LIHEAP Program Integrity Challenges and Solutions
- 1. LIHEAP PROGRAM INTEGRITY: CHALLENGES & SOLUTIONS A K M R A H M A N M A S S A C H U S E T T S D E P A R T M E N T O F H O U S I N G & C O M M U N I T Y D E V E L O P M E N T National Energy and Utility Affordability Conference (NEUAC) - 2012 6/11/2012Program Integrity: Challenges & Solutions, Akm Rahman, MA DHCD 1
- 2. Program Background Risk-Assessment Assurance of ARRA sub-grantees – 19 out of 24 administer LIHEAP. GAO Report and subsequent HHS guidelines – significant changes in LIHEAP policies and procedures. The state Office of Inspector General (OIG) review of all ARRA-WAP sub-grantees – 15 out of 20 administer LIHEAP. Program Integrity Work Group – MA has been a member since 2011. Service Delivery – changes in LIHEAP application and certification process. 6/11/2012Program Integrity: Challenges & Solutions 2
- 3. Program Background “…to assist low-income households, particularly those with the lowest incomes, that pay a high proportion of household income for home energy, primarily in meeting their immediate home energy needs.” - High deliverable fuel prices - Growing caseload - Funding cuts - New Program Integrity procedures 6/11/2012Program Integrity: Challenges & Solutions. 3
- 4. The Landscape – Program Characteristics Serve over 420,000 individuals or 210,000 households . About 33% heat with deliverable fuel, 62% utilities, 5% heat-included in rent. The average income was $21,000 per household in 2010- 2011. The LIHEAP Application is designed to collect over 35 different data elements, including SSN. Non-emergency certification can take up to 4-6 weeks. Close to 50% of all LIHEAP applications are received by local agencies before November 1st. 6/11/2012Program Integrity: Challenges & Solutions 4
- 5. The Landscape – Flow of LIHEAP and other Funds State Home Energy Programs (Federal - $132.67 M & State - $21.18 M) DOE ARRA-WAP and regular WAP $8.5 million for LIHEAP Weatherization LIHEAP Sub- Grantees (19 CAAs, 1 other non- profit, 1 city department) LIHEAP Vendors Regulated Investor- Owned Utilities – 56% Unregulated Deliverable Fuel Vendors - 37% Regulated Municipally- Owned Utilities - 2% Heat- included- in-Rent Direct Pay Clients- 5%. 6/11/2012Program Integrity: Challenges & Solutions 5
- 6. Policy & Operational Questions Is it necessary for a LIHEAP applicant to provide his/her SSN? Should we stop providing benefits to a very small number of applicants with no SSN? We have a vendor contracting process in place, but is it authentic enough? What are the potential “entry points” to LIHEAP fraud? Which changes are reasonable? 6/11/2012Program Integrity: Challenges & Solutions 6
- 7. Policy & Operational Goals – Performance Verification System Verify SSN and other applicant information. Conduct more wage matches. Authenticate all LIHEAP vendors. Implement “Related-party transactions” and State Executive Order 504 policies. Encourage local agencies to conduct post-audits. Develop a formal fraud reporting process. 6/11/2012Program Integrity: Challenges & Solutions 7
- 8. Operational Changes – Performance Verification System All household members’ SSN and certain available information will be verified through the SVES IV system without much human interactions. Additional client information will be verified by local agencies through a TANF data look-up system. Dept. of Revenue wage matches are now conducted at least twice a year. More matches are encouraged. 6/11/2012Program Integrity: Challenges & Solutions 8
- 9. Operational Changes – Performance Verification System Expanding the State’s E. Gov. system (to allow vendor authentication, address correction, and benefit verification). Developing new training modules around fraud prevention and Program Integrity. Using data security standards and utilizing new technology. 6/11/2012Program Integrity: Challenges & Solutions 9
- 10. Operational Solutions: Documentation > Verification Documentation Identity Household Composition Service Address Household Income Home Energy Consumption Vendor Participation Tenant-Landlord No Income Situations …. SSN, ID, & Birth Certificates Proof of Address Paystubs, Tax Forms, Award Letter, Checks, Bank Statements Electronic Eligibility & Billing Files Tenant-Landlord Form Vendor Contracts Income Vs. Expense Calculation Performance Verification More software checks & balances SSNs, fixed income, and other verification Household composition, income, TANF benefits, & child support payment verification Address correction Un-duplicate benefit verification Electronic eligibility & billing Vendor Authentication Electronic Wage Match Post-audits 6/11/2012Program Integrity: Challenges & Solutions 10
- 11. Operational Solutions: Secure Data Exchange, Validation, and Fraud Detection LIHEAP AGENCIES State E.Gov. System (encrypted data exchange) SSA State E.Gov System (encrypted data for validation and fraud detection) 6/11/2012Program Integrity: Challenges & Solutions 11
- 12. LIHEAP Monitoring Findings: Fiscal Years 2010 - 2012 0 5 10 15 20 25 30 35 2010 2011 2012 E r r o r R a t e s ( % ) Sample 1 Sample 2 Sample 3 Sample 4 Sample 5 Sample 6 Sample 7 Sample 8 N = 22 6/11/2012Program Integrity: Challenges & Solutions 12
- 13. LIHEAP Program Integrity: Challenges & Solutions Ongoing Lessons Learned Data exchange agreements can take more than a year to implement. Security standards are extremely strict. The auditing & oversight community can be helpful. Local agencies can help write new business rules. Verification should streamline operation. Need to set-aside administrative funds. 6/11/2012Program Integrity: Challenges & Solutions 13
- 14. Contact Information Akm Rahman Senior Program Coordinator Massachusetts Department of Housing & Community Development 100 Cambridge Street, Suite 300 Boston, MA 02114 (617) 573-1413 www. mass.gov/dhcd akm.rahman@state.ma.us 6/11/2012Program Integrity: Challenges & Solutions. Akm Rahman, Massachusetts DHCD 14