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NCJ Number: 63688 Find in a Library
Title: WELFARE FRAUD - THE TIP OF THE ICEBERG
Journal: NATIONAL JOURNAL OF CRIMINAL DEFENSE  Volume:3  Issue:1  Dated:(SPRING 1977)  Pages:163-188
Author(s): R M REED
Corporate Author: National College of Criminal Defense Lawyers and Public Defenders
College of Law
University of Houston
United State
Date Published: 1977
Page Count: 26
Sponsoring Agency: National College of Criminal Defense Lawyers and Public Defenders
Houston, TX 77004
Format: Article
Language: English
Country: United States of America
Annotation: ACTUAL COSTS INVOLVED IN WELFARE FRAUD DETECTION, ESPECIALLY IN THE AID TO FAMILIES WITH DEPENDENT CHILDREN PROGRAM, ARE EXAMINED IN ORDER TO ASSESS THE GOVERNMENT'S SUCCESS IN REDUCING TOTAL WELFARE COSTS.
Abstract: IN 1975, THE AID TO FAMILIES WITH DEPENDENT CHILDREN PROGRAM COST FEDERAL AND STATE GOVERNMENTS $8.4 BILLION, OF WHICH $5.4 BILLION WAS PAID BY THE FEDERAL GOVERNMENT. BOTH FEDERAL AND STATE ADMINISTRATIVE COSTS HAVE RISEN DRAMATICALLY, ALTHOUGH THE NUMBER OF WELFARE RECIPIENTS HAS REMAINED RELATIVELY STABLE. THE DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE (DHEW) HAS TRIED TO CONTROL RISING WELFARE COSTS BY ESTABLISHING MANDATORY QUALITY CONTROL LIMITS AND MANDATORY FRAUD DETECTION REQUIREMENTS. ANALYSIS OF STATE WELFARE FRAUD LAWS AND ADMINISTRATION, AS WELL AS FRAUD PROSECUTION IN TEXAS SHOWS THAT ADMINISTRATIVE COSTS OF FRAUD DETECTION OFTEN EXCEED 25 PERCENT OF THE MONEY PAID TO RECIPIENTS. THE SALARIES FOR THE TEXAS FRAUD INVESTIGATION UNIT COST OVER $4 MILLION PER YEAR, YET REDUCE WELFARE COSTS BY ONLY ABOUT $1.5 MILLION. ADDITIONAL FRAUD CONTROL COSTS INCLUDE OFFICE SPACE, EQUIPMENT, TRAVEL, PROSECUTION, STATE-PAID DEFENSE COUNSEL, AND JUDICIAL ADMINISTRATION. BY PUBLISHING ONLY ERROR RATES, DHEW HAS ENCOURAGED ERROR REDUCTION WITHOUT ATTENTION TO ATTENDANT COSTS. THE ANALYSIS SUGGESTS THAT CURRENT FRAUD DETECTION APPROACHES ARE NOT COST EFFECTIVE, AND ALTERNATIVE APPROACHES ARE NEEDED. ELIGIBILITY DETERMINATION SHOULD BE CHANGED FROM THE CURRENT COMPLEX AND SUBJECTIVE SYSTEM TO ONE WITH OBJECTIVELY VERIFIABLE CRITERIA WITH INCENTIVES FOR REPORTING INCOME. A NEGATIVE INCOME TAX SHOULD BE ESTABLISHED. OVERALL, A SIMPLE SYSTEM INCLUDING ACCOUNTABILITY, WORK INCENTIVES, AND A COST EFFECTIVE PRODUCT IS NEEDED. FOOTNOTES ARE INCLUDED. (CFW)
Index Term(s): Cost effectiveness analysis; Crime detection; Federal aid; Federal programs; Fraud; Income maintenance programs; Law enforcement costs; Program monitoring; Right to Due Process; State laws; State regulations; Texas; Welfare services
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http://www.ncjrs.gov/App/publications/abstract.aspx?ID=63688

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