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PA Auditor Urges Action After Philadelphia LIHEAP Fraud

June 10mdash;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 reportedly 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, Wagner said.

The LIHEAP special performance audit is available to the public at

SOURCE: PA Dept.of the Auditor General, PR Newswire, USNewswire