Massive internal fraud in San Bernardino County social services arm

News emerged this weekend related to a massive internal fraud, a portion of which was recently uncovered within the agency responsible for the delivery of San Bernardino County’s social services programs.

iePolitics has learned that hundreds of thousands of dollars in funds meant to provide aid for the disadvantaged has been illegally diverted by county personnel in an ongoing massive theft. It is believed that several schemes and abuses has been uncovered.

The San Bernardino County Human Services System, commonly referred to as HSS, administers the county’s various social services programs such as general assistance, Medi-Cal, and welfare. Annually, Hundreds of millions of dollars pass through HSS and into the hands of the needy who legitimately qualify for assistance.

News from well-placed sources inside HSS tell a story of employees routinely entering false data into computer systems to approve Medi-Cal and direct cash payments to family, friends, and vendors.

Apparently, HSS management has been aware of the problem for some time. The closing out of fraudulent claims of less than $5,000 with no criminal action being taken has been a normal practice. The prevailing attitude towards the misconduct has been described as carefree, since the nearly all of the funds being taken are derived from state and federal sources, and not the county general fund.

Ineffective internal management controls and oversight are being identified as factors in this scheme involving a disbursement process described as having no checks and balances. Need some cash? Just make up a false identity and you’re set. No qualification or paperwork required.

Have a friend or relative in need of medical treatment? No problem. We’ll just issue you out a Medi-Cal identification card.

A common example of abuse occurs when an employee leaves their desk terminal signed on, and walks away. Another employee seeing an unattended terminal will then walk over and enter in a fraudulent case and, a thus benefit is created.

What is not surprising about the situation? County supervisors have no idea this is occurring.

When I was involved in the representation of county peace officers I fought vigorously to preserve investigative positions assigned to the HSS Program Integrity Unit. Since HSS management believes there should be no investigations of theft, the number of investigators has dropped by two-thirds. The funding of the investigator positions is derived from federal dollars, which makes the desire to cut them unusual.

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