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California controller’s report says counties are slow to catch fraud

California State Controller John Chiang released a new survey Monday that criticizes counties as too slow to act after they learn that in-home care payments may be going to pay for care for dead recipients.

As much as $11.5 million in state payments in 2008 may have been lost because of inaction to ensure the validity of payments to providers of care, Chiang's survey showed. Some care providers' names and Social Security numbers have also been found in federal and state records of the deceased.

The problem could be the result of fraud, with someone using the Social Security number of a deceased person, or clerical errors.

The California Department of Social Services administers the in-home care program for the disabled and elderly.

Counties process timesheets filled out by in-home care workers and recipients. The sheets are sent to the state Department of Social Services.

The controller's office issues the checks to pay the wages and runs names of providers and recipients through death files.

Social Services notifies counties of inconsistencies, and counties are responsible for investigating and recouping losses.

In Fresno and San Diego counties, according to the survey, about $464,000 and $538,700 in questionable payments were issued in 2008.

Of the 129 cases in question in those counties, only a quarter of individual files contained documentation showing that counties had taken sufficient action to resolve inconsistencies, Chiang's report said.

"Many of these cases were referred for fraud investigation with inconclusive results," according to a letter about the survey Chiang sent to Social Services.

Frank Mecca, executive director of the County Welfare Directors Association, said counties are funded for only about eight hours of social work oversight per case per year. He called the funding "inadequate." Mecca said officials should be able to speed up comparing death records against names of in-home care providers and recipients with a new state payroll system that's under construction.

State Department of Social Services spokeswoman Lizelda Lopez said officials "don't agree with the controller's contention," but that "there's always more work to be done, and we are working with our county partners to strengthen these reporting requirements."

Gov. Arnold Schwarzenegger, who urged reforms to fight fraud last year, responded to Chiang's report with a press statement.

"Any fraud in our system is too much," the governor said. "Now more than ever, every dollar must count so that we can save money and focus this important program for Californians that rely on these resources."

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