10.2 Fraud Investigation, Payment Recovery, and Sanctions

Lead Agencies must have the necessary controls to identify fraud and other program violations to ensure program integrity. Program violations can include both intentional and unintentional client and/or provider violations, as defined by the Lead Agency. These violations and errors, identified through the error-rate review process and other review processes, may result in payment or nonpayment (administrative) errors and may or may not be the result of fraud, based on the Lead Agency definition. 10.2.1 Strategies used to identify and prevent program violations Check the activities the Lead Agency employs to ensure program integrity, and for each checked activity, identify what type of program violations the activity addresses, describe the activity and the results of these activities based on the most recent analysis. a. [x] Share/match data from other programs (e.g., TANF program, Child and Adult Care Food Program, Food and Nutrition Service (FNS), Medicaid) or other databases (e.g., State Directory of New Hires, Social Security Administration, Public Assistance Reporting Information System (PARIS)). i. [x] Intentional program violations. Describe the activities, the results of these activities, and how they inform better practice: OSSE collaborates and shares data with DHS on subsidized child care and Temporary Assistance for Needy Families (TANF). Through this data sharing, OSSE is able to ensure that families referred to subsidized child care from these programs meet eligibility requirements. The ability to cross-check among social programs administered by different District agencies allows OSSE to protect against fraud and/or unintentional program violations. ii. [x] Unintentional program violations. Describe the activities, the results of these activities, and how they inform better practice: OSSE collaborates and shares data with DHS on subsidized child care and TANF. Through this data sharing, OSSE is able to ensure that families referred to subsidized child care from these programs meet eligibility requirements. The ability to cross-check among social programs administered by different District agencies allows OSSE to protect against fraud and/or unintentional program violations. iii. [x] Agency errors. Describe the activities, the results of these activities, and how they inform better practice:: OSSE collaborates and shares data with DHS on subsidized child care and TANF. Through this data sharing, OSSE is able to ensure that families referred to subsidized child care from these programs meet eligibility requirements. DHS eligibility workers review and match TANF referral information against TANF client’s information in the subsidy application. This matching ensures data and client records match at both agencies. Any instances of clients who do not match are researched and corrected as necessary. Additionally, data matching reduces administrative burden and the chances of agency errors for improper payments. b. [x] Run system reports that flag errors (include types). i. [x] Intentional program violations. Describe the activities, the results of these activities, and how they inform better practice: DHS submits a Child Care Subsidy Fraud Investigation Tracker Report to OSSE on a monthly basis. This report contains the case name, number, suspected fraud site, notes, action items, and status. To date, there have been no reported cases of suspected fraud reported to OSSE through this process. ii. [x] Unintentional program violations. Describe the activities, the results of these activities, and how they inform better practice: OSSE runs a monthly "Pending Eligibility Review Report" for all Level II providers. This report allows OSSE to determine any cases that are non-compliant with redeterminations and flagged for follow-up as needed. Reviewing the pending eligibility report ensures all redeterminations are completed within the required timeframe and eligibility records are up-to-date and accurate and any non-compliant matters are resolved as quickly as possible. iii. [x] Agency errors. Describe the activities, the results of these activities, and how they inform better practice: OSSE eligibility staff use the "Pending Eligibility Report" to identify pending and late eligibility redeterminations errors. This report is reviewed to determine that recertifications are being conducted in a timely fashion. This review flags potential agency errors prior to redetermination. Instances of non-compliance are reviewed, and OSSE will reach out to ensure compliance. c. [x] Review enrollment documents and attendance or billing records. i. [x] Intentional program violations. Describe the activities, the results of these activities, and how they inform better practice: OSSE reviews monthly attendance reports for all providers to ensure accurate payments. OSSE conducts attendance audits of subsidized child care providers to ensure accurate record-keeping and billing processes. Child care eligibility records are reviewed to ensure eligibility was determined accurately and rates and co-payments were assessed correctly. This review process supports the agency’s internal controls for intentional program violations. Funds are recouped if a case is deemed ineligible or overpayments were made due to intake errors. Errors are tracked and reviewed to identify any trends. ii. [x] Unintentional program violations. Describe the activities, the results of these activities, and how they inform better practice: OSSE reviews monthly attendance reports for all providers to ensure accurate payments. OSSE conducts quarterly attendance audits of all subsidized child care providers to ensure accurate record- keeping and billing processes. This review process supports the agency’s internal controls for unintentional program violations, such as an error in listing a student twice on a monthly attendance record. Any discrepancies are investigated, and funds are recouped if necessary. iii. [x] Agency errors. Describe the activities, the results of these activities, and how they inform better practice: Provider records are reviewed by staff at multiple levels, including review and approval by supervisors, to avoid agency errors. OCFO staff review subsidy payments before processing and returns to the team and supervisor necessary clarifications and corrections. These steps support the agency’s internal controls by minimizing agency errors, such as processing multiple payments in one month for one child. d. [x] Conduct supervisory staff reviews or quality assurance reviews. i. [x] Intentional program violations. Describe the activities, the results of these activities, and how they inform better practice: Supervisor review is required to approve subsidy payments. Subsidy payments go through multiple rounds of review. This includes review conducted by supervisory staff, the subsidy program manager, and the Director of Operations and Grants Management and are reviewed and signed by the Deputy Superintendent of Early Learning prior to the release of monthly payments. These multiple layers of review serve to ensure proper documentation is provided and tracked and to detect and correct potential payment errors before processing. ii. [x] Unintentional program violations. Describe the activities, the results of these activities, and how they inform better practice: Supervisor review is required to approve subsidy payments. Subsidy payments go through multiple rounds of review. This includes review conducted by supervisory staff, the subsidy program manager, and the Director of Operations and Grants Management and are reviewed and signed by the Deputy Superintendent of Early Learning prior to the release of monthly payments. These multiple layers of review serve to ensure proper documentation is provided and tracked and to detect and correct potential payment errors before processing. iii. [x] Agency errors. Describe the activities, the results of these activities, and how they inform better practice: Supervisory staff review documentation, such as monthly attendance and recommended payment adjustments (i.e., amount and days paid), and monthly error report payment adjustments to ensure quality control. Supervisory staff coordinate with other staff as necessary to clarify or process any corrections before submission for payment. These quality control measures minimize agency errors in managing billing and payment procedures. e. [x] Audit provider records. i. [x] Intentional program violations. Describe the activities, the results of these activities, and how they inform better practice: OSSE audits 100 percent of records for Level II providers with fewer than 30 records, 50 percent of records for Level II providers with 31-100 records, and 30 percent of records for Level II providers with more than 100 records. OSSE’s eligibility monitoring unit conducts onsite visits as necessary to follow up on any findings identified during the desk audit. Records managed by DHS are randomly reviewed annually at a rate of 3 percent. During the eligibility audits, the eligibility monitors review documents for accuracy and ensure that there are proper procedures in place during the intake and records maintenance process. The audits support OSSE in addressing intentional program violations. ii. [x] Unintentional program violations. Describe the activities, the results of these activities, and how they inform better practice: OSSE audits 100 percent of records for Level II providers with fewer than 30 records, 50 percent of records for Level II providers with 31-100 records, and 30 percent of records for Level II providers with more than 100 records. OSSE’s eligibility monitoring unit conducts onsite visits as necessary to follow up on any findings identified during the desk audit. During the eligibility audits, the eligibility monitors review documents for accuracy and ensure that there are proper procedures in place during the intake and records maintenance process. The eligibility monitoring unit provides technical assistance to clarify and correct any records that are incomplete and ensure the eligibility staff understands the current policy. The audits support OSSE in addressing unintentional program violations, including by identifying staff to target for training based on common errors and to identify case workers or Level II providers who need additional technical assistance with eligibility determinations. iii. [x] Agency errors. Describe the activities, the results of these activities, and how they inform better practice: During the eligibility audits, the eligibility monitoring unit reviews documents for accuracy and ensure that there are proper procedures in place during the intake and records maintenance process. The eligibility monitoring unit provides technical assistance to clarify and correct any records that are incomplete and ensure the eligibility staff understands the current policy. The audits support review and evaluation of the audit process to reduce the agency’s errors. f. [x] Train staff on policy and/or audits. i. [x] Intentional program violations. Describe the activities, the results of these activities, and how they inform better practice: The subsidy unit conducts quarterly training for providers on attendance and eligibility policies. All providers are required to attend at least one training per year. Providers may also receive individual training and technical assistance when requested. Annual required trainings ensure all Level II and DHS caseworkers are up to date on policies and procedures. These trainings include policies and procedures on reporting any suspected cases of fraud or intentional program violations to OSSE. OSSE staff also participate in federally offered technical assistance such as fiscal fundamentals and other ACF-offered fiscal training. ii. [x] Unintentional program violations. Describe the activities, the results of these activities, and how they inform better practice: The subsidy unit conducts quarterly training for providers on attendance and eligibility policies. All providers are required to attend at least one training per year. Providers may also receive individual training and technical assistance when requested. Training ensure all Level II and DHS caseworkers are up to date on policies and procedures and implementation is consistent for all families that initially apply or apply for redetermination to the District’s subsidized child care program. Examples of unintentional program violations covered during the training include mistakes in reporting income or incorrect data provided. OSSE staff also participate in federally offered technical assistance such as fiscal fundamentals and other ACF- offered fiscal training. iii. [x] Agency errors. Describe the activities, the results of these activities, and how they inform better practice: The subsidy unit conducts quarterly training for providers on attendance and eligibility policies. Prior to these trainings, OSSE staff shares any topics that should be highlighted during the training, including any trends in agency errors. Additionally, OSSE’s program integrity team meets with fiscal staff from the Division of Early Learning Operations and Management Unit to discuss relevant CCDF policy changes or upcoming audits. These meetings build knowledge on various aspects of program integrity. OSSE staff also participate in federally offered technical assistance such as fiscal fundamentals and other ACF- offered fiscal training to reduce errors and ensure compliance with fiscal requirements. g. [x] Other. Describe the activity(ies): Intentional program violations. i. [x] Intentional program violations. Describe the activities, the results of these activities, and how they inform better practice: Subsidy policy and operations manuals and the annual Provider Agreement for Subsidized Child Care Services outline the policies and procedures for reporting fraud, the consequences and penalties associated with these actions, and the steps the agency will take against providers who intentionally commit fraud in the subsidized child care program. In some instances, cases may be referred to the DC Office of the Inspector General (OIG) for review and final decision. Additionally, DHS submits a Child Care Subsidy Fraud Investigation Tracker Report to OSSE on a monthly basis. This report contains the case name, number, suspected fraud site, notes, action items, and status. To date, there have been no reported cases of suspected fraud reported to OSSE through this process. ii. [ ] Unintentional program violations. Describe the activities, the results of these activities, and how they inform better practice: iii. [ ] Agency errors. Describe the activities, the results of these activities, and how they inform better practice: 10.2.2 Identification and recovery of misspent funds Lead Agencies must identify and recover misspent funds that are a result of fraud, and they have the option to recover any misspent funds that are a result of unintentional program violations or agency errors. a. Identify which agency is responsible for pursuing fraud and overpayments (e.g., State Office of the Inspector General, State Attorney): DC Office of the Inspector General (OIG) b. Check and describe all activities, including the results of such activity, that the Lead Agency uses to investigate and recover improper payments due to fraud. Consider in your response potential fraud committed by providers, clients, staff, vendors, and contractors. Include in the description how each activity assists in the investigation and recovery of improper payment due to fraud or intentional program violations. Activities can include, but are not limited to, the following: i. [x] Require recovery after a minimum dollar amount of an improper payment and identify the minimum dollar amount. Describe the activities and the results of these activities based on the most recent analysis: Any improper payment greater than $100 is recovered by OSSE through the recoupment process. ii. [x] Coordinate with and refer to the other State/Territory agencies (e.g., State/Territory collection agency, law enforcement agency). Describe the activities and the results of these activities based on the most recent analysis: OSSE refers all suspected cases of fraud to DC OIG. DC OIG reviews the case information and conducts an independent investigation. Due to OSSE’s prevention measures, no cases have required referral to DC OIG in the past three fiscal years. iii. [x] Recover through repayment plans. Describe the activities and the results of these activities based on the most recent analysis: OSSE permits providers to enter into a repayment plan for recoupment, depending on the amount of the recoupment. Fraud or intentional program violations by a family may result in collection of funds from the parent or guardian improperly spent on child care. iv. [x] Reduce payments in subsequent months. Describe the activities and the results of these activities based on the most recent analysis: Any improper payment greater than $100 is recovered by OSSE through a recoupment plan to reduce payments administered in subsequent months. v. [ ] Recover through State/Territory tax intercepts. Describe the activities and the results of these activities based on the most recent analysis: vi. [ ] Recover through other means. Describe the activities and the results of these activities based on the most recent analysis: vii. [ ] Establish a unit to investigate and collect improper payments and describe the composition of the unit. Describe the activities and the results of these activities based on the most recent analysis: viii. [ ] Other. Describe the activities and the results of these activities: c. Does the Lead Agency investigate and recover improper payments due to unintentional program violations? [ ] No. [x] Yes. If yes, check and describe below any activities that the Lead Agency will use to investigate and recover improper payments due to unintentional program violations. Include in the description how each activity assists in the investigation and recovery of improper payments due to unintentional program violations. Include a description of the results of such activity. i. [x] Require recovery after a minimum dollar amount of an improper payment and identify the minimum dollar amount. Describe the activities and the results of these activities based on the most recent analysis: Any improper payment greater than $100 is recovered through the recoupment process. Providers are required to review their monthly pay statements and report any overpayments or underpayments to OSSE within three months to receive a payment adjustment. For overpayments, providers are able to enter into a repayment plan depending on the amount of the recoupment. ii. [ ] Coordinate with and refer to the other State/Territory agencies (e.g., State/Territory collection agency, law enforcement agency). Describe the activities and the results of these activities based on the most recent analysis: iii. [x] Recover through repayment plans. Describe the activities and the results of these activities based on the most recent analysis: If OSSE discovers that a program violation caused an improper payment, the agency will follow up with the provider to recoup these payments, per OSSE’s recoupment policy. The policy allows for the provider to enter into a repayment plan, depending on the amount of the recoupment. Unintentional program violations by the family may result in collection from the parent or guardian. iv. [x] Reduce payments in subsequent months. Describe the activities and the results of these activities based on the most recent analysis: Unintentional program violations may result in a recoupment plan for the child care provider, based on program staff findings and the payments may be reduced in the subsequent months. v. [ ] Recover through State/Territory tax intercepts. Describe the activities and the results of these activities based on the most recent analysis: vi. [ ] Recover through other means. Describe the activities and the results of these activities based on the most recent analysis: vii. [ ] Establish a unit to investigate and collect improper payments and describe the composition of the unit. Describe the activities and the results of these activities based on the most recent analysis: viii. [ ] Other. Describe the activities and the results of these activities: d. Does the Lead Agency investigate and recover improper payments due to agency errors? [ ] No. [x] Yes. If yes, check and describe all activities that the Lead Agency will use to investigate and recover improper payments due to agency errors. Include in the description how each activity assists in the investigation and recovery of improper payments due to administrative errors. Include a description of the results of such activity. i. [x] Require recovery after a minimum dollar amount of an improper payment and identify the minimum dollar amount. Describe the activities and the results of these activities based on the most recent analysis: Any improper payment greater than $100 is recovered by OSSE through the recoupment process. OSSE’s recoupment policy is described in the annual Provider Agreement for Subsidized Child Care and is also included as an attachment/addendum to the agreement. Providers are required to review their monthly pay statements and report any overpayments or underpayments to OSSE within three months to receive a payment adjustment and providers are aware that all overpayments will be recovered, regardless of fault. For overpayments, providers are able to enter into a repayment plan depending on the amount of the recoupment. ii. [ ] Coordinate with and refer to the other State/Territory agencies (e.g., State/Territory collection agency, law enforcement agency). Describe the activities and the results of these activities based on the most recent analysis: iii. [x] Recover through repayment plans. Describe the activities and the results of these activities based on the most recent analysis: Any discovered agency payment error will be followed up with a recoupment of payments to the provider. OSSE’s recoupment policy allows for the provider to enter into a repayment plan, depending on the amount of the recoupment. iv. [x] Reduce payments in subsequent months. Describe the activities and the results of these activities based on the most recent analysis: Agency payment errors may result in a recoupment plan for the child care provider, based on program staff findings. Eligibility monitoring staff will verify the overpayment amount and create a recoupment plan if necessary, based on the amount of the overpayment. v. [ ] Recover through State/Territory tax intercepts. Describe the activities and the results of these activities based on the most recent analysis: vi. [ ]Recover through other means. Describe the activities and the results of these activities based on the most recent analysis: vii. [ ] Establish a unit to investigate and collect improper payments and describe the composition of the unit. Describe the activities and the results of these activities based on the most recent analysis: viii. [ ] Other. Describe the activities and the results of these activities: e. What type of sanction will the Lead Agency place on clients and providers to help reduce improper payments due to intentional program violations or fraud? Check and describe all that apply: i. [x] Disqualify the client. Describe this process, including a description of the appeal process for clients who are disqualified. Describe the activities and the results of these activities based on the most recent analysis: An applicant for the Child Care Subsidy Program whose fraudulent behavior has been confirmed through investigation may be permanently barred from participating in the Child Care Subsidy Program. The applicant may appeal a decision to the Office of Administrative Hearings. The applicant has the right to be represented by legal counsel or by a person of their choosing, who is not an employee of the DC Government, and to bring witnesses on their behalf. ii. [x]Disqualify the provider. Describe this process, including a description of the appeal process for providers who are disqualified. Describe the activities and the results of these activities based on the most recent analysis: When there is evidence that a provider has committed a substantial program violation with the intention of obtaining payment from the District of Columbia, OSSE may terminate the Provider Agreement for Subsidized Child Care Services for non-compliance and refer suspected cases of waste and fraud for investigation to OSSE's Office of the General Counsel (OGC) and/or the DC OIG. When a provider has been terminated due to substantiated instances of fraud, the provider will be designated as an excluded party pursuant to DC Code 2-308.04 and the provider cannot solicit any contract with the District of Columbia Government for a period of 36 months. The process to appeal a disqualification begins with an attempt at an informal resolution process. If that process is unsuccessful, the provider may submit a formal written request to the Deputy Superintendent of Early Learning, which includes an opportunity for an informal conference and concludes with a written decision. Finally, the provider may appeal the written decision of the Deputy Superintendent of Early Learning by submitting a written request for an appeal and reconsideration to the State Superintendent of Education within 15 calendar days of receipt of the decision. The Superintendent will review the decision and any objections from the provider and issue a written decision that resolves the dispute within 30 calendar days of receipt of the provider's appeal. iii. [x] Prosecute criminally. Describe the activities and the results of these activities based on the most recent analysis: If OSSE determines that fraud has occurred, the case may be referred to the DC OIG for investigation and the Office of the Attorney General for possible criminal prosecution. iv. [ ] Other. Describe the activities and the results of these activities based on the most recent analysis: Appendix 1: Lead Agency Implementation Plan The Appendix will be available for Lead Agencies to use in CARS after the Plan approval letter is issued. For each non-compliance, Lead Agencies must describe the following: • Action Steps: List the action steps needed to correct the finding (e.g., update policy manual, legislative approval, IT system changes, etc.). For each action step list the: o Responsible Entity: Indicate the entity (e.g., agency, team, etc.) responsible for completing the action step. o Expected Completion Date: List the expected completion date for the action step. • Overall Target Date for Compliance: List date Lead Agency anticipates completing implementation, achieving full compliance with all aspects of the findings. (Note: Compliance will not be determined until the FFY 2025-2027 CCDF Plan is amended and approved). Appendix 1: Form [Plan question with non-compliance and associated provision will pre-populate based on preliminary notice of non-compliance] A. Action Steps for Implementation B. Responsible Entity(ies) C. Expected Completion Date Step 1: Step 2 (as necessary): [Additional steps added as necessary] Overall Target Date for Compliance: