Federal rules prevent state caseworkers administering disaster benefits from denying applicants who fail to provide verification of their income. But a state auditors report found that caseworkers weren’t trained to ask for verification in the wake of Tropical Storm Irene.
In the report released Thursday, state auditors attempted to analyze the Department of Social Services administration of the Disaster Supplemental Nutrition Assistance Program in the aftermath of Irene.
The state has known for some time that many of the 23,000 applications that were approved for disaster benefits shouldn’t have been.
In December, Gov. Dannel P. Malloy announced that some of the state employees who received benefits didn’t actually qualify. Some private sector individuals also had their names forwarded to the Chief State’s Attorney’s Office for possible prosecution.
Over the next few months more than 100 state employees lost their jobs over the alleged fraud. About 40 of them got their jobs back in June through arbitration.
But the auditor’s review of the administration of the program as well as the department’s fraud investigation found that more ineligible people received benefits than the department had believed.
The biggest contributor to the distribution of ineligible benefits seemed to be permissive federal rules regarding income verification. The federal government asks that an applicant’s income be verified, but only if possible and state caseworkers are not permitted to deny someone benefits if their income can’t be demonstrated.
The idea is that in some disaster scenarios, it may be difficult for applicants to get their hands on bank statements or other documents to verify how much they make and allow administrators to determine whether they qualify for D-SNAP benefits.
But the auditors note that should not have been an issue in the case of the Irene benefits, given that the program was administered nearly a month after the storm hit.
Though the state issued a press release asking residents to bring proof of their income when applying for benefits, the auditors found that the department did not require or train its caseworkers to ask for that verification.
“If DSS caseworkers had requested verification of assets from all D-SNAP applicants, the number of approved cases which were later determined to be ineligible, and the amount of fraud associated with the program could potentially have been lessened,” the report said.
Sen. Joe Markley, R-Southington, asked the state auditors to conduct their analysis. On Thursday, he said the report proved the program had been poorly administered. He said caseworkers should have been asking for more information.
“Even if they couldn’t have compelled people, the very fact of asking, I think would have discouraged people who weren’t eligible,” Markley said. “The tragedy of it is by administering a lax program we effectively encouraged people to break the law.”
In a written statement Social Services Commissioner Roderick L. Bremby said the department has already proposed stricter oversight measures to the federal government.
“We recommended to the U.S. Department of Agriculture’s Food and Nutrition Service that states be allowed to require verification of applicants’ financial information,” Bremby wrote. “This would give Connecticut and other states more tools to prevent and root out abuse when operating a D-SNAP program.”
Bremby said it was worth noting that states administer the program according to federal requirements and Connecticut conducted more post-disaster reviews than the surrounding states.
The auditors also found a handful of mistakes made on approved applications. Eight weren’t signed by a caseworker; three didn’t report any expenses from the storm; 10 had no storm expenses beyond spoiled food; in four instances no eligibility calculation was made or the calculations were erroneous.
The auditors found that six applications were approved despite a lack of identification or proof of residency with the application. And in 26 instances disaster expenses were subtracted from the applicants income for eligibility determination when they shouldn’t have been.
But the department had anticipated far fewer applicants than actually applied.
Two weeks after Irene hit in late August, the Department of Social Services applied for the federal disaster relief benefits. At the time it was anticipating around 3,000 residents would apply for benefits based on the number of people who sought assistance from FEMA.
After DSS was approved to administer the program, more than 25,000 residents applied for the benefits. According to the auditors, about 23,000 had their applications approved and federal assistance under the program totalled more than $12 million.
Markley said the department grossly underestimated the number of people who would apply.
“I think they failed to respond quickly when they found that they were at a whole different level of demand,” he said.
The audit also turned up more examples of benefits going to ineligible applicants.
For instance the state wasn’t counting all the public workers who actually applied. After Malloy directed DSS to conduct an investigation of applications made by government employees, the department matched social security numbers from applications with the Labor Department’s wage inquiry system and turned up 913 state employees who received D-SNAP benefits.
But the auditors used the Core-CT, the state’s accounting system, and found another 131 state workers the Social Services Department missed.