Anti-fraud, waste efforts bolstered by budget bill provisions

Joe Leibham  9th Senatorial District

In order to retain our strong fiscal position as a state and ensure that taxpayer resources are spent as efficiently as possible, it is critical that we eliminate waste, fraud and abuse whenever possible. Below are several budget provisions that advance this goal. These are simply a few of the provisions I was pleased to support in this budget that will restore accountability in government budgeting.

Office of the Inspector General - One important step in eliminating fraud it to ensure that there is effective oversight for major government programs. The budget bill establishes several Offices of the Inspector General (OIG) in various state agencies. The goal of an OIG is to have an anti-fraud unit that operates outside of the general bureaucratic structure of a given agency that can easily pursue fraud and abuse. Furthermore, the OIG provides an easy, one-stop-shop for members of the public to report fraud.

One example of this is the Department of Health Services (DHS). In 2011, we began the process of creating an independent OIG to oversee medical assistance, FoodShare, and numerous other programs in DHS. Collectively, these public assistance programs distribute billions of dollars in taxpayer resources each year. Having an OIG oversee these programs provides a centralized location for auditing the use of department funds, investigative waste, fraud and abuse, and ensuring the integrity of these programs. The OIG reports directly to the DHS Secretary and is responsible for catching fraud among contractors, providers and public assistance beneficiaries. To visit the DHS OIG website to lean more or report fraud, please visit the following link:

The budget bill formalized the OIG within DHS and also began the process of extending this concept to other state agencies. For example, the budget requires the Department of Children and Families (DCF) to create an OIG that will conduct fraud prevention, ensure program integrity, audit Department activities and report directly to the Secretary. DCF will be required to consult with DHS to learn what works well there and hopefully imitate the success occurring in DHS to help reduce fraud in programs like Wisconsin Works (W-2), Wisconsin Shares, Foster Care, and numerous other programs. Similarly, the budget takes initial steps towards creating an OIG for the Department of Corrections (DOC). Here, DOC will have the opportunity to come before the Joint Finance Committee (JFC) in the future to seek approval for a plan to create an OIG or “Office of Special Operations” as they call it.

I was pleased to see these important anti-fraud efforts included in the recently enacted budget bill and look forward to continuing to work with DHS, DCF, DOC, and all state agencies on these OIG efforts in the near future.

Enhanced Tax Collection Efforts - Additionally, the budget includes several provisions that will give the Department of Revenue (DOR) additional resources to combat tax fraud. Understandably, filing your taxes can sometimes be complicated and individuals and businesses may make honest mistakes from time to time. In these instances, it is appropriate for DOR to work with taxpayers who make good faith efforts to do the right thing and pay their taxes. Alternatively, however, some individuals and businesses actively try to defraud the state through erroneous tax filings. When this occurs, not only does it deprive the state of income, but it is also unfair to honest taxpayers who do their part to pay what they owe.

For these individuals who purposely try to cheat the state, I believe DOR should have appropriate resources to ensure the state recovers what it is owed. Therefore, I was pleased to support several initiatives that will help DOR in this area.

First, the budget provides $7.4 million and staff positions over the biennium to prevent and reduce direct instances of tax fraud and negligence. This provision would also authorize DOR to work with various other state agencies to help identify and track fraudulent tax filers. DOR estimates that this additional investment in anti-fraud efforts would allow Wisconsin to collect $28 million in additional tax revenue over the biennium.

Second, a similar initiative spends $3.55 million over the biennium to create positions to allow the state to analyze and enforce federal tax audit reports. This will ensure that when DOR receives important tax information from the IRS, it has the necessary resources to analyze and use this information. This will allow the state to generate $35.8 million in additional tax revenue.

Finally, the budget appropriates an additional $1.7 million and staff positions for DOR to increase its efforts at delinquent tax collection activities. This additional support would generate nearly $20 million in additional tax revenue.

Child Care Fraud Prevention - The budget also fully funds full-time staff positions in the Department of Children and Families (DCF) to continue to combat fraud in the Wisconsin Shares childcare program. Under the Shares program, the state provides direct payments to child care providers who provide care to children in lower income families. As you may know, several years ago, a variety of news stories revealed significant instances of provider fraud in the Shares program. As a result, the state established temporary staff positions to conduct anti-fraud efforts. These positions will now be permanent.

As a member of the Joint Finance Committee (JFC), I have been receiving periodic reports over the past few years from DCF on these anti-fraud efforts and it is clear that the volume of fraud that exists in the Wisconsin Shares program has exceeded original expectations. Therefore, I was pleased to support this budget provision that will ensure that DCF continues to retain full-time, permanent anti-fraud staff to create and maintain program integrity for Wisconsin Shares.

These are a few of the budget initiatives that will help combat waste, fraud and abuse in the state government. I was pleased to work with my colleagues in the legislature on advancing these provisions and hope we can build upon these efforts in the future.

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