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LEAP Fraud Prevention and DetectionColorado Department of Human Services

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Update Topics

• Introduction

• Data Mining

• Fraud Detection

• Annual Data Mining Techniques

• Continuous Monitoring

• LEAP Fraud Example

• What Your State Can Do to Prevent Fraud

• Fraud Hotline

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CDHS Audit Division

• Introduction to CDHS Audit Division

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Data Mining

Filtering data to locate information or patterns of information

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Fraud Detection

• Use data mining techniques to detect fraud and abuse

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Annual Data Mining Techniques

• Our office analyzes the data from each year’s LEAP season

• We identify:

• Training issues

• Areas that may need rule or policy changes

• Possible misuse of LEAP funds

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Annual Data Mining Techniques

• Search for fields in the data that are blank

• Identify duplicate entries in the SSN, household number, and address fields

• Review data for obvious data entry errors

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Annual Data Mining Techniques

• Perform data matches to the Social Security Administration’s death records

• Group like counties together to perform data mining analysis tests on benefit issuance data

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Annual Data Mining Techniquestech_number Count Percent of Count

1 32 0.91%2 219 6.22%3 284 8.06%4 5 0.14%5 291 8.26%6 176 5%7 306 8.69%8 167 4.74%9 299 8.49%

10 466 13.23%11 197 5.59%12 303 8.60%13 312 8.86%14 196 5.56%15 265 7.52%16 2 0.06%17 1 0.03%18 2 0.06%

Totals 3,523 100%

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Annual Data Mining Techniques

Number Total AverageRange - 600 -

Positive 466 114,313 245Negative 0 0 0

Zeros 0 - -Totals 466 114,313 245

Abs Value - 114,313 -

Highest Lowest700 100700 100700 100700 100700 100

NUMERIC10

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Annual Data Mining Techniques

NUMERIC10 CountPercent of Count

Percent of Field

NUMERIC10

100 - 159 210 45.06% 19.67% 22,488160 - 219 50 10.73% 8.25% 9,431220 - 279 30 6.44% 6.36% 7,265280 - 339 43 9.23% 11.55% 13,198340 - 399 38 8.15% 12.11% 13,840400 - 459 37 7.94% 13.89% 15,875460 - 519 26 5.58% 10.99% 12,564520 - 579 13 2.79% 6.24% 7,137580 - 639 6 1.29% 3.23% 3,698640 - 700 13 2.79% 7.71% 8,817Totals 466 100% 100% 114,313

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Annual Data Mining Techniques

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Continuous Monitoring

• CEPS (LEAP System Reports)

• EBT Card Withdrawal Reports

• State Financial System Reports

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LEAP Fraud Example

• LEAP lead worker issued LEAP benefits to relatives

• Results - 3 years probation, 100 hours community service, and restitution and court costs

• Conflict of interest in this county

Annual LEAP Fraud Prevention Training

• Fraud Investigations

• Results

• Monitoring

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Other Fraud Prevention Ideas

• Review system controls

• Ensure proper separation of duties are in place

• Rotate caseloads during the LEAP season

• Create interfaces between systems or perform data matches between systems

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What Your State Can Do to Prevent Fraud

• Have in-depth discussions with your managers on how fraud could occur in your State

• Review and walk through internal controls

• Ask whether they are effective

• Address risk, make changes

• Ask for your county’s EBT card control procedures

• Ask whether they are effective

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What Your State Can Do to Prevent Fraud

• Remind staff to be a prudent person when making eligibility decisions

• Use common sense

• Use program knowledge

• Make use of your rules and regulations

• Make use of experience and expertise

• Document the rationale you used to make the eligibility decision

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Contact Information

• CDHS Audit Division

• Ryan Rivera, Audit Supervisor

• (303) 866-7329

• ryan.rivera@state.co.us • CDHS Low-Income Energy Assistance Program

• Todd Jorgensen, Director

• (303) 861-0325

• todd.jorgensen@state.co.us