Heating Assistance program waste/fraud/abuse update

In a previous post, I linked to an article from the AP on the government losing over $100M to waste/fraud/abuse in the Heating Assistance Program. As this story points out, the AP was lowballing the amount of waste.

The GAO investigated Illinois, Maryland, Michigan, New Jersey, New York, Ohio, and Virginia, which represented about one-third of the program’s funding in 2009. The agency found improper payments in about 9 percent of households receiving benefits in those states, totaling $116 million.

Unless someone can demonstrate that other states’ LIHEAP programs are airtight (good luck with that), the true losses in the program are far higher than the figure Kennedy cited. We already know from her report that Pennsylvania, which was outside the scope of GAO’s investigation, has had serious program problems.

Since the states involved “represented about one-third of the program’s funding,” total losses to fraud and abuse are more than likely in the neighborhood of $350 million, or three times higher than the reported $116 million. Kennedy should have included a sentence along these lines: “If the experience of these six states is representative of what is occurring in the program nationwide, annual LIHEAP losses to fraud and abuse are about $350 million.”

A question separate from AP’s report: What would happen to a business where 9% of payments to employees or vendors were improper? Answer: They’d be out of business. But in government, the easy answer is not to clamp down on fraud and abuse (later paragraphs in the AP article demonstrate a decided reluctance to do that on the part of those who should be doing it). Instead, its “answers” are to either raise taxes or borrow more money while constantly advocating even more spending. Meanwhile, the fraud and abuse go on and on. “Responsible government” and “Government oversight,” once again, are shown to be oxymorons.

Of course, when we’re talking Trillions of dollars in federal spending, what’s the big deal about a few hundred million – right?



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