MEASURING IMPROPER PAYMENTS IN SOCIAL SERVICE BLOCK GRANT (SSBG)HURRICANE SANDY SUPPLEMENTAL FUNDS

Michael Salmon, M.A. Research Manager

Stefan Bishop, B.A.Research Assistant

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• Brief Description of Social Services Block Grant (SSBG) and Hurricane Sandy Supplemental Funds (HSSF)

• Development of SSBG Improper Payment Methodology and Error Rate Reviews

• Development of Review Tools and Sampling Criteria

• Computation of Errors and Error Reporting for SSBG HSSF

• Conducting FY 2014 Error Rate Reviews and applying lessons learned to FY 2015

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R RATE SOCIAL SERVICES BLOCK GRANT (SSBG)

• Provides grants to 50 States, DC, PR, and Territories for social services

• States can identify usage of funds within 29 service categories

• No eligibility criteria but State activities must be consistent with the general goals of the program

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Disaster Relief Appropriations Act, 2013 (DRAA) $474.5 million in Hurricane Sandy Supplemental Funds (HSSF) to five SSBG States:

All DRAA funded Federal programs deemed susceptible to improper payments, and required to calculate an error rate

State Percentage Share of State FEMA Individual Assistance Registrants

SSBG Hurricane Sandy Supplemental

Fund AllocationNew York 49.62% $235,434,600New Jersey 47.80% $226,794,105Connecticut 2.23% $10,569,192Maryland 0.25% $1,185,675Rhode Island 0.11% $516,428Total $474,500,000

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Case Record Review

Direct benefit or payment amounts to or on behalf of individuals or households(i.e., cases) based on specific eligibility criteria

Vendor Payment Review

Indirect benefits or services, including group intervention services, expansion of service staffing levels, or grants for the repair/renovation/rebuilding of service facilities

TWO-FOLD (BIFURCATED) METHODOLOGY

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Case Record Review

• New Jersey: 12 awards, $157 million, 70% of allocation

• New York: 34 awards, $32 million, 14% of allocation

• Connecticut: 1 award, $700,000, 7% of allocation

Vendor Payment Review

• New Jersey: 44 awards, $64 million, 28% of allocation

• New York: 226 awards, $113 million, 48% of allocation

• Connecticut: 4 awards, $9 million, 93% of allocation

TWO-FOLD (BIFURCATED) METHODOLOGY

Error rate reviews will encompass $378 million (80%) of all SSBG HSSF allocated to New York, New Jersey, and Connecticut.

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Case Record ReviewSampling Unit

• individual, family, or household receiving a payment/benefit

Sampling Universe• all cases served by selected

vendors during review period

Sample Size• 383 cases for New York • 383 cases for New Jersey • 73 cases for Connecticut

Vendor Payment ReviewSampling Unit

• State payment made to a vendor for HSSF expenditures

Sampling Universe• all vendor payments made

within selected contract awards during review period

Sample Size• 341 payments for New York• 224 payments for New Jersey• 12 payments for Connecticut

TWO-FOLD (BIFURCATED) METHODOLOGY

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Case Record Tools

Review client records for completeness of application and eligibility materials, and accuracy of service benefits

Vendor Payment Tools

Review payments and invoices according to State policies for approval

ERROR RATE REVIEW TOOLS

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Developmental questions and challenges:

• Approach

• Flexibility of Block Grant Funding

• Specialization of Review Tools

• Timeline for Implementation

• State Readiness

FY 2014 SSBG ERROR RATE IMPLEMENTATION

• FY 2014 SSBG improper payment reviews based only on case record review in New Jersey

• FY 2014 SSBG Error Rate: 13.5%

• Majority of funds in error (74%) resulted from a single vendor in a single service program

• State response too late to adjust error rate downward

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Efforts to improve error rate reviews in FY 2015 include:

• Quarterly improper payment sampling in each State

• Remote reviews (where possible) to save time and burden

• 30-day State response periods

• Improved collection and organization of records

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R RATEFY 2015 SSBG ERROR RATE DEVELOPMENT

Case record and vendor payment reviews for all three States—Connecticut, New Jersey, and New York

• One national error rate

Conducting six separate reviews

• State and Vendor Interviews

• Late Start for New York and Connecticut

• New Jersey’s decentralized payment approval processes

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R RATEFY 2015 SSBG ERROR RATE IMPLEMENTATION

• Despite delays, great improvement in organization and efficiency of reviews

• Success of Improvements since FY 2014

• Final FY 2015 results still under review

• States’ extended use of funds through FY 2017

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Today’s presentation focused on the challenges of implementing a new improper payment methodology for a flexible, multi-service block grant program, including:

• Developing multiple review types across several States

• Specializing review tools to State- and vendor-specific policies and procedures

• Computation of errors and error reporting

• Developing best practices for future reviews in light of lessons learned

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R RATECONCLUSION

Thank you very much for your time today.

Please let us know if you have any questions!