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GRAND JURY: $500 MILLION IN FRAUD CHILD-CARE PROGRAMS CALLED `ATMS FOR THIEVES' IN REPORT.

Byline: TROY ANDERSON Staff Writer

Calling Los Angeles County child-care programs an ``ATM for thieves,'' the county grand jury on Thursday said welfare recipients and their friends and relatives are defrauding taxpayers of $500 million a year, much more than previously estimated.

Failure of the county Department of Public Social Services to verify that welfare-to-work recipients qualify for child care has resulted in about half of the $1.1 billion CalWORKS child-care program being lost to fraud, jurors wrote in their report.

``Widespread abuse ... has created a program culture that encourages fraud by parents, child care providers and agency employees,'' the report said.

District Attorney Steve Cooley, who was formerly head deputy of the Welfare Fraud Division, said he had brought the issue -- as well as other problems -- to the attention of previous grand juries and officials but they showed little interest.

``The Board of Supervisors should act immediately,'' Cooley said. ``The state Legislature and the governor should really get involved in the anti-fraud business.

``They are all good about giving money away, but they are very, very poor about protecting the taxpayers' interest and they are basically causing a transfer of wealth to individuals who don't need and aren't receiving services.''

Tony Bell, spokesman for county Supervisor Michael D. Antonovich, said the supervisor will introduce a motion Wednesday seeking a full report from the DPSS on what it will do to follow the grand jury's recommendation that the agency verify that welfare recipients' children are actually being cared for while they are at work.

``This is an affront to the taxpayer,'' Bell said. ``It's unconscionable and criminal. We want to ensure that the department is working vigilantly to detect and prevent this type of abuse.''

But Phil Ansell, director of program and policy at the DPSS, said the jurors' study cannot be used to draw conclusions about child-care fraud because it was not specifically a fraud study.

He also noted that lawmakers estimated the amount of fraud at 1 percent to 7 percent.

In 1998, Cooley briefed the grand jury about people driving expensive cars, going on expensive foreign vacations, living in luxurious homes and, in some cases, possessing hundreds of thousands of dollars in cash, and running unreported cash businesses -- all while collecting welfare.

The grand jury made a series of recommendations, which the Board of Supervisors adopted. This included a home-visitation program.

In 1999-2000, the grand jury found that the DPSS was resistant to change and many previous recommendations had not been implemented. The jury called on the board to place a higher priority on oversight of the DPSS.

DPSS then adopted a home-visitation program with limited success, finding fraud in about 5 percent of cases while a similar program in San Diego finds fraud in more than 20 percent of cases.

The scam typically involves welfare-to-work recipients who fabricate employers or exaggerate work hours to qualify for child care. Then they split the money with friends and relatives who claim to be caring for the children.

Some parents in the welfare-to-work program earn very little income -- a few hundred dollars per month -- but are reimbursed thousands of dollars per month for miles driven and child-care expenses, grand jurors wrote.

Jurors also noted that the same person who is paid to provide child-care services might also receive pay as an in-home careworker.

``A CalWORKS participant/parent could be employed to provide IHSS services to the same person providing their child care,'' jurors wrote. ``There is no cross check.''

Between September 2004 and February 2006, jurors wrote that 49 people cheated the child-care program of $3.4 million and were prosecuted.

Currently, more than 800 child-care fraud investigations are under way, but jurors wrote that DPSS personnel have inadequate training to detect fraud.

The grand jury made 18 recommendations that call for random and unannounced visits at least once every 90 days to child-care sites to verify the children's presence, the acceptance of only original documents and daily parental sign-in and sign-out sheets.

David Sommers, spokesman for Supervisor Don Knabe, said a portion of the program is administered by the state and has no fraud monitoring program. Sommers said Knabe sponsored Senate Bill 1421 that would have started a pilot project in the county to identify the best strategies for combatting child-care fraud, but it died in committee recently after lawmakers balked at funding the program.

``The state needs to become aware that there are ways to combat child- care fraud for the money they are putting into the system,'' Sommers said.

troy.anderson(at)dailynews.com

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Publication:Daily News (Los Angeles, CA)
Date:Jun 30, 2006
Words:761
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