IN RESPONSE TO A PARTICULARLY SIGNIFICANT FRAUD CASE IN WHICH A WOMAN USED FIVE DIFFERENT IDENTITIES TO RECEIVE FIVE DIFFERENT WELFARE CHECKS, THE COMMITTEE BEGAN TO INVESTIGATE THE EXTENT OF WELFARE FRAUD IN CALIFORNIA. DESPITE MAJOR EFFORTS TO CONTROL FRAUD, SEVERAL CONTROL PROBLEMS STILL PERSIST. NO METHOD EXISTS FOR CHECKING DUPLICATE AID CASES BETWEEN COUNTIES IN THE STATE OF CALIFORNIA OR FOR DETECTING, IN A SYSTEMATIC WAY, MULTIPLE CASE OPENINGS FOR THE SAME FAMILY OR INDIVIDUAL IN THE SAME COUNTY. ALSO, THERE REMAINS A HIGH LOSS OF WELFARE BENEFITS DUE TO MAIL THEFT AND AN EXCESSIVE BACKLOG OF SUSPECTED FRAUD CASES WHICH ARE PENDING INVESTIGATION. TESTIMONY TO THE COMMITTEE REVEALED THAT ONE FOOLPROOF METHOD FOR DETECTING MULTIPLE CASE OPENINGS IS A FINGERPRINT IDENTIFICATION SYSTEM WHICH USES A COMPUTER IDENTIFICATION CROSS-CHECK. THIS SYSTEM WOULD COST ABOUT $3 MILLION ANNUALLY, A FACT THAT RAISES THE QUESTION OF COST EFFECTIVENESS. ABOUT 50 PERCENT OF ALL FRAUD INVOLVES THE CLIENT'S FAILURE TO REPORT OUTSIDE INCOME. THE INADEQUACY OF AFDC (AID TO FAMILIES WITH DEPENDENT CHILDREN) PAYMENTS IS OFFERED AS ONE EXPLANATION FOR THIS FAILURE. ONE POSITIVE APPROACH TO FRAUD REDUCTION WOULD BE IMPROVED COORDINATION AND IMPLEMENTATION OF SELF-HELP PROGRAMS TO REDUCE NEED FOR PUBLIC ASSISTANCE. TESTIMONY ALSO EMPHASIZES THAT FRAUD PREVENTION THROUGH IMPROVED COMMUNICATION BETWEEN RECIPIENT AND WELFARE AGENCY IS BETTER THAN RELIANCE ON FRAUD DETECTION METHODS IN SOME CASES. STATEMENTS AND TESTIMONY WERE GIVEN BY PERSONNEL FROM VARIOUS CALIFORNIA STATE AND COUNTY SOCIAL WELFARE AGENCIES. (PRG)