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 2

OIG Mission 3 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 RESPONSIBILITIES 4 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 5

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 6

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 7

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) 8

Bridge Card Trafficking  The buying and selling of Bridge Card benefits for cash and/or other prohibited items 9

Bridge Card Trafficking 10 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

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 recipients  Partnered investigations with federal, state and local law enforcement agencies  Public and media outreach 14

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 15

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 16

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 17

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 18

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 19

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 $

Fraud Dollars Established by Program 21

Receivables Established 22

QUESTIONS Alan Kimichik, Inspector General (517)