THE OFFICE INVESTIGATED ALLEGED ABUSES AND IRREGULARITIES IN THE STATE AID TO FAMILIES WITH DEPENDENT CHILDREN (AFDC) PROGRAM, THE FOOD STAMP PROGRAM, AND THE MEDICAID PROGRAM, RELATIVE TO RECIPIENTS, EMPLOYEES ADMINISTERING THE PROGRAMS, AND VENDORS PROVIDING SERVICES TO RECIPIENTS. ABOUT 14,537 CASES WERE UNDER ACTIVE INVESTIGATION WITH WORK COMPLETED ON 10,305 BY DECEMBER 31, 1977. OF THE 4,232 CASES UNDER REVIEW OR ACTIVE INVESTIGATION, 2,454 WERE REFERRED TO THE APPROPRIATE STATE ATTORNEY FOR DECISION ON PROSECUTION. THE STATE ATTORNEY TOOK ACTION ON ABOUT 90 PERCENT OF THE CASES REFERRED BY THE FRAUD UNIT. COURT ACTION WAS TAKEN ON 1,685 DEFENDANTS CHARGED BY STATE ATTORNEYS WITH PUBLIC ASSISTANCE FRAUD, AND 91 PERCENT (1,544) WERE FOUND GUILTY. ALTHOUGH SOME DEFENDANTS WERE JAILED, MOST SENTENCES IMPOSED WERE FOR RESTITUTION AND PROBATION. THE DIVISION USED AN UNRESTRICTED RANDOM SAMPLE TO CHOOSE THE FAMILIES FOR THE AFDC REVIEW. GRANTS WERE MATCHED WITH THOSE SELECTED FOR REVIEW, AND PERSONAL INTERVIEWS CONDUCTED. FACTORS CONSIDERED FOR ELIGIBILITY IN THE WERE AFDC PROGRAM WERE THE SAME AS THOSE USED IN THE FOOD STAMP PROGRAM. THIRTY NURSING HOMES WERE REVIEWED FOR SOLICITING CONTRIBUTIONS FROM RELATIVES OF MEDICAID PROGRAM PATIENTS. OF THE 2,454 CASES REFERRED TO THE STATE ATTORNEY, 1,719 WERE FROM THE AFDC PROGRAM RECIPIENTS, 711 FROM FOOD STAMP PROGRAM RECIPIENTS, 14 FROM NONPROGRAM RECIPIENTS, AND 10 FROM MEDICAID PROGRAM PROVIDERS (VENDORS). SUMMARIES OF CASE AND JUDICIAL STATISTICS ARE APPENDED. (KHM)