Auditor general: LIHEAP still being abused
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HARRISBURG -- Four years after an audit uncovered criminal abuse of a home heating assistance program, benefits are still going to Pennsylvanians who don't meet eligibility guidelines -- including some who applied using Social Security numbers of dead people.
That's what the Office of Auditor General found when it revisited the Low-Income Home Energy Assistance Program, or LIHEAP, to see whether the Department of Public Welfare had improved its oversight since a 2007 audit.
It hasn't, according to Auditor General Jack Wagner, who released a follow-up audit report on Wednesday that showed ineligible applicants were still receiving benefits.
In one case, someone who died in 1999 was approved for $1,000 worth of benefits in 2010, auditors found. In another, an applicant who applied twice using different Social Security numbers, was approved both times.
What's worse, Mr. Wagner said, Welfare Secretary Gary Alexander, who has been in office about six months, doesn't see the need to change things.
The Welfare Department issued a statement later Wednesday, saying Mr. Alexander does not agree with all of the auditor general's findings.
"[Mr. Alexander] ensures the taxpayers of the Commonwealth that DPW is looking into the report and is continuing to find ways to stop fraud as well as ensure the LIHEAP program serves the citizens it is intended to help," DPW spokeswoman Anne C. Bale said in a release.
"DPW is currently in the middle of a department-wide program integrity initiative designed to ensure accountability, promote integrity and deter fraud. As a part of this initiative, we are [re-examining] all matters of policy, process, controls and systems currently in place to detect waste, fraud and abuse.
"Multiple deficiencies have already been identified, and changes are currently being implemented."
Mr. Wagner said the department is wasting time "mounting a campaign of denial" when it should be implementing changes.
Auditors also found that the department wasted $800,000 in LIHEAP funds by contracting with outside firms for work that could have been done in-house.
In one case, auditors found, the department gave a $203,500 no-bid contract to the Philadelphia law firm Hangley Aronchick Segal & Pudlin. The firm then subcontracted the work to accountants who did not sufficiently document their work and who seldom made on-site visits required under the contract.
"We found that the services rendered were inadequate and did not require the expertise/expense of a law firm," auditors wrote in their report.
Mr. Wagner said he does not blame the law firm, but he chided DPW for allowing no-bid contracts and for not properly overseeing the program.
The contract was enacted during the term of former Gov. Ed Rendell, who received at least $67,000 in campaign contributions since 2003 from the firm, its partners and its employees.
Partner Mark Aronchick, a major Democratic fundraiser for Mr. Rendell and national political candidates, has been a member of Mr. Rendell's inner circle for years.
The law firm did not respond to messages left at its Harrisburg and Philadelphia offices Wednesday.
Meanwhile, Mr. Wagner urged the Department of Public Welfare to act quickly to ensure only eligible applicants receive benefits under the $257-million-a-year program.
"Our patience is wearing out," he said. "The Department of Public Welfare must tighten its oversight of this vital program with great haste, because every dollar wasted is a dollar that will not be available to families who need assistance."
Auditors recommend that the department use competitive bidding processes, ensure applicants' Social Security numbers are valid, monitor suspicious transactions and develop written procedures for on-site monitoring.
The 2007 audit made similar recommendations that were largely ignored by the department, Mr. Wagner said.
Two years after that audit, seven welfare employees were convicted of theft and other charges related to fraudulent applications for the assistance program.
The program provides help to pay home-heating costs for households that meet eligibility limits of 160 percent of federal poverty guidelines. For example, a family of four with income below $35,280 can receive benefits.
First Published August 11, 2011 12:00 am