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Watchdog Agency Again Finds Fraud in Heating-Assistance Program

Nearly 7 percent of aid recipients in the Low Income Home Energy Assistance Program may have underreported their income

electric meter

A popular program that helps low-income households pay their energy bills is once again under fire for failing to ensure recipients are qualified for benefits.

The Office of the State Auditor found in a new report that the Department of Community Affairs gave out benefits to individuals without verifying whether their incomes made them eligible for payments under the Low Income Home Energy Assistance Program.

The federally funded program typically provides about $120 million a year to help eligible households pay heating bills. But it has come under repeated scrutiny over the last decade for being susceptible to fraud, including improperly paying out benefits to individuals who do not qualify for assistance.

Up to $1,400 a year to pay energy bills

Through LIHEAP, eligible low-income households can receive up to $1,400 annually to pay energy bills. In 2017, the program made payments to 105,527 recipients.

The latest audit — based on an analysis of the state’s wage-reporting system and DCA’s energy assistance database — revealed that 6,868 of the more than 100,000 recipients may have underreported their income. Those households received $3 million in benefits, according to the audit.

In one instance, the audit found a recipient had provided an earnings statement from a company that did not exist. The household receiving the LIHEAP benefit was found to have earnings of $95,675, according to New Jersey Department of Labor and Work Development (NJDOLWD) records. For the 2017 heating season, a household of four could make no more than $48,600 to qualify for the program.

In another case, a single-person household reported an estimated annual income of $8,737 in documentation submitted to authorities. However, the applicant only submitted earnings from a part-time job when, according to state wage records, they had earnings from two jobs worth $58,664, well above the $23,760 threshold for a household of one to qualify.

More robust vetting recommended

In the report’s recommendations, the auditor urged the department to utilize records kept by DOLWD for income-verification purposes of all applicants. In addition, it should also request New Jersey Gross Income Tax Returns to aid in verification of a LIHEAP applicant’s total income.

In response, the DCA argued the state’s wage records do not serve as a useful verification of income because of timing considerations, and that could lead to eligible applicants being denied benefits. Asking for tax returns would impose a significant burden on applicants, the agency said, resulting in fewer eligible households being served.

The latest audit led legislators to call for action on bills that aim to address problems found in previous audits of the program. The bills, approved by an Assembly committee last May, would require DCA to verify applicants’ income and ensure that applicants are not deceased.

A previous audit by the Office of State Comptroller found that benefits had been paid out even after an applicant had died, a problem that had occurred in at least 11 instances.

“Taxpayer dollars, which are intended for our most vulnerable, are being jeopardized by bureaucratic neglect,’’ said Assemblyman Jay Webber (R-Morris), a co-sponsor of the bills. “It has to stop.’’

Previously, state audits found problems with the DCA’s administration of weatherization programs designed to reduce heating bills by making homes more energy efficient.

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