First Steps to Reduce Fraud at Program that Helps Poor Pay Energy Bills

Tom Johnson | January 23, 2017 | Energy & Environment
Safeguards would prevent Low-Income Home Energy Assistance Program from fraudulently issuing benefits to dead people

poor people cold
The Legislature is taking steps to try and reduce fraud in a popular federally funded program that helps the needy to pay their home-energy bills.

In the last session, a package of three bills was introduced to put in place additional safeguards to protect against vulnerabilities in the Low-Income Home Energy Assistance Program. They were uncovered by a report from the Office of the State Comptroller last fall.

The report found that private agencies used by the state to hand out benefits were not monitored closely enough to prevent fraud, including cases where inaccurate social security numbers were used in applications for assistance, including a number for a dead person on multiple occasions.

In the probe, the state comptroller discovered benefits were paid to three ineligible public employees, including one who earned $90,000 annually, or about $50,000 above the maximum threshold limit. At least six cases were referred to the state Division of Criminal Justice for potential prosecution.

The $126 million program is overseen by the state Department of Community Affairs, which described the report as a review of only one “low-performing’’ agency out of the 17 it manages.

The review covers only a fraction of the more than 265,000 applications it receives, and is statistically invalid, according to the department.

Assemblyman Wayne DeAngelo (D-Mercer) introduced the legislative package that would address many of the problems uncovered by the comptroller’s audit, including one (A-4514) requiring the agency to ensure an applicant is not deceased prior to awarding benefits.

Another bill (A-4512) would require the department to verify the income of applicants to the program before awarding benefits and cross check information with other income data available from other state agencies. Finally, a bill would require the state to revise an out-of-date training book about program requirements for those doling out the benefits.

In releasing the report, state Comptroller Philip James Degnan cited the importance of the LIHEAP program in helping low-income people pay their utility bills. “The weaknesses we discovered in LIHEAP need to be addressed so we can ensure this vital funding is properly provided to those it is intended to help,’’ he said last October.

The report is the latest investigation of the DCA and its oversight of federally funded programs designed to help the poor pay their energy bills. Previously, three separate audits faulted fiscal management of the weatherization program.

DeAngelo is chairman of the Assembly Telecommunications and Utilities Committee, the legislative panel where the bills will likely be first discussed.