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: The eligibility system includes the federally mandated Income and Eligibility Verification System (IEVS). The system integrates eligibility for all programs (SNAP, Child Care Subsidy, Medical Assistance, and TANF) which allows for more accurate data. Exception reports can also be run. The system also interfaces with several agencies including the Social Security Administration, Oklahoma Employment Security Commission, the United States Postal Service and Oklahoma Child Support Services to share data for more accurate eligibility decisions. The current practice allows the Lead Agency to identify attempts of concurrent enrollment. Intentional program violations are handled by the Lead Agency’s Office of Inspector General in accordance with Oklahoma Statute 340:65-9-4. The results of this practice reinforce the necessity of integrating data to identify attempts of fraud. ii. [x] Unintentional program violations. Describe the activities, the results of these activities, and how they inform better practice: The eligibility system includes the federally mandated Income and Eligibility Verification System (IEVS). The system integrates eligibility for all programs (SNAP, Child Care Subsidy, Medical Assistance, and TANF) which allows for more accurate data. Exception reports can also be run. The system also interfaces with several agencies including the Social Security Administration, Oklahoma Employment Security Commission, the United States Postal Service and Oklahoma Child Support Services to share data for more accurate eligibility decisions. The Lead Agency's Office of Inspector General conducts monthly audits of child care providers. A summary is provided along with licensing memos to the Child Care Services staff. The items are reviewed by Child Care Services staff for further action. This practice helps identify areas of improvement in the provider monitoring process and topics for technical assistance. iii. [x] Agency errors. Describe the activities, the results of these activities, and how they inform better practice:: Eligibility workers are required to run a case scan report which contains pertinent benefit information about the case as a whole and about individual case members prior to each eligibility determination. The report also checks the Data Exchange system which includes data regarding receipt of SSI and Social Security benefits, wage data, new hires, unemployment compensation, addresses, etc. The Office of Inspector General also uses reports of suspicious EBT activity when conducting provider audits. These efforts assist staff in making more accurate eligibility decisions and help identify potential fraud or intentional program violations. The AFS TANF Division of OKDHS sends a monthly swipe report for the Subsidy Contract Specialists providers to review and analyze against provider payments. This data matching activity allows the Lead Agency to identify irregularities in attendance and billing practices. Agency errors are handled by the Office of Inspector General and Financial Services Electronic Payment Systems. 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: Eligibility workers are required to run a case scan report which contains pertinent benefit information about the case as a whole and about individual case members prior to each eligibility determination. The report also checks the Data Exchange system which includes data regarding receipt of SSI and Social Security benefits, wage data, new hires, unemployment compensation, addresses, etc. The Office of Inspector General also uses reports of suspicious EBT activity when conducting provider audits. These efforts assist staff in making more accurate eligibility decisions and help identify potential fraud or intentional program violations. ii. [x] Unintentional program violations. Describe the activities, the results of these activities, and how they inform better practice: Eligibility workers are required to run a case scan report which contains pertinent benefit information about the case as a whole and about individual case members prior to each eligibility determination. The report also checks the Data Exchange system which includes data regarding receipt of SSI and Social Security benefits, wage data, new hires, unemployment compensation, new hire list, addresses, etc. The Office of Inspector General also uses reports of suspicious EBT activity when conducting provider audits. These efforts assist staff in making more accurate eligibility decisions and help identify unintentional program violations iii. [x] Agency errors. Describe the activities, the results of these activities, and how they inform better practice: Eligibility workers are required to run a case scan report which contains pertinent benefit information about the case as a whole and about individual case members prior to each eligibility determination. The report also checks the Data Exchange system which includes data regarding receipt of SSI and Social Security benefits, wage data, new hires, unemployment compensation, new hire list, addresses, etc. These efforts assist staff in making more accurate eligibility decisions and help identify agency errors. 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: Lead Agency staff review attendance and billing records to identify potential fraud and program violations. These reviews may result in cancelation of a child care provider’s subsidy contract or closure of a client assistance case. This practice reinforces the need to compare attendance and billings as another safeguard against program violations. ii. [x] Unintentional program violations. Describe the activities, the results of these activities, and how they inform better practice: Lead Agency staff review attendance and billing records to identify unintentional program violations. These reviews may result in a corrective action plan or cancelation of a child care provider’s subsidy contract. iii. [x] Agency errors. Describe the activities, the results of these activities, and how they inform better practice: Lead Agency staff review attendance and billing records to identify agency errors. This practice allows the Lead Agency to address agency errors, identify patterns and development processes to minimize future errors. 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: Supervisors at the local level spot check child care subsidy cases for accuracy. New staff have 100% of their cases reviewed. In addition, the Child Care Subsidy unit at the State Office conducts random quality assurance reviews of child care subsidy cases each month similar to the Improper Payments process. These reviews help the Lead Agency identify potential fraud and intentional program violations. ii. [x] Unintentional program violations. Describe the activities, the results of these activities, and how they inform better practice: : Supervisors at the local level spot check child care subsidy cases for accuracy. New staff have 100% of their cases reviewed. In addition, the Child Care Subsidy unit at the State Office conducts random quality assurance reviews of child care subsidy cases each month similar to the Improper Payments process. These reviews help the Lead Agency identify unintentional program violations. iii. [x] Agency errors. Describe the activities, the results of these activities, and how they inform better practice: Supervisors at the local level spot check child care subsidy cases for accuracy. New staff have 100% of their cases reviewed. In addition, the Child Care Subsidy unit at the State Office conducts random quality assurance reviews of child care subsidy cases each month similar to the Improper Payments process. These reviews help the Lead Agency identify agency errors. e. [x] Audit provider records. i. [x] Intentional program violations. Describe the activities, the results of these activities, and how they inform better practice: The Office of Inspector General reviews provider records during the course of an audit. These audits assist the Lead Agency in identifying potential fraud and intentional program violations. Program violations may result in cancellation of the provider’s subsidy contract. ii. [x] Unintentional program violations. Describe the activities, the results of these activities, and how they inform better practice: The Office of Inspector General reviews provider records during the course of a provider audit. These audits assist the Lead Agency in identifying unintentional program violations. Program violations may result in a corrective action plan or cancellation of the provider’s subsidy contract. iii. [x] Agency errors. Describe the activities, the results of these activities, and how they inform better practice: The Office of Inspector General reviews provider records during the course of a provider audit. These audits assist the Lead Agency in identifying agency 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: Staff are trained on the Lead Agency’s program integrity efforts. Results of audits are used to identify error trends and the development of training material for eligibility staff. ii. [x] Unintentional program violations. Describe the activities, the results of these activities, and how they inform better practice: Staff are trained on the Lead Agency’s program integrity efforts. Results of audits are used to identify error trends and the development of training material for eligibility staff. iii. [x] Agency errors. Describe the activities, the results of these activities, and how they inform better practice: Staff are trained on the Lead Agency’s program integrity efforts. Results of audits are used to identify error trends and the development of training material for eligibility staff. g. [ ] Other. Describe the activity(ies): i. [ ] Intentional program violations. Describe the activities, the results of these activities, and how they inform better practice: 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): The Lead Agency, Office of Inspector General 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: 1) The Improper Payments error rate review process is conducted every three years as required by CCDF regulations; 2) The Child Care Subsidy unit conducts monthly random case audits using a similar method to the Improper Payments process; 3) Supervisors at the local level spot check child care subsidy cases of experienced staff for accuracy; 4) Supervisors at the local level review 100% of child care subsidy cases for new staff. 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: Overpayments due to fraud are referred to the courts for prosecution. iii. [x] Recover through repayment plans. Describe the activities and the results of these activities based on the most recent analysis: Both providers and clients that have an established overpayment can contact the Lead Agency to set up a repayment plan. iv. [x] Reduce payments in subsequent months. Describe the activities and the results of these activities based on the most recent analysis: Providers can choose to have a percentage of their payments recouped to repay overpayments. 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. [x] 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: The Office of Inspector General Child Care Audit Unit is responsible for auditing child care providers for appropriate use of CCDF. Audits are based on referrals, random sample, or suspicious EBT activity. Any program violations identified during the course of an audit are forwarded to the Finance and Child Care Subsidy units for further action which may include establishment of overpayments and cancellation of the provider’s subsidy contract. When audit results determine fraud has occurred, a referral to the OIG Investigations Unit is made. 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: : The Lead Agency attempts to recover all established overpayments regardless of amount. 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: Both providers and clients that have an established overpayment can contact the Lead Agency to set up a repayment plan. iv. [x] Reduce payments in subsequent months. Describe the activities and the results of these activities based on the most recent analysis: Providers can choose to have a percentage of their payments recouped to repay overpayments. 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. [x] 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: The Office of Inspector General Child Care Audit Unit is responsible for auditing child care providers for appropriate use of CCDF. Audits are based on referrals, random sample, or suspicious EBT activity. Any program violations identified during the course of an audit are forwarded to the Finance and Child Care Subsidy units for further action which may include establishment of overpayments and cancellation of the provider’s subsidy contract. 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: The Lead Agency attempts to recover all established overpayments regardless of amount. 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: Both providers and clients that have an established overpayment can contact the Lead Agency to set up a repayment. iv. [x] Reduce payments in subsequent months. Describe the activities and the results of these activities based on the most recent analysis: Providers can choose to have a percentage of their payments recouped to repay overpayments. 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. [x] 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: The Office of Inspector General Child Care Audit Unit is responsible for auditing child care providers for appropriate use of CCDF. When an agency error is identified during the course of an audit, the Child Care Subsidy Unit is contacted for further action which may include correction or closure of a client assistance case and establishment of an overpayment. 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: When it is discovered that a client was approved in error due to intentional program violations or fraud, the eligibility worker closes the child care assistance. Whenever a negative action is taken, a computer-generated notice is sent to the client describing the reason for the closure and notifying the client of his or her appeal rights. All negative actions allow for an appeal which includes an administrative hearing. In addition, there is no period of disqualification. The client may reapply at any time. 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: Providers who are found to have violated Lead Agency policies may have their subsidy contract canceled. Following cancelation, providers are sent a notice explaining that they may request a review of the cancellation with the Deputy Director of Programs in Adult and Family Services. There is not a period of disqualification; providers may reapply for a subsidy contract at any time. However, all contracts are granted at the discretion of the Lead Agency. iii. [x] Prosecute criminally. Describe the activities and the results of these activities based on the most recent analysis: The Office of Inspector General refers overpayments due to fraud to the courts for 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: