Auditor General Jack Wagner Urges DPW to Implement Recommendations to Eliminate Potential...

Auditor General Jack Wagner Urges DPW to Implement Recommendations to
Eliminate Potential LIHEAP Fraud

Renews call after 18 charged with stealing $500,000 in LIHEAP funds

HARRISBURG, Pa., June 10 /PRNewswire-USNewswire/ -- Auditor General Jack
Wagner today urged the Department of Public Welfare to immediately implement
all of the recommendations he made two years ago to eliminate the potential
for fraud and abuse in the Low Income Home Energy Assistance Program.

Wagner renewed his call one day after the Philadelphia district attorney,
relying in part on information uncovered by the Department of the Auditor
General, charged 18 people -- including 16 state and city employees -- with
stealing more than $500,000 of LIHEAP funds and related crimes.

The Department of Public Welfare, which administers the LIHEAP program, has
refused to provide Wagner's auditors with documentation to prove that it had
implemented the Department of the Auditor General's recommendations.

"LIHEAP is a vital safety net that helps keep thousands of Pennsylvania
families warm during the winter," Wagner said. "I commend District Attorney
Lynne Abraham and her office for acting on information developed by our agency
and others.

"With the nation mired in its greatest recession in a generation, LIHEAP is
more valuable than ever. DPW must prove that it has taken necessary action to
fix LIHEAP, to assure needy families that funds will be available this winter,
and to assure taxpayers that their hard-earned dollars are not being wasted or
stolen."

LIHEAP provides financial grants and cash assistance to low-income families to
help pay their winter heating bills. The federal government and Pennsylvania
provided $280 million in LIHEAP funding for the 2008-09 winter heating season.

Wagner's special performance audit, released in June 2007, made 25
recommendations after auditors found systemic weaknesses in LIHEAP programs in
six counties -- Allegheny, Lancaster, Perry, Lehigh, Philadelphia and York.

Auditors determined DPW's inadequate policies and procedures, insufficient
supervision and inadequate oversight resulted in potential applicant and
employee fraud and abuse. More than 1,000 cases of potential fraud and abuse
were identified in the six counties, including more than 300 in Philadelphia
County, 23 of which were cited specifically in the audit.

Auditors found applications containing invalid Social Security numbers or
Social Security numbers of deceased people, as well as applicants filing
multiple applications using different Social Security numbers or different
addresses and applicants receiving excessive benefits.

Wagner referred over 900 LIHEAP applications to the Office of Inspector
General for criminal investigation; OIG referred some of these cases to the
Philadelphia district attorney.

At a press conference announcing the results of her investigation, Abraham
said that the way LIHEAP was administered "practically assured that both fraud
and theft would flourish. There was a total failure of supervision and
oversight."

"District Attorney Abraham's comments validate the major findings of our
LIHEAP audit," Wagner said.

The Department of the Auditor General contacted DPW in July 2008 to conduct a
follow-up of the LIHEAP audit. Wagner said his auditors requested a written,
detailed summary explaining the status of DPW's efforts in implementing each
of the recommendations. DPW sent a letter responding to the request, but has
failed to provide specific information on how it has addressed each of the 25
recommendations.

"Every dollar wasted is a dollar that will not be available to families who
need assistance," Wagner said. "There are serious deficiencies in the
administration of LIHEAP and the Department of Public Welfare must provide
evidence that they are addressing the problems as soon as possible."

The LIHEAP special performance audit is available to the public at
www.auditorgen.state.pa.us.

Auditor General Jack Wagner is responsible for ensuring that all state money
is spent legally and properly. He is the Commonwealth's elected independent
fiscal watchdog, conducting financial audits, performance audits and special
investigations. The Department of the Auditor General conducts more than
5,000 audits per year. To learn more about the Department of the Auditor
General, taxpayers are encouraged to visit the department's Web site at
www.auditorgen.state.pa.us.

SOURCE Pennsylvania Department of the Auditor General

Steve Halvonik of Pennsylvania Department of the Auditor General,
+1-717-787-1381