LIHEAP Program Integrity
The June 2010 release of the Government Accountability Office (GAO) report entitled Low Income Home Energy Assistance Program: Greater Fraud Prevention Controls Are Needed was a significant development in LIHEAP history. Upon the request of a U.S. Congressman, the GAO analyzed LIHEAP data from seven states (Illinois, Maryland, Michigan, New Jersey, New York, Ohio, Virginia) for fraud indicators, interviewed federal and state officials, performed investigations, and conducted proactive testing in two states (Maryland and West Virginia) using a fictitious company, individuals, addresses, and documents.
The seven states were primarily selected based on the size of their LIHEAP grant and availability of a centralized LIHEAP database. The GAO report set in motion a process that made Program Integrity a central focus of LIHEAP grantees.
Background Materials on LIHEAP Program Integrity
The Government Accountability Office (GAO) Report
Income Home Energy Assistance Program: Greater Fraud Prevention Controls
Are Needed, June 2010
- Key Conclusions:
- LIHEAP Is at risk for fraud and improper benefits in selected states
- The federal government and selected states lack an effective fraud prevention framework for LIHEAP
- Key Conclusions:
"The selected states do not have an effective design for a comprehensive fraud prevention framework. In fact, the states lack key efforts in all three crucial elements of a well-designed fraud prevention system: preventive controls, detection and monitoring, and investigations and prosecutions."
"...We believe that these are key preventive control measures that states should integrate in their application processes as long as the costs of these controls do not outweigh the benefits."
Recommendations for Executive Action
- "To establish an
effective fraud prevention system for the LIHEAP program in the seven
states, the Secretary of HHS should evaluate our findings and consider
issuing guidance to the states addressing the following six recommendations:"
1. Require applicants and household members to provide Social Security numbers for themselves and all members of the household in order to receive energy assistance benefits.
2. Evaluate the feasibility (including consideration of any costs and operational and system modifications) of validating applicant and household member identity information with SSA.
3. Develop prepayment edit checks to prevent individuals from receiving duplicate benefits.
4. Evaluate the feasibility of using SSA's or states' vital record death data to prevent individuals using deceased identities from receiving benefits.
5. Evaluate the feasibility of preventing incarcerated individuals from improperly receiving benefits, for example, by verifying Social Security Numbers with state's prisoner information.
6. Evaluate the feasibility of using third-party sources (e.g., State Directory of New Hires) at a minimum on a random or risk basis, to provide assurance that individuals do not exceed maximum income thresholds.
HHS Responses to GAO Report
- Issued guidance to states via Information Memorandum (IM) related to program integrity, including new guidance to states affirming that they may use Social Security Numbers (SSN) to validate that individuals and households receiving LIHEAP benefits are eligible and in need of the services this vital program provides. HHS did so after concluding that while HHS lacked the authority to require states to mandate provision of SSNs, states do have the authority under the Privacy Act to choose to require the provision of SSNs. (Issued May 5, 2010)
- Issued guidance to states via IM encouraging states to exercise diligence when qualifying LIHEAP applicants by making use of governmental systems, such as prisoner databases and the Social Security Enumeration Verification System to ensure validity of applicants and household members and decrease error. (Issued May 5, 2010)
- Issued Action Transmittal (AT) requiring that states report on their systems for ensuring program integrity, including provisions to prevent waste, fraud and abuse, and provisions to assure LIHEAP vendor validity as a supplement to their FY 2011 State Plan, which was due to HHS September 1, 2010 (Issued June 8, 2010). These state plan supplements are an ongoing requirement for grantees. For most recent Program Integrity Assessments from states, please click here.
- Developed Workgroup on Program Integrity. HHS funded a LIHEAP Program Integrity Working Group (LPIWG), composed of state and local agency LIHEAP directors, national stakeholder group representatives, and staff from other federal agencies. The group met during 2011 and reviewed existing LIHEAP internal controls in the areas of eligibility, fiscal management, oversight and monitoring and investigation and prosecution. It also investigated internal controls in other means-tested federal programs. It provided HHS with a report on its findings in June 2012.
- Responded to LPIWG
with Training Initiatives: On September 28, 2012,
HHS awarded four new contracts to help support improved program integrity
in LIHEAP while beginning implementation of recommendations from the LPIWG
as well as the Performance Measures Implementation Working Group (PMIWG).
The four contracts and their purposes are:
- LIHEAP Training and Technical Assistance Support to enhance understanding and implementation of the program integrity, data reporting and performance measurement initiatives through development of a federal training curriculum covering such topics as program integrity, performance measurement/management, and key programmatic areas (e.g., eligibility verification, vendor agreements, administration, monitoring, etc.
- LIHEAP Accountability and Third Party Verification Support to investigate options for applying third-party verification processes to enhance program integrity through assessment of grantee capacity for such processes.
- LIHEAP Web-Based Data Collection Tool to create a web-based tool that will systematize the process of reporting and analyzing of LIHEAP performance measures.
- LIHEAP Programmatic and Financial Review Support to provide increased resources for oversight and monitoring the use of federal funds through LIHEAP by expanding the human resource capacity of OCS for conducting compliance reviews (both on site and desk reviews).