Track e 2014 neuac - hhs best practices to avoid fraud, ma department of housing & community...
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Akm Rahman Commonwealth of Massachusetts Department of Housing & Community Development Division of Community Services 100 Cambridge Street, Suite 300 Boston, MA 02114 www.mass.gov/dhcd [email protected]
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Transcript of Track e 2014 neuac - hhs best practices to avoid fraud, ma department of housing & community...
Akm RahmanCommonwealth of Massachusetts
Department of Housing & Community Development
Division of Community Services100 Cambridge Street, Suite 300
Boston, MA 02114www.mass.gov/dhcd
“Maintaining the integrity of programs is essential to their success in providing assistance to those truly in need while maximizing funds.” – 2014 NEUAC, session description.
“DHCD's mission is to strengthen cities, towns and neighborhoods to enhance the quality of life of Massachusetts residents. We provide leadership, professional assistance and financial resources to promote safe, decent affordable housing opportunities, economic vitality of communities and sound municipal management.” - Massachusetts Department of Housing & Community Development
Goal and Mission Statement
Energy Efficiency
Community Development
Home Energy
Assistance
Other Housing & Economic
Development
Programs
Quasi Public Organizations
Community Services
Housing Stabilization
Subsidized Housing
Public & Private Housing
Development
Massachusetts Department of Housing &
Community Development Programs
Opportunity/Motivation – There is minimum control and lack of organizational oversight.
Pressure – There is a will to commit fraud, waste, and abuse.
Rationalization – “It’s OK” Individuals Who Commit Fraud, Waste and Abuse View it as an Accepted Practice or Part of Their Rights as a Contractor or Employee.
Theory & Practice – Fraud Triangle
OPPORTUNITY
PRESSURE RATIONALIZATION
Donald R. Cressey, Other People's Money (Montclair: Patterson Smith, 1973) p. 30 & www.acfe.com & Massachusetts Tool Kit to Combat Fraud, Waste,& Abuse
CAN BE CONTROLLED
MAY NOT BE CONTROLLED
Fraud: “…is largely a deliberate deception to secure an unfair gain. This could be a monetary, contractual or other type of advantage that is unlawful.”
Improper Payments: ‘‘(A) means any payment that should not have been made or that was made in an incorrect amount (including overpayments and underpayments) under statutory, contractual, administrative, or other legally applicable requirements; and ‘‘(B) includes any payment to an ineligible recipient, any payment for an ineligible good or service, any duplicate payment, any payment for a good or service not received (except for such payments where authorized by law), and any payment that does not account for credit for applicable discounts.”
Error: Oops, but NOT “oops I did it again…”
Working Definitions
Undetected Errors
Toolkit to Combat Fraud, Waste, and Abuse. Improper Payments Elimination & Recovery Act of 2010
Administration & Finance > Fiscal oversight, monitoring, and auditing
Programmatic Oversight > Federal Rules > State Regulations > State Plan and programmatic policies & procedures
Segregation of Duties (State) > Fiscal monitoring & payment controls.
> Program monitoring, reporting, & oversight.
Segregation of Duties (LAAs) > Client certification, vendor authentication, eligibility, authorization, post audit.
> Contracting, payments, reconciliation, etc.
DHCD Fraud Reporting > LAA> State Program > Legal > < IG, law enforcement >
Where Does Fraud Prevention Fit in?
Massachusetts LIHEAP Performance System Involves Program and Fiscal Integrity Measures
Clients > LAAs > Vendors > State Related Party Transaction Policy. Identify structural failure points, and “close
those” ASAP. Conduct periodic risk assessments. Review online application, electronic fund,
transfer, client eligibility process, and IT security standards.
Frequent training. Annual employee certification. Review employee job descriptions to ensure
segregation (decision tree). Start data mining to identify trends, clusters,
etc.
Actions > Prosecution
What are the “entry” points?
Are there any “flood-gates”?
Risk Assessment models
Cyber/IT fraud?
Awareness training.
Employee acknowledgement of policies & procedures.
Segregation of duties.
Post Audit.
Prevention
Is Fraud Predictable?
LIHEAP Prevention to Actions > Prosecution
Audit Findings – continue to have no audit findings (enhanced).
Compliance Monitoring – onsite & desk monitoring must reduce error rates, increase LAA capacity & assert policies (enhanced).
Fraud Reporting – clients including public have access to fraud reporting. Reports to program and legal for further action (standard).
Picture ID – required, also ID will be verified through transitional assistance, SSA, and other third parties (standard > enhanced).
Massachusetts LIHEAP Program Integrity Model
Address - Verified, de-duplicated, and normalized (enhanced).
Social Security Number – Requested/Required (standard).
Social Security Verification – Required (in process, enhanced).
Applicant Income – Documented and verified (in certain cases) with transitional assistance, SSA, and Dept. of Revenue. (standard > enhanced).
Privacy-Protection and Confidentiality – IT security standards, Mass. General Laws, Executive Order Certification (enhanced).
Massachusetts LIHEAP Program Integrity Model
Benefit Policy – vendor payments, electronic billing, eligibility, cash request, payment process, and vendor payment reporting (enhanced).
Unregulated Vendors – vendor contracts, activation, and authentication process (enhanced).
Training and Technical Assistance of employees, non-governmental staff, vendors – Fraud awareness, reporting, vendor management, payment controls, and IT security (enhanced).
Massachusetts LIHEAP Program Integrity Model
LIHEAP Cases
Household Composition/size
Household Income
Desertion
Zero Income claims
Support from others
No oil
Check alteration
Tenant/Landlord situations
MA IHEAP Reported IncidencesGraphics: http://4.bp.blogspot.com/_ef_M4U2nwus/S3UzOmpaSSI/AAAAAAAAESQ/RyJmAxOeuGA/s320/FRAUD-O-METER.bmp
The LIHEAP Application is submitted under penalty and perjury.
Uses a single application for LIHEAP and Energy Efficiency programs.
There are stop pay, recoupment, and fraud reporting policies in place.
Vendor debarment, non-renewal, or other cancellations can be invoked.
LIHEAP software can block certification or payment activities.
LAA can sanction their employees leading up to other actions.
State employees are subject to State Ethics, Conflict of Interest & other strict laws & rules – fines and other disciplinary actions.
Consequences
Current Policies
Most Important Contributing Factors to Fraud
Scott Olsen, MA Office of the State Comptroller/Association of Certified Fraud Examiners 2012 Report to the Nation on Occupational Fraud & Abuse. www.acfe.com
Fraud Prevention Tools
http://www.mass.gov/hed/docs/dhcd/cd/liheap/fy14liheap-progintegrity.pdfhttp://www.mass.gov/ago/public-safety/combating-fraud-and-corruption/http://www.acfe.com/fraud-triangle.aspxhttp://fraudtalk.blogspot.com/http://www.mass.gov/ig/about-us/contact-the-office.htmlhttp://papers.ssrn.com/sol3/papers.cfm?abstract_id=1804219
Akm RahmanCommonwealth of MassachusettsMassachusetts Department of Housing & Community DevelopmentDivision of Community Services100 Cambridge Street, Suite 300Boston, MA 02114www.mass.gov/[email protected]
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