Retired Administration Officials Say Welfare Fraud Rampant Under Rendell
Legislators find governor turns blind eye to fraud as they look to reform costly welfare system
HARRISBURG – Procedural changes to the Department of Public Welfare under the Rendell administration have led to heightened abuses of the system and a lower rate of fraud investigations, according to two former officials from the Office of Inspector General (OIG), Becky and Mike Hayes. The House Republican Policy Committee, chaired by Rep. Mike Turzai (R-Allegheny), has made welfare reform one of its top issues. 
Mike Hayes is the former operations manager and Becky is the former central regions investigations manager for the Office of Inspector General. 
“What the committee has uncovered is that the Rendell Administration has turned a blind eye to fraud and abuse within our state welfare programs,” said Turzai. “They have allowed millions in taxpayer dollars to be taken by those who abuse the system. We need to restore integrity and promote personal responsibility and incentive to work.
“We want the truly needy and deserving to get the help they need, but at the same time we need to root out fraud and abuse,” he added.
Prior to the Rendell administration, welfare caseworkers worked hand-in-hand with the OIG field investigators. Under this collaborative effort, the caseworkers and the investigators had direct access to one another, where the caseworker could directly make an investigation referral to the OIG. In an effort to cut down on the amount of fraud, the OIG would make sure that welfare applicants provided accurate information through Application Verification Investigations (AVIs).
Mike Hayes said that at the height of the AVI program, the investigators received close to 40,000 referrals a year; however in 2003 they began to see a decline to approximately half of that number.
Mike Hayes also noted that Department of Public Welfare (DPW) Secretary Estelle Richman let it be known that she did not support the AVI program, stating that she would rather see people who committed fraud get on the system, rather than deny one welfare mother benefits.
The OIG deals exclusively with welfare fraud investigations, while the DPW handles all application procedures.
Procedural changes implemented after Rendell took office, changed the system so that the caseworkers no longer had one-on-one interaction with the investigators. The change added more bureaucracy to the system, making it so that all referrals had to be approved by a supervisor or office manager before the inspectors could be notified.
Becky Hayes described how this change in policy drastically reduced the amount of investigated fraud referrals. In York County, the OIG staff, which included 2 investigators, looked into an average of 90–105 referrals a month before 2003. At this point in time, the staff was overwhelmed with the number of caseloads, at one point requiring a third investigator. After several months she saw a decline in the number of referrals, to the point that when she left the OIG in 2005 there were some months when the monthly referral rate dropped to one or two, sometimes even having months with no case referrals at all. If the investigators did not receive a referral, they couldn’t put applicants through the AVI program. 
Becky Hayes also commented on the department slogan ‘close your eyes and authorize.’ She said that under this campaign, as soon as applicants walked through the door, they could get whatever benefits they wanted.
“In my personal opinion, I don’t believe there was the same level of concern (from the Rendell administration compared to former administrations) to address the integrity of the program,” Becky Hayes said. “I loved my job, I really didn’t want to retire, but my level of frustration at not being able to do anything (about the fraud cases) got to be too much.”
Today’s hearing was the fourth in a series that the House Republican Policy Committee has held on welfare reform.
Rep. Mike Turzai
28th District
Pennsylvania House of Representatives
(412) 369-2230
Contact: Tricia Graham
House Republican Public Relations
(717) 260-6296
April 30, 2007