NCPA - National Center for Policy Analysis

FEDS WASTED MILLIONS IN UTILITIES PROGRAM FOR POOR

July 9, 2010

The Government Accounting Office (GAO), which monitors how Washington manages tax money, has uncovered yet another expensive boondoggle amid the well-intentioned federal giveaway of billions of dollars, this time in the Low-Income Home Energy Assistance Program, serving 8.3 million U.S. households. 

The program is supposed to provide low-income households "energy assistance," another way of saying government-subsidized air conditioning and heating.  But the feds paid $116 million in subsidies to applicants who used 11,000 dead people's Social Security numbers, to 725 imprisoned convicts and to 1,100 well-paid -- and ineligible -- government workers. 

The ultimate massive scale of these improper payments is only hinted at by the GAO's report: 

  • The audit covered seven states -- Virginia, Maryland, Ohio, New York, Illinois, Michigan and New Jersey -- and found evidence of fraud in each.
  • The investigation found 9 percent of applications contained invalid information; if that rate is representative, the total dollar amount for all 50 states would be monumental, says the Orange County Register.
  • The GAO also found that about 260,000 applications receiving benefits contained invalid identity information, such as blank Social Security numbers, names or dates of birth.
  • Many inaccuracies may be typos or incomplete sections, making it impossible to determine whether these cases involve fraud, the report said. 

Nonetheless, these applications pose a higher risk of fraud because there is no complete electronic record of beneficiaries' identities, said the report.  In other words, if the applicants can't be checked, who knows whether they are valid? 

  • About $3.9 million in subsidies were paid on applications submitted after the applicants had died.
  • Another $370,000 was paid for people incarcerated, and, therefore ineligible, in the four states that provided reliable prison data.
  • Another $670,000 was paid to 1,100 federal employees whose income exceeded the amount to qualify for subsidies at the time of their application.  

One $840 payment was made to a Chicago-area U.S. Postal Service employee making $80,000 per year, who, like the others, exceeded the maximum income threshold.  According to the GAO, the unnamed woman claimed on her application that she had no income.  But when pressed by GAO investigators, she admitted she wasn't entitled to the benefits, but wanted the handout anyway because: "Times are tough, and I needed the money."  She also said that she saw "long lines" and wanted some "free money," CNSNews.com reported. 

Source: Editorial, "Handouts + lax scrutiny = big fraud," Orange County Register, July 7, 2010; and Kelli Kennedy, "Feds wasted millions in utilities program for poor," Associated Press/Yahoo! News, July 1, 2010. 

For OC Register text:

http://www.ocregister.com/opinion/money-256740-government-paid.html  

For GAO report:

http://www.gao.gov/new.items/d10621.pdf 

 

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