A progressive approach to controlling welfare fraud :a description and analysis of the Texas Department of Public Welfare Investigation Division

Purpose The objectives of this study were: (1) to ascertain the meaning of fraud and theft in the context of recipients of unwarranted welfare benefits; (2) to present a philosophy of deterrence; (3) to review the legal history of the Texas Welfare Department; (4) to provide an overview of the catalytic growth of welfare services and spending; (5) to review the development of control systems; (6) to present an overview of the Investigation Division and an analysis of its effect as a control system; (7) to analyze welfare policies for areas contributing to fraud; and (8) to advance proposals. Methods The methods used in this study were: (1) a review of the literature regarding the topic; (2) an organized compilation of that material; (3) a statistical analysis of the investigative results; and (4) an analysis of major welfare program policies. Findings 1. Fraud exists when there is an intent to obtain assistance, services or treatment from the Welfare Department by means of a willfully false statement or representation. Theft is an intent to deprive the owner of property or service or exercising control over the property or service unlawfully. 2. Deterrence is difficult to measure due to its success being based on acts (crimes) not committed due to fear of potential punishment. The Investigation Division theorizes that punishment of individuals obtaining welfare fraudulently will prevent others from committing the same crime. More negative punitive measures would further reinforce the deterrent effect. 3. The Texas Department of Public Welfare was created in 1939 in order to unify the various assistance programs and their related funding, and function as a liaison between the localities of Texas and the Federal Government. 4. The largest monthly increase in welfare rolls on the national level in more than three years occurred in January, 1975. In fiscal year 1974 the expenditures of the Texas Welfare Department totaled $869,013,800 in eight main categories (areas of service) as compared to an annual budget of thirty million dollars for four major programs in 1941. 5. Control systems were initiated in 1963 by HEW(Health Education and Welfare) with the development of Quality control to monitor state validity of welfare cases. Recoupment is the term applied to the process of obtaining repayment to the Welfare Department for overpayments to recipients. Fraud and recovery was a means of processing fraudulent welfare cases which involved a complicated referral system. 6. The Investigation Division of the Texas Welfare Department was developed in order to re-establish and protect the integrity of the Welfare Department and restore the confidence of taxpayers in government administration of welfare spending. During the initial nine months of operation, sustained fraud cases totaled over 1.7 million dollars in funds obtained illegally. 7. The liberalization of policies for determining eligibility for the AFDC and Food Stamp programs have contributed to the incidence of welfare fraud cases. 8. Four approaches of dealing with welfare fraud were proposed: (a) Other H.E.W. agencies should undertake similar investigative activities that would function as controlling methods against abuse of welfare benefits; (b) The classification of welfare fraud as a misdemeanor needs to be reclassified to theft. This would increase the deterrent effect by utilizing sterner punitive measures; (c) Investigative units should be established on the application level. Such would serve as a preventative against individuals initially obtaining welfare illegally.