AG Keith Ellison charges 3 more in PCA fraud
State Attorney General Keith Ellison charged three more individuals with a range of crimes related to an $11 million alleged scheme to defraud the state’s Medicaid program through a personal care…
During the pandemic, the federal government provided trillions of spending through numerous programs in an effort to help Americans weather the pandemic. Among the numerous programs created was a program to provide assistance to low-income renters to pay rent. In 2020, Minnesota got $598 million from the federal government to administer a state rental assistance program — money that went to Minnesota Housing and was disbursed to renters through a program called RentHelpMN.
According to a recently released report by the Office of the Legislative Auditor (OLA), in April 2022, the Legislative Audit Commission directed OLA to evaluate RentHelpMN on how effectively and accurately it has managed to provide rental assistance to Minnesotans.
Unsurprisingly, like a lot of programs that were created during the pandemic, OLA concludes that the RentHelpMN program was brimming with issues. Among other things, OLA identified that RentHelpMN was slow to provide assistance, and also failed to make accurate payments in some instances. Additionally, at other times, the program provided payments even when “documents used to verify the property owner and/or payee were missing or did not match.”
Specifically, OLA reported that RentHelpMN did not pay the correct amount of rental assistance in 5 of every 31 applications — or 16 percent. And as of September 2022, there was an estimated $3.5 million of identified overpayments — less than one percent of total spending. For the most part, RentHelpMN processors correctly determined eligibility, however, OLA reported that for numerous applications that it reviewed,
certain documents the program used to verify the property owner and/or payee were missing or did not match
And while OLA did not specify what amount of payments likely went to fraud, it reported that
Minnesota Housing had reported eight cases of suspected fraud with payments of $100,000 or more to Treasury’s OIG as of November 2022.
Certainly, issues with fraud and overpayments reported by OLA in RentHelpMN pale in comparison to other COVID-19 programs like the expanded unemployment Insurance program, which is estimated to have paid over $60 billion (and counting) to fraudsters, or Minnesota’s feeding our future, which involved about $250 million in fraudulent funds.
Nevertheless, this goes to illustrate once again not only how wasteful and prone-to-abuse assistance programs were during the pandemic, but also the general inherent wasteful nature of government spending.
As I explained in a previous post, since the government does not spend its own money — and instead spends taxpayers’ money — it has little incentive to see that the money is spent responsibly. Ergo, government spending is almost always associated with fraud and waste.
Surely, it’s highly likely that the risk for waste and fraud was made worse by the fact that these programs had to get money out to individuals much more quickly, so they had little time to establish effective mechanisms to counter fraud and waste. However, fraud and waste are issues we keep finding even in well-established government programs like Medicaid — both at the state and federal levels.
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