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In Wisconsin, waste, fraud and abuse roll on

By   /   January 15, 2013  /   News  /   No Comments

By M.D. Kittle | Wisconsin Reporter

MADISON – Neil Young reminds us that rust never sleeps.

Neither does fraud.

In its Biennial Report, the nonpartisan Legislative Audit Bureau notes scores of cases of waste, fraud and abuse in state government.

The bureau’s Fraud, Waste, and Mismanagement Hotline received 162 tips between Jan. 1, 2011 and Dec. 31, 2012 — 112 of those related to waste or malfeasance specific to state agencies or programs.

The toll-free line (877-FRAUD-17), which launched in 2008, has taken hundreds of calls, and the bureau says it has addressed more than 470 hotline reports of waste, fraud and mismanagement. Agency officials say those calls have led to wider investigations, such as the Audit Bureau’s investigation into FoodShare fraud.

FoodShare is the state’s food stamp program for low-income residents administered by the state Department of Health Services.

The Audit Bureau identified 152 FoodShare assistance groups — which include all or most members of a household’s family — that used FoodShare cards to make $500 worth of purchases outside the state and more than 50 miles from their reported residences. That cost the taxpayer $324,187, according to the report.

In total, about $32.9 million of the $1.1 billion in FoodShare expenditures, or 3 percent, was made out of state.

“We also identified 332 instances in which a FoodShare card was used to make a purchase on the same day that the card’s account number was entered manually to make a purchase in a noncontinguous state,” the Audit Bureau report states, denoting a wider net of fraud.

Latest reports show government fraud activity not slowing.

And at least 1,639 inmates, absconders and parole and probation violators used FoodShare cards over the two-year period, a practice prohibited by state law.

Another 59 inmates received unemployment benefits, to the tune of nearly $222,000, the Audit Bureau found.

A Wisconsin Reporter investigation last July found 406 inmates scammed unemployment benefits, costing employers more than $430,000. Another $23,705 in overpayments was made to 57 other inmates, apparently by mistake, the state Department of Workforce Development said.

State Rep. Samantha Kerkman, co-chair of the Joint Legislative Audit Committee, said the fraud-fighting work by state watchdogs is a good start, but there’s much work to be done.

“The FoodShare program is not a huge dollar amount in the whole scheme of a $1 billion program, but we have to continue to be mindful,” she said. “We have to continue to be the watchdog.”

A lot of government waste and fraud watchers might tell you that leaving it up to the state to be the watchdog is like leaving New Jersey Gov. Chris Christie in charge of the cheese fries, but the Audit Bureau and other such agencies were established to keep a close eye on the state’s fiscal business.

Audit Bureau officials have said it’s difficult to know whether the fraud cases investigated are just the tip of the iceberg.

The state Office of the Inspector General, within the state Department of Health Services, launched its Fraud Hotline (1-877-865-3432) in fall 2011. Inspector General Alan White said the hotline continues to take some 200 complaint calls per month.

OIG investigates fraud tips involving:

  • Billing Medicaid for services/equipment not provided
  • Filing a false application for a DHS-funded assistance program such as Medicaid, BadgerCare Plus, WIC or FoodShare
  • Trafficking in FoodShare benefits
  • Crime/misconduct/mismanagement by a DHS employee/official or contractor

According to the latest Inspector General data obtained by Wisconsin Reporter, the State and County Recipient Fraud Investigation and Prevention Program completed 2,793 investigations into FoodShare and Medicaid programs between January 2011 and November 2012. OIG has saved more than $5 million in benefits, and tossed out 111 recipients from FoodShare.

White said he’s surprised by the volume of fraud tips the office still receives. He said people are tired of government abuse, and the abuse of taxpayer-paid services.

“I think people are just paying more attention to it,” he said. “People are seeing it’s an investment of their taxpayer money. They’re not only out to protect the state, but themselves.”

Kerkman said she was getting her flu shot when a nurse recognized her and told her about FoodShares fraud tip she wanted to pass along.

“You have the ability to change state government,” Kerkman said.

Contact Kittle @[email protected]


M.D. Kittle is bureau chief of Wisconsin Watchdog and First Amendment Reporter for Watchdog.org. Kittle is a 25-year veteran of print, broadcast and online media. He is the recipient of several awards for journalism excellence from The Associated Press, Inland Press, the Wisconsin Broadcasters Association, and others. He is also a member of Investigative Reporters & Editors. Kittle's extensive series on Wisconsin's unconstitutional John Doe investigations was the basis of a 2014 documentary on Glenn Beck's TheBlaze. His work has been featured in Town Hall, Fox News, NewsMax, and other national publications, and his reporting has been cited by news outlets nationwide. Kittle is a fill-in talk show host on the Jay Weber Show and the Vicki McKenna Show in Milwaukee and Madison.