Energy Assistance Fraud Reform Signed Into Law
While the demand rises for the Low Income Home Energy Assistance Program (LIHEAP) and proposed budgets get cut threaten funding, Pennsylvania officials want to make sure the program’s money gets to the right people.
The measure sponsered by Rep. Bryan Cutler (R-Lancaster) and Ron Waters (D-Delaware/Philadelphia) aims to reduce fraud, duplication and abuse in the LIHEAP and Weatherization Assistance Program.
LIHEAP, which is federally funded and state-administered, seeks to blunt the impact of high energy costs by providing cash grants to help low-income residents pay heating bills during the winter months and receive emergency stipends to fix broken furnaces and deal with other emergencies.
House Bill 1991 requires the Department of Public Welfare and the Department of Community and Economic Development to verify the income eligibility of recipients of LIHEAP and weatherization funds.
While the bill doesn’t add any penalties for energy assistance-specific fraud, Cutler said it does make the potential for fraud much less likely.
“What it attempted to do was put the same verification pieces into the LIHEAP program that are currently in other sections of the welfare programs,” Cutler said. “Specifically, we’ll begin cross-referencing names and addresses [and] dependents of the individuals who are applying for the program.”
Cutler’s legislation stems from a 2007 audit by state Auditor General Jack Wagner, which found instances of fraud and abuse. One notable example of occurred in Philadelphia where 7 state employees defrauded the program of almost $500,000 in 2007.
This past June when Cutler’s bill was introduced, the Legislative Budget and Finance Committee issued a report highlighting administrative changes to LIHEAP, including introduction of a computer system that verifies applicants' Social Security numbers and checks federal and state tax information.
The main benefit Cutler sees to LIHEAP is the ability to help more people in need, but the need continues to rise.
“One of the problems with the program is that it always runs out of resources before it runs out of applicants,” Cutler said. “And Representative Waters and I both felt that with a program that has that chronic fault, it’s very important to remove the people who are on there fraudulently first so that we can better serve the individuals who would otherwise qualify for the program.”
According to the 2012 report, Pennsylvania’s program is on a path to have processed about 600,000 heating grants totaling $92 million and over 100,000 crisis grants amounting to $30 million in crisis benefits for 2012. It also anticipates providing an additional $50 million to $66 million in supplemental heating benefits.