Audit Casts Doubt On Food Stamp And CalWorks Anti-Fraud Measures

November 03, 2009
Contact: Rodney Foo @ (408) 282-8920
Costs of Fingerprinting and Fraud Investigations Exceeds Savings

A state audit requested by Assemblymember Jim Beall shows there is no proof current efforts to ferret out suspected fraud by CalWorks or Food Stamp recipients actually saves taxpayers money.

“The findings are troubling,’’ Assemblymember Beall said. “This audit indicates we may very well be wasting money in these tough times instead of using it to deliver real help to hungry families who have lost their jobs.’’

The audit, released today, found neither the state Department of Social Services or the counties could provide accurate data or “any meaningful analyses’’ to prove California’s ongoing fraud investigations save money.

The California State Auditor said the savings from early fraud detection measures “exceed the costs of such efforts for CalWorks and approach cost neutrality for the Food Stamp program using a three-month savings projection.’’

On-going fraud investigations fail to save money because they cost more to perform, the audit said. It also found a lack of continuity between the state and counties in following up on information that might affect a recipient’s eligibility.

The audit recommended the counties and the state improve the accuracy and quality of their welfare fraud data.

“Since the state began the fingerprinting program nine years ago, it has cost taxpayers a total of $45 million to find 845 cases of  fraud,’’ Beall said. “That breaks down to $53,200 spent on each case and does not include the costs of prosecution or investigation. Those 845 cases, by the way, ranged roughly from $400 to $10,000 each in fraudulent activity.

“We have to be careful with taxpayer dollars. This audit shows state government has failed to do that.’’