Minnesota Department of Human Services wins national CIO award

Bull Services customer recognized by NASCIO for innovative effort to prevent and eliminate welfare fraud

The National Association of State CIOs (NASCIO) selected the State of Minnesota Department of Human Services (DHS) as its first place winner in the organization’s 2007 Recognition Awards competition in the category “Data, Information, and Knowledge Management.”

NASCIO recognized Minnesota DHS for its Program Integrity efforts to reduce and eliminate welfare fraud.

Long considered a leader in the quality and administration of its Human Services programs, the State of Minnesota recognizes how critical it is for taxpayers to continue to trust in the overall honesty and integrity of public assistance programs for the State’s neediest citizens. Minnesota’s Family Investment Program (MFIP) is the State’s primary vehicle for helping low-income families with children make the transition from poverty into the workplace. In 2006, state spending for MFIP cash and state food assistance was $55 million and federal spending was $224 million (with $117 million of this for food assistance). Some 37,000 Minnesota families used MFIP in an average month during 2006.

Such a broad-based program requires sophisticated program integrity efforts to ensure that Minnesota taxpayers are receiving the best return on their investment, and that cash and food assistance funding is available for those who truly need it. Minnesota has developed one of the most comprehensive fraud-fighting efforts in the country – a three-step process that involves front-end analysis, criminal investigations, and collections. Known as the Program Integrity Network (PIN), it is designed to improve the accuracy of public assistance eligibility determinations, and to help prevent, control, recover, and evaluate public assistance program payments made to ineligible persons.

Relying on a Business Intelligence (BI)/enterprise data warehouse as their informational and knowledge backbone, the PIN system was originally designed for use by welfare fraud investigators, and it has expanded its base over the last few years to serve more than 300 people from several different professional categories (117 fraud investigators, 51 collectors, 42 quality control reviewers, and 61 supervisors make up the bulk of these). The front-end process, the Fraud Prevention Investigation (FPI) program, involves state and county staff members working collaboratively to prevent and control recipient fraud in Minnesota’s child care, health care, and food programs.

Because the BI/data warehouse links data from a variety of disparate sources (welfare eligibility system, medical eligibility, child support, wage and employer data, auto registrations, and more), investigators are quickly able to build economic, demographic, and behavioral profiles with complaints that have been filed against individuals to determine if further investigation is warranted. Moreover, the BI/data warehouse enables investigators to construct queries using their own knowledge and to drill down intuitively, as opposed to the more onerous process that was once in place using mainframe-based data.

The results have been dramatic. For example, most recently, in 2006 investigators: completed more than 7,400 front-end investigations; in 45 percent of them, benefits were stopped or reduced; found and corrected case file information discrepancies in 70 percent of the investigations; identified more than $12.2 million in cost-avoidance, (benefits not paid) and overpayments; and stopped disbursement, or identified for collection, $4.46 for every $1.00 spent on program administrative costs.

Once the front-end process is completed, some welfare fraud cases may rise to felony theft levels and require the involvement of the criminal justice system. In 2006, criminal investigators completed nearly 2,500 criminal investigations (in 60 percent of them, investigators proved benefits had been illegally obtained, and, at a minimum, overpayments were assessed), and identified $5.2 million in overpayments. In the final Collections phase, the Treasury Offset Program intercepts federal payments and tax returns to recover Food Support debt. Total collections since the program’s inception in 1999 are $21.3 million.

By using the BI/data warehouse to link disparate data for meaningful analysis, investigators have developed sophisticated and targeted approaches to fighting welfare fraud in Minnesota, saving taxpayers millions of dollars, discouraging others from engaging in fraudulent behavior, and preserving funding for Minnesotans most in need.