By any measure, the FPI program represents a significant effort toward combating fraud and abuse in public assistance programs.

AFPI County Mapis included in the appendix to show which counties participate in the FPI program and any regional arrangements existing between counties.

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Sources of Program Funding

The Minnesota legislature appropriates funds to the Department for the purpose of reimbursing county agency FPI Program administrative costs.

The state appropriation is contingent upon federal financial participation (FFP) from the United States Department of Agriculture, Food and Nutrition Service (FNS); from the United States Department of Health and Human Services Temporary Assistance to Needy Families (TANF) block grant; and from the United States Department of Health and Human Services’Health Care Financing Agency.

Another state appropriation is also available that partially covers FPI related costs of Child Care Assistance Programs (CCAP) investigations.

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FPI Plan and Grant Application

In order for the Department to secure FFP and limit exposure to potential litigation, county agencies must structure their FPI program operations according to staffing and procedural requirements as set forth in these guidelines. Biennially, all counties must execute an FPI Plan and Grant Application (FPI Plan) (Single CountyandCooperative Agreement) with the

Department.

Once executed, these FPI Plans and amendments serve as the legal basis for departmental approval and funding of county agency FPI program operations. In addition to the grant language contained in the FPI Plan, the Department may also collect information on county agency fraud prevention program operations such as:

 Position classifications and descriptions of all county agency FPI and criminal

investigative staff, and a break out of percentage of time spent on FPI versus other, non-FPI related tasks.

 County agency organizational charts identifying the location and reporting relationships of the fraud prevention and control staffing within the agency.

 Copies of all contractual agreements with providers of FPI.  Reimbursement of County Expenditures.

The Department’s Financial Operations Division (FOD) reimburses county agency FPI Program costs using the income maintenance Cost Allocation Plan (CAP) methodology. The FPI

Program is considered another cost component of the county agency income maintenance administrative cost pool. However, unlike other income maintenance cost pool centers, the FPI program is excluded from random moment studies and operates under its own federally approved CAP. County agencies must report authorized FPI Program expenditures in whole dollars on page 5 of the paper or electronic version ofIncome Maintenance Expense Report DHS-2550-ENG.

Only county agencies with current and fully executed FPI Plans are authorized to claim reimbursement for FPI program expenditures. The Department is only obligated to reimburse FPI costs with state funding up to the non-federal share of the county agency’s fiscal year grant.

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Depending on the type of staff used in their FPI operations, county agencies enter amounts in the following expense categories on page 5 of theIncome Maintenance Expense Report, DHS-2550-ENG. DHS Bulletin 07-32-4

http://www.dhs.state.mn.us/main/groups/publications/documents/pub/dhs16_137885.pdf

provides detailed instructions for completing this report. FPI staff should not be treated

differently than other income maintenance staff in terms of upgrading hardware, software, office supplies, and office space. Under the CAP process, the FPI program is allocated its fair share of county office and support services. The work of FPI staff benefits all aspects of income

maintenance program administration.

In the first years of the FPI project reimbursement practices required an administratively burdensome manual process of identifying direct and indirect costs. Moving to the CAP based Quarterly Expense Report allows for a standardized FPI cost accounting methodology as directed in the Minnesota County Financial Accounting and Reporting Standards manual.

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Quarterly Settlement

Quarterly settlement of county agency FPI program costs occurs when the Department’s Financial Operations Division adds the allocation of qualifying county agency indirect costs to the FPI direct costs reported on page 5 of theQuarterly Expense Report. County Agency FPI employees are treated like case workers in that they are included in the income maintenance administrative cost pool. Employees who work in multiple program areas are allocated their share of a county agency’s administrative cost pool in accordance with the Cost Allocation Plan process. On the other hand, agency costs associated with a contract FPI investigative service must be direct charged as there is no administrative allocation covering contracted positions. In either event, the reason that the FPI program is identified separately on the Quarterly Expense Report is for the purpose of calculating the reimbursement shares from the various state and federal funding sources.

Allocations between federal and state funding accounts are based on the percentage of completed investigations by each public assistance program component. The Food Support and MA federal matching funds are not identified separately, but rather passed through to the county agency along with all other income maintenance reimbursements. The other funding sources for FPI program reimbursements are coded separately as FPI- TANF, FPI-Child Care and FPI-State when transmitted to the county agency.

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Other County Designed Cost Allocation Plan Methodologies

County agencies that operate their own Financial Operations Division approved Cost Allocation Plan must continue to obtain advance approval of an annual FPI Program grant amount and identify whole dollar (non-allocated) FPI Program costs on their income maintenance report submissions. Some counties have also been authorized to claim expenses under the FPI Expense Prorating method. This allows the county agency to claim 25% of its annual FPI grant every quarter and then reconcile costs against grant reimbursements internally. This method helps address problems associated with inconsistent quarterly reimbursement claim amounts

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Mandatory Case worker-Investigator Distinctions

There must be a clear distinction between the duties of the case worker and the FPI investigator. Cases referred for investigation under the FPI Guidelines are potentially fraudulent and need to be investigated by trained staff knowledgeable in both investigative procedures and program eligibility regulations. Unlike case workers, investigators are not restricted by federal regulation

7 CFR 273.2(f)which governs prior consent for third party contacts, home visits, data practices limitations on third party contacts, and resolution of discrepancies within households.

This is a critical distinction; fraud prevention personnel are investigators and do not make home visits, but in fact, conduct non-custodial interviews of recipients.

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Regional FPI Operations

Program efficiency demands full time investigators whenever possible, not part time ones. This principle requires grouping counties together until a sufficient caseload size can be balanced against a manageable geographic area. While regional FPI operations are more difficult to manage, the legislatively mandated cost-effectiveness requirement for the FPI program leaves no other choice.

The county hosting a FPI regional investigator is in charge of the operation. The host county is expected to make reasonable efforts to accommodate any special needs of the other counties involved, but the host county always has the final decision. DHS has general rules and

expectations and evaluates the program on results, but day to day operational control resides with the host agency.

For more detailed information see the “Orientation Document for New FPI Regions”in the appendix.

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Prohibited Uses of FPI Investigative Staff

Operating FPI programs without clear lines of distinction between eligibility verification procedures and investigative procedures exposes the Department and county agencies to

monetary damage lawsuits and court ordered procedural restrictions if the rights of recipients are shown to have been violated. In order to avoid this exposure, the following actions are

prohibited with respect to FPI Program staffing:

1. Assigning employees outside the bounds of their non-investigative civil service

classification to have them conduct FPI investigations. However, it is allowable to

interchange investigative staff between FPI and criminal investigations as long as the county agency funds its share of the position devoted to criminal investigation duties.

2. Combining investigative duties and public assistance program administration duties

under the same position. Use of a position which, although including investigation

duties in the position description, continues to require the county worker to manage or administer a public assistance caseload violates the prohibition of mixing investigation and eligibility functions.

3. Calculating overpayments identified during fraud prevention investigations. County

agencies must not use FPI investigators to calculate overpayments. Calculating overpayments is an inherent part of eligibility determination; that work is not to be funded by assignment to FPI program staff.

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Investigative Work Hours

Agencies must not arbitrarily restrict investigative work hours. Due to the nature of their job, investigators must have flexibility to schedule their time as necessary to contact recipients and other parties who are not available during traditional work hours.

Because investigators are funded strictly for a 40 hour workweek, accommodating these special circumstances for individual cases will require some type of flex time arrangement in order that no additional salary costs are incurred.

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Supervisory Case Reviews of FPI Investigations

In the appendix is aSample Format for Supervisory Review of FPI Investigative Cases. Use of the sample format is optional.

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Approved Types of FPI Investigative Positions

County agency workers who are funded to conduct FPI investigations must be classified as investigators and bear an appropriate position title such as welfare fraud investigator, fraud prevention specialist, eligibility investigator, or eligibility examiner. Included in the job description must be tasks directly related to the investigation of potentially fraudulent public assistance eligibility information. Currently, the following positions meet the staffing requirements of the FPI Guidelines:

1. Welfare Fraud Investigators in Merit System and county agency civil service classifications.

2. Fraud Prevention Specialists in Merit System and county agency civil service classifications.

3. Peace Officers* employed by the county sheriff or city police department. A contract is required between the county agency and the law enforcement office in order to secure FPI funding.

4. Criminal Investigators* assigned to a county attorney's office. A contract is required between the county agency and the county attorney's office in order to secure FPI funding.

5. Private Investigators* who meet licensing requirements pursuant to Minnesota Statutes326.32through 326.339. A contract is required between the county agency and the private investigation agency in order to secure FPI funding.

*In all contractual situations for fraud prevention investigation services, the

contracted investigator functions wholly as an employee of the county agency while conducting fraud prevention investigations.

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Approved Additional Duties for FPI Positions

The Department attempts to fund county agencies at the appropriate full time equivalent (FTE) level in order to maintain cost-effective program operations. These funded positions have a primary responsibility to conduct timely and thorough fraud prevention investigations upon receipt of a referral.

However, the number and timing of FPI referrals is not controllable. During limited periods of time it may be necessary for investigators to undertake other duties to sustain a productive level of effort. The following supplementary tasks are consistent with the goals and objectives of the FPI Program:

 Pursue recipient program disqualifications through the Administrative Disqualification (ADH) process when FPI findings identify intentional program violations.

 Undertake case file desk reviews as prescribed inSection IV (section 4.17)of the FPI Guidelines.

 Assist in developing and presenting FPI Program training for case workers and other FPI investigators.

 Coordinate adjudication of FPI cases with criminal investigations.  Compile and track data for FPI reports.

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Investigator Responsibility to Provide Training

FPI investigators must provide fraud detection training to county case workers and supervisors to assist them in understanding the FPI process and identifying cases that should be referred.

Minimally, investigators should provide annual FPI program training to all case workers and supervisors.

It is imperative that newly hired case workers be given training on FPI Program policy and procedures as soon as practical.

Investigators need to monitor and evaluate referral rates from financial assistance units and workers to evaluate fraud detection training needs.

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SECTION IV - REFERRAL AND REPORTING

PROCEDURES

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Referral for Investigation Form

The four-partFraud Prevention Investigation ReferralDHS-3335A-ENGsatisfies all FPI procedural and statistical reporting requirements. It consists of:

 Part A , to request the investigation.

 Part B, to report the findings of the investigation.

 Part C, to report public assistance case actions taken by the assistance case worker.  Part D, to report and initiate other fraud related outcomes and activities.

No other form is authorized for use in generating FPI referrals or reporting actions and results. This ensures that the FPI Program is operated consistently from one county to another, and that all necessary data elements can be compiled for statistical purposes.

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Referral Standards and Process

County agencies must ensure that case workers complete Part A of the FPI Referral Form to request an investigation when an application or open case exhibits characteristics of possible fraud.

Initiating a referral does not require an absolute certainty of fraud, only an appearance that a misrepresentation, concealment, or withholding of facts is resulting in obtaining or maintaining eligibility for benefits, increasing benefits, or preventing a reduction in the amount of benefits. FPI referrals must be based on questionable eligibility for current program benefits. A referral may occur during:

 Application;  Recertification, or;

 Whenever a review of case file information indicates household circumstances may not be accurately represented. Often, these reviews occur when the agency learns of possible case file discrepancies from s household change report forms, complaints from citizens or other recipients, other investigations, or state fraud hotline referrals.

Referrals involving any of the following program components are considered primary program components for the purpose of prioritizing referrals to investigate:

 TANF based programs such as MFIP, Diversionary Work Program (DWP), Work Benefit (WB) and Emergency Assistance (EA)

 Food Support  Medical Assistance

 Child Care Assistance programs: MFIP, transition year, sliding fee, and at-home infant Referrals involving cases with only state funded program components such as General

Assistance (GA) and Minnesota Supplemental Aid (MSA) should be made with the

understanding they will have a lower investigative priority than referrals with primary program components. See also section4.8, Prioritizing Referrals.

The documentFPI Referral Criteriaprovides a non-inclusive list of examples of case circumstances on which case workers could base a referral. Simply put, referral criteria are based on the premise that potentially fraudulent circumstances exist.

Note that some circumstances require referral to a criminal, not FPI, investigator:  Closed cases

 Currently open cases involving historical overpayment issues  Child Care provider issues

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Inappropriate Referrals

FPI program staff is not to be used to perform routine verifications of recipient eligibility. For example, IEVS and New Hire matches do not make valid FPI referrals since they involve

potential historical overpayments and case workers can make a first attempt to resolve the match through an automated process using MAXIS.

However, there are situations where in the judgment of the case worker, an FPI referral could result in the most effective resolution of the specified eligibility issue. What is critical in making FPI referrals is that the eligibility issue in question can be clearly presented in Part A of the FPI Referral Form.

As a general rule, referrals that require field investigation, such as those involving household composition or locating assets allow the best use of FPI staff.

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Supervisory Review of Referrals

In order to avoid unnecessary delays in the investigative process and assist in the timely completion of investigations, the FPI Referral form must be sent directly to the investigator. If county policy deems it necessary, send a concurrent copy of the referral to the supervisor. Certainly a supervisory review process can occur after the FPI investigative findings have been reported to the case worker. It is the investigator’s responsibility to ensure that a referral is valid and, if necessary, return inappropriate referrals to the case worker with an explanation.

The success of the FPI program relies on a streamlined referral and investigation process, with minimal administrative procedures and no unnecessary delays. In return, case workers can expect timely completion of investigations with accurate and reliable information.

County agencies must ensure that case workers are not restricted from making FPI referrals or from taking case actions as a result of the investigative findings.

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Initiation of Investigation

Investigations can only be initiated upon receipt of a completed FPI Referral form from a case worker.

At times, information comes to the attention of the investigator that could be used to initiate an FPI referral. In this situation, the investigator should either give the information to the case worker and request that an FPI referral be made, or pre-complete Part A of the referral form and forward it to the case worker for their review and initiation of an investigation. If the case worker can resolve the issue from case file information, cancel the investigation.

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Reporting Investigative Findings to the Case Worker

When investigators finish the investigative process, they prepare aSummary of Investigative

FindingsDHS-3335B-ENG, and complete the FPI Referral form Part B Investigative Findings.

These two items are then forwarded directly to the case worker.

The investigation completion date is the date the Summary of Findings and Part B are sent or given to the case worker.

The Part B section should provide the case worker with a concise summary of any discrepancies discovered. A discrepancy is defined as a departure from case file information as a result of representations (including omissions) on the most recent application, redetermination, or change report form, whether or not the departure causes a change in eligibility or benefit levels. All discrepancies should be shown, whether or not they were listed as an issue in the referral. More than one discrepancy can be recorded on a case.

The Summary of Findings is the investigator’s report of the results of their investigation. The report must be factual, devoid of opinions, and concisely written so that the case worker can readily draw a conclusion to use as a basis for taking case action. It is important to provide any documentary evidence in support of the reported findings and discrepancies. While the

investigator may advise the case worker on what action to take, the case worker maintains ultimate responsibility and authority for determining case actions.

County agencies may develop their own computer generated report forms, but in order to maintain FPI program consistency, any county agency investigation report form must bear the title “Summary of Findings”.

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Time Requirements for Investigations

Timely completion of fraud prevention investigations is a principal requirement to ensure that eligibility determinations are not delayed and that savings are quickly realized from the termination, denial, or reduction of program benefits.

Investigators are expected to maintain a figure under 15 days as their average number of elapsed days per completed fraud prevention investigation. That average is based on calendar days between the referral date indicated on Part A of the FPI Referral form and the date that the investigator’s Part B is returned to the case worker. The calculation includes total days elapsed without regard to work days missed due to weekends, training, holidays, illness, or vacations. It is acceptable for the average to occasionally exceed 15 days during any given month, the performance standard is based on a twelve month average.

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Prioritizing Referrals

In every program, as a matter of workload management and to ensure timely eligibility determinations, investigators must prioritize referrals. Furthermore, some programs may not have a staffing level sufficient to meet the completed investigation timeliness requirement if they consider every referral on an equal basis.

Investigations should be prioritized bearing in mind that the FPI Program is intended to provide field investigation services on issues that cannot be easily verified through routine verification measures. For example, FPI services are particularly effective with issues involving household composition.

After determining that a field investigation would offer the best chance of resolving the issue, prioritization must be made by case status of the referral and program categories as follows:

Highest priority -- referrals of new application and emergency assistance cases with at least one of the following primary public assistance program components: TANF funded programs (MFIP, DWP, WB and EA), Food Support, Child Care, or MA.

Second priority -- referrals of cases undergoing a recertification and with at least one primary public assistance program component.

Third priority -- referrals of open cases with primary public assistance program components but no application/recertification eligibility actions pending.

Fourth priority -- referrals of cases that do not contain one of the primary public assistance program components.

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Referrals That Cannot be Worked in a Timely Manner, or Have Been Sent to

a Criminal Investigator

FPI referrals that cannot be worked timely should be returned to the case worker with the explanation that limited resources do not allow for the assignment of the referral for investigation, and that the worker should pursue resolution of the issue through income

maintenance verification procedures. Do not hold or pend these referrals. If appropriate and it is possible to make such an estimate, state when the case may be referred again if the case worker cannot resolve the issue.

If a referral falls outside the scope of the FPI program and is referred directly on to a criminal investigator, the FPI Referral form should be returned to the case worker noting in Part D that the case has been referred to a criminal investigator.

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Collateral Case Benefit Terminations

During the course of an investigation, possible benefit terminations and reductions may also occur in peripheral or collateral cases not the responsibility of the original referring case worker. In these situations, the investigator needs to complete both Parts A and B of a FPI Referral form and submit their Summary of Findings to these additional, involved case workers. Note in Part A that the referral is based on the identification of discrepant case file information through a collateral investigation.

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Case Actions Based on Investigative Findings

The Summary of Findings form also contains check boxes to inform the case worker that

specified case closure notice provisions may be applicable or that the case should be referred to a criminal investigator. Note that even if the case is referred to a criminal investigator, the case worker must resolve current eligibility issues and take any necessary case action to reduce, deny, or terminate assistance.

One important and necessary aspect of the FPI Program is to identify grant savings when

applicants or recipients are not eligible for assistance. Upon receipt of the investigative findings, the case worker must evaluate the information to determine any impact on current eligibility for program benefits. The case worker must then issue notice to reduce or end assistance when facts from the investigation indicate this action.

Notice provisions will vary by program. For details see Combined Manual sections:  0026.12.06 Five Day Notice (MSA and GA)

 0026.12.09 Adequate Notice (all programs but MFIP)

 0026.12.18 Cash Cutoff Notice (MFIP)

It then becomes the responsibility of the case worker to record the case action and enter savings information on Part C of the FPI Referral form. This section represents one of the most

important reporting components for evaluating the effectiveness of a county agency’s FPI Program.

When case workers terminate or reduce benefits, they must calculate any FPI program savings. This is accomplished by taking the current month’s grant and subtracting the correct grant amount in each of the following program categories:

 TANF Cash column reflects only the cash portion of the MFIP grant and all other TANF related program savings such as Diversionary Work Program (DWP), Work Benefit (WB) and Emergency Assistance (EA).

 Food Support column reflects all Food Support program benefit savings and the food portion of MFIP.

 Medical Assistance column reflects only federal Medical Assistance savings and/or the amount of emergency or retroactive MA claims that are closed or denied. Do not claim savings if there would be eligibility for MA benefits if the recipient applied for them or could be granted extended MA benefits.

 Other State column includes all other state funded programs savings, such as General Assistance, Minnesota Supplemental Aid (MSA), MSA EA, or any other program.  Child Care column identifies Child Care Assistance program savings in MFIP, Transition

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When case workers deny an application, they must also attempt to calculate any FPI program savings. This may be more difficult since obviously there is no current grant amount to use for calculation, but there are program savings and investigators should make every effort to claim appropriate amounts of benefit savings for all investigative efforts. Determining savings may require some reasonable estimating.

If the denied application was for medical assistance and there was a request for retroactive medical assistance, be sure to claim the total amount of medical bills the applicant had requested assistance with as well as the ongoing monthly assistance.

If benefits in all programs increase or stay the same, check the block titled “No Change”. If the investigation results in increased benefits enter zero savings.

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Case Worker Reporting Requirements

The case worker must sign and date Part C of the referral form, retaining a copy for the case file and sending the original directly to the FPI investigator. The Part C must be completed and returned to the investigator withinthirty days of receiving the investigator’s Part B. Case workers should rarely fail to return a Part C within thirty days of receipt. One exception might be if the agency knows that a fair hearing has been requested on the proposed case action. In this situation, wait to report the case action and benefit savings until the appeal has been decided. Note, however, that in situations where the investigator discovers an appeal has been requested after case results have already been entered into the Investigative Data Management Application, do not attempt to retrieve and change the Part C. There are so few appeals, and even fewer reversals of agency decisions based on FPI investigations, that the statistical effect does not merit the administrative burden.

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Timely Termination of Public Assistance Cases

Do not leave an ineligible case open pending a criminal investigation unless circumstances require the case to remain open to avoid damaging or potentially damaging the criminal case. Base any delay on a specific request from the county attorney’s office or criminal investigator. A delay in notification is authorized up to the end of the quarter following the quarter of discovery of the overpayment (Combined Manual 25.24).

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Use of Recipient Affidavits

Never allow an affidavit from a recipient to refute investigative findings. Recipient affidavits are made in their self-interest and do not bear the significant evidentiary value of independently corroborated findings obtained through the FPI process. In fact, a new FPI referral should be generated if it appears that the recipient is attempting to misrepresent a change in their

circumstances in an effort to maintain eligibility. An investigator can determine if a change has indeed been made.

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Benefit Savings on Withdrawn Application or Recertification

Benefit savings should be claimed if an applicant does not follow through on an application for benefits after a fraud prevention investigation was conducted. These savings are considered to be a result of deterring recipients from receiving benefits to which they are not entitled. Savings should be taken even if there were no reported FPI discrepancy findings.

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Benefit Savings When Recipient is Eligible for Another Program

In a situation where the investigation results in a termination of a federally based program but eligibility is subsequently established for a state program (GA or MSA), report this event as a termination and record the grant savings in the federal based program category. Agency case actions are reported on the basis of the programs at the time of referral and the changes in eligibility that result from the investigative findings.

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Case File Desk Review Process

FPI investigations may develop through a case file desk review process which can help identify cases that should have been referred for a fraud prevention investigation. In addition, they can identify areas of program compliance vulnerability or abuse.

During periods of time when there are insufficient FPI referrals for the level of funded FPI staffing, desk reviews shall be performed in lieu of other non-FPI related duties. Note that case worker requests for fraud prevention investigations are always a priority over desk reviews. The desk review process may be initiated upon request from a county agency or at the direction of the Department. Cases subject to the review process must be selected by the Department. Selection is purely random from a group of cases opened, recertified or having a program change within approximately six months of the anticipated month of the desk review. The number of cases selected is dependent on the amount of work the county agency can absorb.

The desk review must be an internal review process involving the determination of the accuracy of information contained in the case file. No third party contact is authorized until such time that a case exhibits characteristics of possible or potential fraud and an FPI referral has been initiated. Some examples of allowable review procedures:

 Comparison of application statements with supporting documentation in the case file. For example, is reported income sufficient to meet known living expenses?

 Examination of supporting documentation for validity and authenticity.

 Confirming the accuracy of client statements relative to resource ownership and income by accessing databases such as Department of Natural Resources (DNR), Department of Public Safety, Drivers and Motor Vehicle Records (DMV), Department of Employment and Economic Development (DEED), Department of Labor and Industry/ Workers Compensation, and Credit Bureau.

After identifying an inconsistency, the investigator begins an investigation by completing Part A of the FPI Referral Form, noting that the inconsistency was identified through a desk review. The investigator must provide a copy of the completed Part A from the Referral Form to the case worker for enclosure in the case file. At this point the case worker can cancel the investigation if the inconsistency can be resolved from case file information.

Upon completion of the investigation, the same procedures for reporting investigative findings and case actions apply. Only case reviews that generate an actual referral for investigation

are to be entered into the Investigative Data Management Application. Never enter a case

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Overpayments, Criminal Investigation, and Administrative Disqualification

Hearing (ADH) Referrals

Other administrative issues and processes arise from the FPI process and are identified in the Other Case Outcomes (Part D) section on the FPI Referral form. As FPI investigations resolve questions of current eligibility, they often reveal information that leads to the assessment of overpayments and discovery of potential intentional program violations (IPV’s).

County agencies are required to resolve IPV’s through either the criminal or ADH process. An IPV is defined as any act by an individual for the purpose of establishing or maintaining

eligibility, increasing benefits, or preventing a reduction in the amount of assistance which is intentionally a false or misleading statement or misrepresentation, concealment or withholding of facts or an act intended to mislead, misrepresent, conceal or withhold facts.

Whenever an overpayment has been identified, there is an issue as to whether the recipient committed an IPV that resulted in the overpayment. County agencies must use the Part D to record overpayments and to initiate action for resolving potential IPV’s through the criminal or ADH processes as follows:

Overpayments

Record any actual overpayments that have been identified. A claim number is required. It is important that the case worker not delay reporting case action activity just for the purpose of obtaining overpayment information.

It is possible for investigative findings to have no impact on current eligibility but still result in identifying overpayments. Therefore, a lack of a negative action is not a bar to reporting overpayments.

Criminal Referrals

Suspected IPV’s that have the potential for meeting the county agency’s threshold for criminal prosecution should be referred to a criminal investigator or the county attorney. Either the investigator or case worker can use the D section of the referral form to initiate a criminal referral after the FPI process has been completed

County agencies must develop internal guidelines for determining which cases should be resolved through the criminal or ADH process and how the resolution is to be achieved.

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Referrals for Administrative Disqualification Hearings (ADH)

The Department understands and supports the role criminal adjudication must play in serious Intentional Program Violations. The ADH process, like the FPI Program, is intended to supplement not supplant traditional methodologies for controlling welfare fraud. In fact, Minnesota Statute256.046requires county agencies to use the ADH process when IPV’s have been identified but not pursued through criminal adjudication. The ADH process is not intended as a preliminary step to prosecution. The statute specifies use of the ADH process instead of, not in addition to, prosecution. Barring unforeseeable acts, an election is being made to adjudicate the IPV through the ADH process when an ADH waiver is offered. As the ADH notice states, an ADH will be pursued if the waiver is not signed; there is no indication that prosecution will be a factor or issue.

ADH actions are a component in evaluating the effectiveness and cost neutrality of county agency FPI Program operations. Negative case actions coupled with ADH based program disqualification enhances and substantiates benefit savings and cost avoidance and ensures that those recipients who have intentionally violated program rules cannot gain eligibility by merely correcting their household living circumstances.

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Requirements and Recommendations for Conducting Investigations

The FPI Guidelines exist as part of the Department’s statutory responsibility to promulgate regulations for the FPI process. However, county agencies maintain responsibility for direct supervision of its investigative staff and for ensuring that investigative techniques adhere to United States laws, federal regulations, Minnesota laws, applicable Department rules, county ordinances and applicable court orders.

The Department recognizes that specific techniques and resources employed to accomplish FPI program objectives will vary from one investigator to another and from one county agency to another. In this context, this section of the FPI Guidelines provides county agencies with both base line requirements and recommendations for conducting investigations.

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Permission to Search Form

ThePermission to Search formDHS-3385-ENGwas developed for optional use when the

recipient allows the investigator to look around their residence for evidence relating to public assistance program eligibility. Generally, these cases involve questions of household

composition such as absent parents or existence of children in or out of the household. In these situations, execution of this form demonstrates that the search was voluntary and safeguards the investigator from allegations that a threat of benefit termination was made to gain entrance. A taped recording of the recipient’s verbal permission to search is an acceptable substitute for the form.

The consent to search form is not necessary when the recipient allows the investigator into the home for the purpose of conducting an interview and no search of the home was intended.

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Investigative Databases

FPI staff have online access to several databases. It is appropriate to access these databases whenever there is need to determine the accuracy of public assistance program eligibility

information. It is also permissible to use these databases to perform case file desk reviews and to help resolve occasional routine requests from case workers to verify case file information.

The following databases are currently available:

 Department of Natural Resources: provides license information for hunting, recreational vehicles, boats, and snowmobiles

 Department of Public Safety: provides motor vehicle and drivers license records  Department of Economic Security: provides current and historical employment and

earnings information

 Credit Bureau: provides credit histories and social security number verifications  Disqualified Recipient Subsystem (DRS): a national database of recipients

disqualified from Food Stamps due to intentional program violations  MAXIS

 Medicaid Management Information System (MMIS)

 Providing Resources to Improve Support in Minnesota (PRISM): Child Support’s computer system

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Investigation and Interview Practices and Techniques

Investigators should ensure only legally sound investigative procedures are followed when exercising their authority to conduct investigations in order to avoid evidentiary problems. During the course of investigations, investigators should attempt to make contact with the recipient for purposes of an interview. It is up to the investigator's judgment whether to conduct the interview at the outset, during, or at the conclusion of the investigation. In some cases where the questionable eligibility issue may be resolved through third party contacts, it may not be necessary or practical to interview the recipient at all. However, in most instances it is recommended that recipients who are subjects of an investigation be contacted as a matter of thoroughness if nothing else.

Perform investigative interviews in a courteous and professional manner.

At the onset of any interview with a recipient or witness where personal information is being gathered, investigators must identify themselves by their position title and county agency affiliation and give a written or verbal FPI Data Practices Warning. See section 5.3.

If the recipient decides to voluntarily withdraw their application or close an open case take a written statement. Case workers require written statements to close cases or withdraw

applications. Also attempt to obtain a written statement from the recipient or witness when an admission causes program ineligibility.

Do not merely conduct a simple home visit that does nothing more than restate what the recipient has already reported to the agency. Thesample interview worksheet, in the appendix is a “best practices”example, and was designed by county agency income maintenance staff to help ensure all applicable eligibility issues are addressed during recipient interviews. This interview

worksheet is especially helpful for new investigators and those with limited knowledge of public assistance programs.

At the conclusion of an investigation it is extremely important to prepare complete and legible reports of investigative findings in grammatically correct, precise, and understandable language.

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Suggestions for Confirming Information

The following suggestions for conducting investigations in accordance with FPI Guidelines have been compiled from a number of different sources. Depending on the type of referral, some of the following suggestions may be applicable:

a. Use Driver and Vehicle Services (DVS) information to help confirm residence and use driver license photographs to establish identity.

b. Confirm the presence of the children in the home. Use sources that confirm actual presence and identity rather than Social Security cards and birth certificates. With the recipient’s consent, visually inspect household living and eating arrangements.

c. Look for evidence or signs that others may be living in the home and indicate this when reporting findings.

d. Confirm whether food is purchased and prepared separately if others reside in the household.

e. Confirm name, age and relationship to caretaker of any other persons living in the home.

f. Confirm the actual amount of rent paid and who pays for utilities.

g. Confirm whether the recipient receives a housing subsidy and if so, list the amount. h. Confirm who actually rents the dwelling and who is listed as an occupant.

i. Look for the presence of vehicles that may lead to further information about the recipient’s assets or the possibility of others living in the home. If vehicles are seen, perform a motor vehicle check to confirm ownership.

j. Ask recipient if they or anyone else residing in the home are employed and, if so, ask where employed, when employment began, number of hours per week, and pay rate. k. Ask about possible assets (checking, savings, boats, etc.) for all recipients on the case. l. Confirm ownership, value, taxes, and physical description of property through

property tax records.

m. Contact at least two knowledgeable third party sources in an effort to substantiate recipient’s statements.

n. Confirm whether child support is received.

o. When the recipient owns a multiple family dwelling, conduct a visual and physical inspection of the other units in the building. If there are other tenants, interview them to confirm the amount of rent they pay and whether they must also pay their own utilities.

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Investigator Safety

County agencies are responsible for ensuring the safety of their investigators. Above all, investigators must protect their personal safety and retreat from any threatening or

confrontational situation that may arise. Carry a portable cellular phone for use in an emergency. If you feel your safety is at risk, notify local law enforcement that you are in their jurisdiction and that you may need to contact them. On occasion it may be necessary to have another

investigator or law enforcement officer accompany you to the interview site for safety or to serve as a witness.

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Interviewing Minors

Do not conduct an interview of a minor child without the consent and presence of a parent or guardian.

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Purpose and Means of FPI Program Evaluation

An essential condition of maintaining funding for the FPI Program is that the program be budget neutral to the state; administrative costs cannot exceed the benefit returned to the taxpayer. Its enabling legislation establishes the need and requirement to set baseline cost-effectiveness standards for purposes of evaluating performance to validate continued funding for county agency FPI program operations.

The Department compiles data to determine statewide cost-effectiveness of the FPI Program operations, to examine types and quantity of FPI program activities, and to obtain information necessary for completing individual county program performance reports.

Because Department and legislative expectations require the FPI Program to continually prove its cost-effectiveness, performance measurement tools reflect an emphasis on cost-benefit and timeliness of completed investigations. While the statewide cost-effectiveness number determines whether the program has met its legislative mandate, the statewide number is comprised by the efforts of individual programs and investigators. Therefore, each county program is provided with at least an annual assessment of their performance relative to program standards and expectations regarding cost-benefit ratio and investigation processing time. In addition to the two basic measurements, the performance evaluation report may mention other areas of interest or concern that have surfaced with examination of performance data.

While the Department recognizes that the FPI Program produces many tangible and intangible benefits outside the realm of pure cost-effectiveness, primary evaluation tools must reflect readily measurable costs and benefits. This is not to be construed as minimizing or overlooking other non-monetary, beneficial aspects of the FPI program. Nevertheless, performance

effectiveness is measured by cost-effectiveness and timely resolution of public assistance eligibility issues.

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Cost-benefit Ratio Performance Standard

Purpose: To measure the pure cost-effectiveness of a FPI program; what is the extent of benefit the taxpayer receives for funding the program? This is the performance standard the

Department monitors most closely and upon which it places the highest expectations. The primary purpose of the FPI Program is to reduce the amount of benefits issued to ineligible people at a low cost to taxpayers.

Methodology: The cost-benefit ratio is calculated by dividing a program’s known financial benefit or return, by the amount of administrative costs.

Program costs are the actual administrative cost incurred, not the grant amount. If a program has been awarded a grant of $100,000 but only incurred $78.000 of expenses, the program cost is $78,000.

The benefit value used to calculate the cost-benefit ratio is comprised of three separate statistics drawn from the FPI Activity report:

 Benefit savings (benefits not expended) resulting from case denials, reductions, and terminations.

 Overpayments identified.

 Benefit savings (benefits not expended) resulting from ADH waivers and upheld hearing decisions. Note that ADH overpayments are included in the overpayment total.

Interpretation: As an example, over a fiscal year time period, a county reports $200,000 in one month benefit savings as a result of negative case actions from FPI investigations. It also identifies $100,000 in overpayments. Additionally, forty-eight ADH waivers were signed and two ADH hearings were resolved in the agency’s favor. The county agency’s FPI administrative cost reimbursements totaled $150,000.

Determining the county’s cost-benefit ratio requires some steps before the final ratio calculation can be done.

First, because program dollars saved are more important than overpayments identified, some weighting of these two figures is necessary. Accordingly, the reported one month program savings total is multiplied by three to give a three month savings total. In this example, a value of $600,000 is assigned to program savings.

Second, for purposes of cost-benefit calculations, the value of a signed ADH waiver or upheld hearing is not the amount of the overpayment, but the amount of savings derived from

disqualification. In order to capture a savings benefit amount from a disqualification, a standard savings amount of $1,000 is assigned to each successful ADH waiver or hearing result. This

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Third, the total amount of financial benefit attributed to FPI efforts is determined by adding the program benefit savings amount ($600,000), identified overpayments ($100,000), and the ADH benefit savings ($50,000).

The final step is to divide the total benefit figure of $750,000 by the program cost of $150,000. This results in a positive cost-benefit ratio of $5.00. For every one dollar of administrative costs, the program returns five dollars in overpayments identified or benefits not issued to ineligible recipients.

Benchmark performance measure: a $3.00 cost-benefit ratio is the benchmark expectation for

basic cost-effectiveness. A corrective action plan is required from any county agency posting a benefit ratio below $2.50. A waiver of the plan may be granted for programs posting a cost-benefit ratio between $2.50 and $2.99.

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Timeliness Performance Standard

Purpose: To measure the investigator’s responsiveness to case worker referrals. This is critical to maintain the basic underlying philosophy of the FPI process -- a speedy resolution of questionable eligibility issues.

Methodology: For each completed investigation, the number of days elapsed between the date of referral and the date that the FPI findings are relayed to the case worker is calculated. The average elapsed days per completed investigation is the average number of days it took to complete the investigations in a given report month. See also section 4.7, Time Requirements for Investigation.

Interpretation: This figure is automatically calculated by the Investigative Data Management Application.

Benchmark performance measure: An average of 15 days or less is required.

Using an average elapsed day calculation allows the investigator some flexibility for maintaining the timeliness standards. Completing investigations in less than 15 days allows the investigator to “bank”those days for more complex investigations.

Because it is critical that the duration of an FPI investigation interfere with eligibility

determination as little as possible, county agencies exceeding the 15 day standard are required to provide a corrective action plan.

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Other Performance Indicators

Investigative Caseload

Each FPI program is expected to meet a minimum workload requirement expressed as a ratio of completed investigations per month per Full Time Equivalent (FTE) staff position. The FTE figure includes all investigators and any support staff funded for the county program because the rationale for funding non-investigative staff is that they allow more efficient use of investigators. Counties are expected to maintain an average monthly ratio of 25 to 30 completed investigations per funded FTE position. Regional operations, due to greater travel and other logistical

demands, have a standard of 20 to 25 completed investigations per FTE. The higher figure would be considered optimal, the lower a minimum level. These numbers are based on historical and current data from Minnesota and other states. Every Minnesota program that consistently meets, and usually substantially exceeds, performance standards operates at these levels of completed casework.

The department recognizes that each program has a variety of factors impacting the average investigative workload. Furthermore, it recognizes that quality of work has a bigger impact on performance than quantity. Correspondingly, completed investigations as such are not a primary performance measurement. That said, there is still a demonstrable correlation between the number of investigations completed per FTE and an acceptable cost-benefit performance.

Other indicators

The Department tracks numerous statistics and measurements. All have significance in some context and may be used as needed to demonstrate program strength and weakness.

Some programs may be asked why their performance numbers are significantly above or below statewide averages in particular areas. In cases of above average performance, it is intended that where applicable this information will be shared with other programs on a “best practices”basis. In cases where performance is noticeably below average, perhaps notice of below average performance can begin a self-evaluation of process and procedures before an official request is made for a corrective action plan to bring the program into compliance.

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County Program Compliance with Standards

The Department has statutory authority to require program compliance with the procedural guidelines and standards established for the purpose of evaluating whether county agency FPI program operations are cost neutral.

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Determination of Non-Compliance with Standards

Pursuant to Minnesota Statutes256.983, subd. 4, county agencies are given notice of non-compliance and an opportunity to improve their program performance before sanctions are imposed.

The Department has identified reasons for issuing notice of non-compliance for cause: 1. Failure to meet the overall cost-benefit ratio standard.

2. Failure to meet the timeliness standard.

3. Failure to comply with statutes, FPI Guidelines, or the FPI Plan and Grant Agreement. A basis to issue a notice of non-compliance may be identified through various means such as the annual report on FPI program activities, other DHS generated reports, or county agency FPI program operation reviews.

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Remedying Non-Compliance

Once a basis for cause to issue notice of non-compliance has been identified, the Department will seek county agency compliance through a multi-step process:

1. DHS will send a notification letter to the county outlining the area of potential non-compliance and allow the agency an attempt to refute the non-non-compliance basis if it feels it has cause to do so. The notification will also contain an offer of technical assistance, including an operational review if requested.

2. If after completing the operational review the Department holds to a finding of non-compliance, the Department will issue formal notice of non-compliance that will detail the specific areas and recommendations for curing the basis for non-compliance.

3. The county agency must submit a corrective plan to the Department within thirty days of receipt of the notice of non-compliance.

4. Failure to submit a corrective plan, failure to cure the area(s) of non-compliance, or failure to be cost-effective can result in any of the following sanctions:

 Reduction in funded staffing level of FPI positions

 Billing the county agency for FPI services provided by the Department  Reallocation of program grant funds, or investigative resources, or both, to

other counties

 Denial of general funding up to the FPI grant amount for subsequent months of non-compliance

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Reporting FPI Activity

County agencies are expected to promptly and accurately enter data about their operations into the Investigative Data Management Application (IDM) as reportable events occur –referrals received, overpayments calculated, criminal referrals made, negative actions reported, etc. Every month, state staff run a report based on those data entries to provide statewide data about FPI activity. Data is tracked by case and by public assistance program categories so that information can be provided to the involved federal and state oversight agencies that partially fund the FPI Program, and for DHS program evaluation purposes.

A time allowance is built into the data administration process to allow activity that has occurred in a particular month to be entered into the IDM application. For instance, the state report capturing FPI activity for the month of January is run during the first week of March allowing county agencies the entire month of February to gather and finalize paperwork for January activities.

It is important to note that data entered into the IDM for January activities after the state report is run in March (to continue with the previous example) will not be reflected in the statewide January report. This becomes especially important during key program evaluations periods, most often at the end of the calendar year and the end of the state fiscal year (June 30th). In order for programs to receive credit for work done, they must report data in a timely manner.

An understanding of the information collected and reported on the Activity Report is critical for a county agency’s understanding of the effectiveness of their FPI program operations. The sections of the Activity Report are described below.

SECTION I

Investigations

This section reports the number of referrals received by investigators and the number of completed investigations returned to case workers during the report month.

Cases Referred: the number of referrals received by FPI investigators during the report month.

Investigations Completed: the number of fully completed investigations (written findings forwarded to the case worker).

Investigations Pending: the number of referrals assigned for investigation, but not yet completed.

Fraud Prevention Investigation Program Guidelines

Program Guidelines

Minnesota Department of Human Services

Fraud Prevention Investigation Program Guidelines

TABLE OF CONTENTS

History

Sources of Program Funding

FPI Plan and Grant Application

Quarterly Settlement

Other County Designed Cost Allocation Plan Methodologies

Mandatory Case worker-Investigator Distinctions

Regional FPI Operations

Prohibited Uses of FPI Investigative Staff

Investigative Work Hours

Supervisory Case Reviews of FPI Investigations

Approved Types of FPI Investigative Positions

Approved Additional Duties for FPI Positions

Investigator Responsibility to Provide Training

SECTION IV - REFERRAL AND REPORTING

PROCEDURES

Referral for Investigation Form

Referral Standards and Process

Inappropriate Referrals

Supervisory Review of Referrals

Initiation of Investigation

Reporting Investigative Findings to the Case Worker

Time Requirements for Investigations

Prioritizing Referrals

Referrals That Cannot be Worked in a Timely Manner, or Have Been Sent to

a Criminal Investigator

Collateral Case Benefit Terminations

Case Actions Based on Investigative Findings

Case Worker Reporting Requirements

Timely Termination of Public Assistance Cases

Use of Recipient Affidavits

Benefit Savings on Withdrawn Application or Recertification

Benefit Savings When Recipient is Eligible for Another Program

Case File Desk Review Process

Overpayments, Criminal Investigation, and Administrative Disqualification

Hearing (ADH) Referrals

Overpayments

Criminal Referrals

Referrals for Administrative Disqualification Hearings (ADH)

Requirements and Recommendations for Conducting Investigations

Permission to Search Form

Investigative Databases

Investigation and Interview Practices and Techniques

Suggestions for Confirming Information

Investigator Safety

Interviewing Minors

Purpose and Means of FPI Program Evaluation

Cost-benefit Ratio Performance Standard

Timeliness Performance Standard

Other Performance Indicators

Investigative Caseload

Other indicators

County Program Compliance with Standards

Determination of Non-Compliance with Standards

Remedying Non-Compliance

Reporting FPI Activity

SECTION I

Investigations