MICHIGAN DEPARTMENT OF HUMAN SERVICES

Office of Inspector General

Budget Presentation – February 20, 2013

Office of Inspector General (OIG)

Criminal Justice Agency within Department of Human Services (DHS), created in 1972

Governed by State law 130 Staff On-Board, 118 Field Positions. Agents strategically located throughout

Michigan to provide investigative coverage for every county of Michigan

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OIG Mission3

The mission of the Office of Inspector General (OIG) is to assist the Michigan Department of Human Services in maintaining integrity and accountability in the administration of its programs. The OIG provides investigation and advisory services to ensure appropriate and efficient use of available public resources.

OIG RESPONSIBILITIES4

Investigate: Recipient fraud Vendor - Contractor fraud Provider fraud Employee fraud (Internal

Affairs)

Specialized Units

Investigative Analytics Unit (IAU): Data mining/analytical support of the office

Special Investigations Unit (SIU): Specializing in major investigations and

internal affairs investigations

Trafficking Unit: Specializing in FAP trafficking investigations

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Recipient Integrity Activities

Front End Eligibility (FEE) Investigations: Fraud Prevention - Referrals based on questionable

information in public assistance applications prior to case opening and payment of benefits

Internal referrals based on OIG data analytics Recipient Fraud Investigations:

Unreported income Unreported assets Misrepresentation of household circumstances Trafficking Hotline - Internet complaints

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High Risk Areas

Bridge Card Trafficking Internet “IP Address” Tracking

Assists in identifying the physical location of persons applying for benefits online (MiBr

PARIS: Interstate Match Indicator of individuals receiving duplicate

assistance

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High Risk Areas II

Social Media Monitoring Identifies individuals selling FAP benefits

Out-of-State EBT Transaction Monitoring Indicator of household living out of MI while

on public assistance in MI Bridge Card Transaction Trend Analysis

Identifies evolving FAP Trafficking trends Multiple Bridge Card Replacement

Indicator of FAP trafficking (selling EBT card)

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Bridge Card Trafficking

The buying and selling of Bridge Card benefits for cash and/or other prohibited items

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Bridge Card Trafficking10

2” Bullet Proof Glass; Lack of Counter

Transactions of $80-$200 were common at this location within minutes of each other

Meat expired in April of 2001

Store was raided 10 years later!

Raid Photo

Raid Photo

Eggs expired in September of 2009

(Raid occurred approximately 18 months later)

Nearly Empty Cooler

Raid Photo

FAP Trafficking Efforts

OIG has made FAP trafficking investigations a priority.Prioritization of investigative resources (Trafficking Agents)Identification of retailers and recipientsPartnered investigations with federal, state and local law enforcement agenciesPublic and media outreach

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OIG Trafficking Unit Statistics

$5.8 Million in Trafficked Benefits Identified

$4.1 Million in Fraud Receivables Established

1,652 Trafficking Cases Completed 184 IPV Hearings Conducted

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i-Sight Case Management System (in development)

Integration of three disparate databases Front End Eligibility (FEE) Recipient Fraud Provider/Employee Fraud

Automated Functionality Upgrades Development of an automated fraud tool from

data warehouse – Improve Analytics, Increase Efficiency, Improve Investigative Outcomes.

Improved communication to Field Agents and Prosecutors

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Recipient FAP Fraud FY 2012

9,907 FAP Recipient Fraud Investigations 7,702 Fraud (IPV) Dispositions

$14.2 Million in FAP Recipient Fraud 975 Criminal Warrants 1,124 IPV Hearings – IPV Established

4,400+ FAP IPV Disqualifications IPV DQ = $13M in Cost Avoidance

$11.3 Million in FAP Fraud Receivables

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OVERALL STATISTICS FY2012

30,296 FEE and Fraud Complaints 11,497 Recipient Fraud complaints

16,900 FEE investigations completed 6,065 recipient fraud investigative

dispositions. Recipient Fraud found: $22.6 Million Revenue generated: $19.7 Million in

fraud receivables

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FY2012 Cost Savings

Front End Eligibility $69,584,900 Recipient Fraud /IPV $22,690,534 IPV Disqualifications $14,419,620 Special Investigations $5,723,544_______________________________

TOTAL SAVINGS $112,418,599

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Front End Eligibility (FEE)

Return on Investment

FEE deters fraud; prevents improper payments and reduces errors. Provides eligibility workers with a resource for accurate case openings.Every dollar spent on FEE investigation efforts resulted in program cost savings of $26.00

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Fraud Dollars Establishedby Program

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Receivables Established22

QUESTIONS

Alan Kimichik, Inspector General(517) 335-3899

www.michigan.gov/dhs

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