This document discusses challenges and solutions for ensuring program integrity in LIHEAP (Low Income Home Energy Assistance Program). It notes that risk assessments found issues in some sub-grantees and a GAO report prompted changes to LIHEAP policies. To improve verification, the state will check Social Security numbers, conduct wage matches, authenticate vendors, and encourage post-audits. Operational changes include using a system to electronically verify applicant information without human interaction and expanding an electronic system to allow vendor authentication and benefits verification.
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LIHEAP Program Integrity Challenges and Solutions
1. LIHEAP PROGRAM INTEGRITY:
CHALLENGES & SOLUTIONS
A K M R A H M A N
M A S S A C H U S E T T S D E P A R T M E N T O F H O U S I N G &
C O M M U N I T Y D E V E L O P M E N T
National Energy and Utility Affordability
Conference (NEUAC) - 2012
6/11/2012Program Integrity: Challenges & Solutions, Akm Rahman, MA DHCD
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2. Program Background
Risk-Assessment Assurance of ARRA sub-grantees – 19
out of 24 administer LIHEAP.
GAO Report and subsequent HHS guidelines –
significant changes in LIHEAP policies and procedures.
The state Office of Inspector General (OIG) review of all
ARRA-WAP sub-grantees – 15 out of 20 administer
LIHEAP.
Program Integrity Work Group – MA has been a member
since 2011.
Service Delivery – changes in LIHEAP application and
certification process.
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3. Program Background
“…to assist low-income households, particularly those with
the lowest incomes, that pay a high proportion of household
income for home energy, primarily in meeting their
immediate home energy needs.”
- High deliverable fuel prices
- Growing caseload
- Funding cuts
- New Program Integrity procedures
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4. The Landscape –
Program Characteristics
Serve over 420,000 individuals or 210,000 households .
About 33% heat with deliverable fuel, 62% utilities, 5%
heat-included in rent.
The average income was $21,000 per household in 2010-
2011.
The LIHEAP Application is designed to collect over 35
different data elements, including SSN.
Non-emergency certification can take up to 4-6 weeks.
Close to 50% of all LIHEAP applications are received by
local agencies before November 1st.
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5. The Landscape –
Flow of LIHEAP and other Funds
State Home
Energy
Programs
(Federal -
$132.67 M
& State -
$21.18 M)
DOE
ARRA-WAP
and regular
WAP
$8.5 million for
LIHEAP
Weatherization
LIHEAP
Sub-
Grantees
(19 CAAs, 1
other non-
profit, 1 city
department)
LIHEAP
Vendors
Regulated
Investor-
Owned Utilities
– 56%
Unregulated
Deliverable
Fuel Vendors -
37%
Regulated
Municipally-
Owned Utilities
- 2%
Heat-
included-
in-Rent
Direct Pay
Clients-
5%.
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6. Policy & Operational Questions
Is it necessary for a LIHEAP applicant to provide
his/her SSN?
Should we stop providing benefits to a very small
number of applicants with no SSN?
We have a vendor contracting process in place, but is
it authentic enough?
What are the potential “entry points” to LIHEAP
fraud?
Which changes are reasonable?
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7. Policy & Operational Goals –
Performance Verification System
Verify SSN and other applicant information.
Conduct more wage matches.
Authenticate all LIHEAP vendors.
Implement “Related-party transactions” and State
Executive Order 504 policies.
Encourage local agencies to conduct post-audits.
Develop a formal fraud reporting process.
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8. Operational Changes –
Performance Verification System
All household members’ SSN and certain available
information will be verified through the SVES IV
system without much human interactions.
Additional client information will be verified by local
agencies through a TANF data look-up system.
Dept. of Revenue wage matches are now conducted
at least twice a year. More matches are encouraged.
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9. Operational Changes –
Performance Verification System
Expanding the State’s E. Gov. system (to allow
vendor authentication, address correction, and
benefit verification).
Developing new training modules around fraud
prevention and Program Integrity.
Using data security standards and utilizing new
technology.
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10. Operational Solutions:
Documentation > Verification
Documentation
Identity
Household Composition
Service Address
Household Income
Home Energy
Consumption
Vendor Participation
Tenant-Landlord
No Income Situations
….
SSN, ID, & Birth
Certificates
Proof of Address
Paystubs, Tax Forms,
Award Letter, Checks,
Bank Statements
Electronic Eligibility &
Billing Files
Tenant-Landlord Form
Vendor Contracts
Income Vs. Expense
Calculation
Performance
Verification
More software checks &
balances
SSNs, fixed income, and other
verification
Household composition,
income, TANF benefits, & child
support payment verification
Address correction
Un-duplicate benefit verification
Electronic eligibility & billing
Vendor Authentication
Electronic Wage Match
Post-audits
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11. Operational Solutions:
Secure Data Exchange, Validation, and Fraud Detection
LIHEAP AGENCIES
State E.Gov.
System
(encrypted
data exchange)
SSA
State E.Gov
System
(encrypted
data for
validation and
fraud
detection)
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12. LIHEAP Monitoring Findings:
Fiscal Years 2010 - 2012
0
5
10
15
20
25
30
35
2010 2011 2012
E
r
r
o
r
R
a
t
e
s
(
%
)
Sample 1
Sample 2
Sample 3
Sample 4
Sample 5
Sample 6
Sample 7
Sample 8
N = 22
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13. LIHEAP Program Integrity: Challenges & Solutions
Ongoing Lessons Learned
Data exchange agreements can take more than a year
to implement.
Security standards are extremely strict.
The auditing & oversight community can be helpful.
Local agencies can help write new business rules.
Verification should streamline operation.
Need to set-aside administrative funds.
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14. Contact Information
Akm Rahman
Senior Program Coordinator
Massachusetts Department of Housing
& Community Development
100 Cambridge Street, Suite 300
Boston, MA 02114
(617) 573-1413
www. mass.gov/dhcd
akm.rahman@state.ma.us
6/11/2012Program Integrity: Challenges & Solutions. Akm Rahman, Massachusetts DHCD
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