Posts Tagged ‘Fraud’

By James Wigderson
Special Guest Perspective for the MacIver Institute

Governor Scott Walker’s Waste, Fraud and Abuse Commission (WFAC) has issued their report and found a potential $445 million in savings for Wisconsin’s taxpayers annually. But as if to prove Weiss’ Law, Democrats in Madison are already complaining about the report.

Weiss’ Law was named after former New Berlin School Board member Matt Weiss who made the observation, “Nobody ever thanks you for not spending money.” Given the history of past efforts to root out waste and fraud in government including the Grace Commission and other commissions and reports, Weiss knew what he was talking about.

The Commission identified $82.6 million in local government savings and $373 million in state government savings annually. Hardly small change.

Some of the savings identified are already being implemented, such as changes in overtime for correctional officers. Those changes were made possible by the reforms in Act 10, which allowed the state to set the work rules outside of collective bargaining.

Other changes were spurred by the release of the interim report last year. For example, the Wisconsin Department of Health Services is examining how they will implement Patient Protection and Affordable Care Act program integrity provisions. They will also be contracting with private auditors to conduct audits of Medicaid suppliers on a contingency fee basis.

But what seems to have inspired the ire of the Democrats on the Commission, Democratic State Representative Mark Pocan and Democratic State Senator Chris Larson, was the emphasis by the commission to focus on the waste, fraud and abuse in programs for the needy.

In an interview with WTMJ-TV in Milwaukee, Larson said, “Where they go after people who are receiving food stamps and quest cards. They wouldn’t do the same thing for contracting or where money’s going to for the economic development corporation.”

But as the commission’s report makes clear, even as the amount of assistance spending has dramatically increased in Wisconsin, the amount spent on rooting out fraud has dramatically decreased. The report says, “At the same time benefit spending and recipient levels have risen, funding for recipient fraud prevention and detection has dropped.  In 2002, state spending on recipient fraud detection and program integrity efforts was $2.7 million. Between 2004 and 2009, funding to identify and 22 prevent recipient fraud decreased by 76 percent, from $2,340,000 to $561,892, while at the same time program eligibility expanded and new public assistance programs were created.”

As for why the Commission did look for savings in assistance programs, as Willie Sutton was famously misquoted, “That’s where the money is.” The Commission identified that increasing program integrity for assistance programs would result in $177,000,00 in savings.

Even Pocan and Larson recognized that’s where the money is in their alternative report. They suggested hiring more front line staff and administrative efficiency could result in $116.8 million to $177 million in savings each biennium.

One of the Commission’s recommendations for stopping fraud was the requirement of a photo id for aid recipients using Quest debit card for FoodShare. As the Commission says in the report, there have been a number of high profile cases of Quest card fraud, including the re-selling of Quest cards for cash. Requiring a photo id at the register (the same requirement if writing a check or purchasing decent cold medicine) would deter the reselling of Quest cards and their unauthorized use.

Pocan and Larson consider requiring a photo id to be an unnecessary burden on the state’s poor. Apparently the poor need not apply to assist Pocan’s and Larson’s fellow Democrats’ “Recall Processing Strike Force,” which also requires a photo id of participants.

Pocan and Larson also misstate in their report that the commission did not consider the question of using more in-house engineers at the Department of Transportation. “Unfortunately, these conversations were not part of the commission process.”

Actually, the question was dealt with quite extensively in section F on pages 50 – 57, including the Legislative Audit Bureau report that Pocan and Larson cite in their alternative report. The commission pointed out that the LAB report did not look at contractors vs. in-house engineers in the larger sense of continued pay and benefits even after a project was completed, only on the cost for a particular project to make the comparison. The Commission pointed out there was actually conflicting data and called for more study of the issue, even as the DOT is adding more in-house engineers to address the imbalance.

Perhaps that was because Pocan and Larson were in a hurry to try to score other partisan points. Seemingly forgetting the purpose of the commission, which is to ultimately reduce the burden on the taxpayers, as part of their alternative report on Waste, Fraud and Abuse, Pocan and Larson actually called for a tax increase on Wisconsin businesses. They complain that with the tax breaks given to businesses under Walker, “Wisconsin will loose (sic) $212 million in lost revenue.” Larson and Pocan call for raising taxes on Wisconsin businesses $46.4 million in the current biennium and $80 million in the biennium to follow.

But Pocan and Larson saw their alternative report as an opportunity to actually add back more waste in government spending. They call for the return of regional transit authorities that would raise taxes on local communities for passenger rail projects.

And if that was not enough, they also call on the state government to beg the federal government for the money for “high-speed rail.” While they see the $800 million in lost federal revenue, they are ignoring the long-term costs of the project and the likely additional burdens to the taxpayers.

California was a supposed beneficiary of Wisconsin’s refusal of federal stimulus “high-speed” rail money, but they are experiencing buyer’s remorse. California voters in 2008 approved selling $9.95 billion in bonds for the train’s costs. Recent polling indicates that the same referendum would not pass today. Costs are ballooning and the bonds aren’t selling.

Now the CEO of the California High-Speed Rail Authority, Roelof van Ark, and the Chairman of the Board, Tom Umberg, are stepping down as calls mount to abandon the wasteful project.

Judging from the alternative report, Pocan, who made headlines last year claiming the state was not in a fiscal crisis, seems bound and determined to send Wisconsin back into one. The alternative report is a reminder of the thinking that led to the state’s fiscal crisis before the reforms enacted by Governor Scott Walker and the legislature in 2011.