Critics say changes may hurt welfare fraud investigations

The Minnesota Department of Human Services is expanding its welfare fraud program to more counties.

Minnesota's welfare fraud program is successful; it saves the state about $4.50 for every $1 spent on investigations. But some rural Minnesota counties fear restructuring to a regional approach will overload investigators and weaken a successful program.

Clay County has two fraud investigators; most of their work has been in Moorhead. Now, they will also cover Becker County, an hour or more away.

Investigator Rick Ohren often needs to verify if people are living at a certain address. A case in Becker County can mean lot's of driving.

"We can go to houses in Moorhead many times a day because it's so close and be back at the office in five minutes," Ohren said. "Out there it's a little different. To be honest I was there last week and I was pretty much there six hours of my eight-hour day and never did find them at home.

"It's not a waste of time because you're doing your job, but you could be doing a lot of other things if you were here doing ten cases instead of there doing one," he said.

Restructuring the program is designed to expand fraud investigations from 55 to 74 counties. The state provides about $1.5 million a year to counties for fraud prevention and the legislature added $228,000 to expand the program.

"I'm not convinced that how the state has reconfigured this program is going to serve the people of Becker county nor the state very well."

The change to a regional approach means counties with programs that didn't meet cost-benefit ratios lost funding. Becker, Marshall, Polk and Wright were cut. State officials say they eliminated 2.5 positions, but will hire 4 new investigators. In many rural areas, other counties will take over investigations. In most cases there won't be any new investigators.

And the change to a regional approach is happening at the same time public assistance caseloads are growing.

Clay County investigators each averaged about 290 cases a year in the past. Three hundred cases are considered the high end for an investigator's case load. Fraud investigator Jim Backlund said this could be a record year in Clay County.

"I don't know if it's the economy or what, but this year there's a big jump in our caseloads," Backlund said. "We're at 290, that's our average for the year and we're only three-quarters of the way through the year. We could end up in the 330-340 range for the year. That would be our highest ever."

Backlund said adding Becker County will increase the caseload by about 25 percent.

Clay County fraud investigators will look for wrongdoing in all of their cases, but they will only do criminal investigations in their home county. Clay County Collections Supervisor Sandy Thorne said since criminal investigations are partially funded by the county, she can't afford to pay for investigations for a Becker County case.

There are two parts to a fraud investigation. The first is to find out if someone has income or assets they didn't report; payments can be cut off immediately. That's fraud prevention and it's funded by federal and state grants.

The second step is a criminal investigation, prosecution and restitution. Those investigations are funded by state and county dollars.

That's frustrating for the investigators, who say they want to finish cases they start.

It's also disappointing to Becker County Human Services Director Nancy Nelson. She's upset the county lost its funding and is concerned the result will be fewer welfare fraud investigations.

"I was just really disappointed that this happened this way," Nelson said. "Good program, it served not only Becker county but the state well. I'm not convinced that how the state has reconfigured this program is going to serve the people of Becker county nor the state very well."

Nelson said the state has not considered the extra time it takes to do investigations in rural areas.

State officials believe the regional approach will be effective.

Department of Human Services Assistant Commissioner Chuck Johnson said he understands investigators with large geographic areas might be less efficient, but he said many rural counties are very efficient at preventing fraud.

"We expect that we'll be able to maintain our cost-benefit ratio and that we'll collect more dollars back having more investigators out there and better coverage across the state," Johnson said. "We think it's important to have coverage so people in all counties know there are folks looking out for what's going on with public assistance dollars, both clients and taxpayers."

Johnson said it may take a few months for counties to adjust to the new structure, and rising public assistance caseloads may put more pressure on the system, but he's confident the regional approach will improve Minnesota's already successful fraud prevention program.

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