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    "ocrText": "Ronald Reagan Presidential Library\nDigital Library Collections\nThis is a PDF of a folder from our textual collections.\nCollection: Reagan, Ronald: Gubernatorial Papers,\n1966-74: Press Unit\nFolder Title: Issues - Welfare (1 of 3)\nBox: P32\nTo see more digitized collections visit:\nhttps://reaganlibrary.gov/archives/digital-library\nTo see all Ronald Reagan Presidential Library inventories visit:\nhttps://reaganlibrary.gov/document-collection\nContact a reference archivist at: [email protected]\nCitation Guidelines: https://reaganlibrary.gov/citing\nNational Archives Catalogue: https://catalog.archives.gov/\nWilfare\nGOVERNOR'S PRESS CONFERENCE\nTUESDAY, OCTOBER 28, 1969\nRemarks By\nGilbert L. Sheffield, Director\nCalifornia State Department of Human Resources Development\nThank you Spence and thank you Governor for declaring HRD in operation.\nFirst, I'd like to briefly give you an idea of what the Department of\nHuman Resources Development is to be;\nSecond, I very much want you to meet the strong staff of Deputy Directors\nwho will be working with me in shaping HRD's future.\nThen, I'd like to turn the meeting over to you for your questions.\nGovernor Reagan and Spencer Williams have filled you in on the key events\nwhich preceded my appointment as HRD's Director.\nSince then, with their invaluable guidance and with the daily help of the\nstaffs of HRD's components, I have been working toward this moment -- when we sign\nthe formal document to activate the new department.\nThe Department of Human Resources Development is formed by bringing together\nfour state government organizations:\nThe Department of Employment\nThe Service Center Program\nThe State Office of Economic Opportunity\nAnd, the California Commission on Aging.\nThe purpose of bringing these bodies together is to create a single state\nagency to deliver job training and placement services to the hardcore unemployed,\nas well as to continue administration of other employment and manpower-related\nprograms vital to the citizens of California.\nHRD has the same source of funds, both federal and state, which our\ncomponents have had. The intention is for us to be innovative and creative in\nthe use of these resources - to find new approaches to solving one of society's\nmost important problems.\nA large part of the answer to how successful we will be depends on our\nability to marshal and coordinate the many resources and programs which now exist.\nMuch of our effort will be devoted to involving the private business sector, local\ngovernment, and people of disadvantaged communities in the necessary solutions for\neach community.\nOne of the most interesting parts of A.B. 1463 is its creation of a new civil\nservant position, the job agent, with a new work-style. He won't be bound to a desk.\nHe will have personal responsibility for a caseload of hardcore unemployed.\nHe will work closely with his clients to develop an employability plan for each, and\nwill be responsible for the accomplishment of this plan. The end objective is to\nremediate a client's difficulties and problems so that he can be a productive,\ncontributing member of society by virtue of having meaningful sustained employment.\n2\nThis job agent must be equally at home and as effective in a disadvantaged\ncommunity or in the office of a corporate vice-president.\nBy the end of the year, we expect to have 140 job agents at work in some two\ndozen disadvantaged communities throughout the state.\nWe also will be searching out ways to make California's manpower program a\ncoordinated, orderly effort. There is money to be saved here and certainly more\npeople to be served.\nWe are aware, of course, that it costs a lot more to work with a person who\nhas no saleable skills -- to prepare him for a decent job and hope for a decent\nlife -- than it does to refer a qualified person to an existing job vacancy,\nSo, we don't expect to be able to measure our success by traditional methods --\nhow many people have we placed in the period of a month, or a year?\nWe'll be using new criteria, new yardsticks, which should tell us\nhow\nare we doing with the really hard cases? What are we doing for the man who has been\ngiven up as impossible, and who perhaps has given up hope himself?\nWe begin this new organization with an innovative attitude, with a desire to\nbe more responsive to the needs in California, and most importantly with a sincere\ndedication to purpose.\nAnd that is, by working with the community, with business, with industry, and\nwith the tools provided us by the taxpayers of the state and nation; our aim is to\nprovide every Californian with an opportunity to share in the good life of our state.\nHRD EXECUTIVE STAFF\nBRIEF BIOGRAPHIES\nGilbert L. Sheffield, 40, was appointed Director, Department of Human\nResources Development, in February, 1969. He was formerly assistant vice\npresident, personnel, Pacific Telephone Company, responsible for management\ntraining, minority employment, minority relations and urban affairs activities.\nHe played a key role in the formation by Bay Area employers of the Management\nCouncil for Bay Area Employment Opportunity to promote minority employment and\ntraining.\nSheffield was born in Oakland and is a 1951 graduate of the University\nof California at Berkeley, majoring in personnel and industrial relations.\nBetween 1951 and 1953 he served in the U.S. Army Infantry, was decorated for\ngallantry in action in Korea. He joined Pacific Telephone in 1953, working as\na traffic staff assistant in Sacramento and Fresno, was promoted district traffic\nmanager, Stockton, in 1961, division traffic manager, Los Angeles, 1962, and\ngeneral traffic manager, Bay Area, 1964. He is married, has two daughters,\ntwo sons.\nJames W. Connor, 38, HRD's assistant director for planning, joined the\ndepartment's planning group in March, 1969, from the Department of Water\nResources, where he was deputy comptroller, and before that, since 1963, budget\nofficer. He entered state service in February, 1958, serving subsequently as\nbudget analyst with the Department of Finance, and assistant fiscal officer\nwith the Board of Equalization. He served two years as controller at\nHastings College of Law, University of California, then joined Water Resources\nas budget officer in 1963, receiving the Department's \"Award for Management\nExcellence\" in 1964. A native of Chicago, he received a B.S. degree in business\nadministration from the University of Illinois in 1953, then served as an\nAir Force officer 1953 through 1956 in Korea and Japan.\nSigurd I. Hansen, 49, deputy director heading HRD's Tax Collection and\nInsurance Payments Division, was formerly chief of the Bureau of Employment\nAgencies and Bureau of Electronic Repair Dealer Registration. He entered state\nservice in 1967 after 12 years as business manager, Lafayette School District,\ntwo years as purchasing director, Hayward High School District, five years with\nBurroughs Corporation in accounting machine systems. He is a graduate in business\nadministration from the University of California, Berkeley. During World War II\nhe was a naval aviator, serving in the South Pacific.\nBenjamin Hargrave, 51, northern region deputy director of HRD's Job Training,\nDevelopment and Placement Division, was previously education officer for the\nEconomic Opportunity Council in San Francisco. Prior to that he had spent\n22 years as teacher and principal in the Oakland Unified School District. When\nhe joined HRD, he was serving as president of the West Oakland Area Council, a\nmember of the Oakland Manpower Commission, and advisory member for Educational\nOpportunities Clearinghouse (PACT) and the East Bay Skills Center. He is also\na director of Oakland NAACP and Alameda Negro Leadership Conference. A veteran\nof World War II, Hargrave is a graduate of Springfield College, Mass. He obtained\nhis M.A. at San Francisco State College and did graduate work at U.C. Berkeley\nand Stanford University.\nLouis J. Johnson, 43, southern region deputy director of HRD's Job\nTraining, Development and Placement Division, was previously principal of\nJefferson High School, Los Angeles, and has been a teacher and administrator\nin the Los Angeles City School System since 1954. A native of Texas, Johnson\ngraduate from Howard University, Washington, D.C., and the University of\nSouthern California. He is a member of the National Principals Advisory Committee\nfor Upward Bound and the Council of Black Administrators. He has been active\nin manpower training programs in disadvantaged communities.\nDaniel R. Lopez, 51, deputy director heading HRD's Job Training, Development\nand Placement Division, was previously manager of the State's East Los Angeles\nService Center. A native of Oxnard, Lopez attended Vallejo Junior College,\nUniversity of California at Berkeley, and the University of Southern California.\nHe began state service in 1948 and worked in the Department of Corrections until\njoining the Service Center Program in 1966.\nAlan C. Nelson, 35, HRD's assistant director for legal affairs, was\npreviously Deputy District Attorney, Alameda County, since 1964. A native\nCalifornian, he is a graduate of the University of California's School of\nLaw (Boalt Hall), Berkeley, after which he spent five years as a private attorney\nwith a San Francisco law firm. In Alameda County, he strengthened the Family\nSupport Division of the district attorney's office and was president of the\nDistrict Attorneys California Family Support Council.\nJames W. Pool, 54, HRD assistant director, evaluation, began state service\nin 1966 as a publications coordinator. He joined the staff of the Human Relations\nAgency in 1967 as Assistant to the Secretary, Spencer Williams. A native of\nNeosho, Missouri, he is a graduate of the University of California at Berkeley.\nAfter three years as an NBC news editor, 1939-42, and four years of military\nservice, Pool joined Ventura County government, rising in 15 years from clerk\nto chief executive. From 1961 to 1966 he was Cost Reduction Administrator,\nAtomics International, a division of North American Rockwell, Inc.\nLynwood B. Steedman, 55, deputy director heading HRD's Management Services\nDivision, was previously assistant director, administration, Department of Employment,\nthe agency's principal administrative officer. He joined the department in\nSacramento 33 years ago as deputy registrar of employers, rose through positions of\nincreasing responsibility to the top post in 1963. He is a graduate in economics\nand personnel administration from the University of California, Berkeley.\nWilliam H. Tolbert, 61, deputy director heading HRD's Farm Labor Services\nDivision, held the same position in the State Department of Employment. He was\nappointed by Governor Reagan in 1967. From 1947 to 1967 he was manager of\nVentura County Citrus Growers Committee, during which time he also served 12 terms\nas president of the National Farm Labor Users Committee. He is a graduate in\nanimal husbandry from New Mexico State University. He was deputy administrator\nof the Department of Agriculture's Farm Labor Administration in 1942, and labor\nbranch of the War Food Administration and was ultimately regional director in\n1945-6 for the seven Western states.\nOctober 28, 1969 CE\nFACT SHEET\nCALIFORNIA STATE DEPARTMENT OF HUMAN RESOURCES DEVELOPMENT\n800 Capitol Mall, Sacramento, California 95814 (916) 445-9212\nDirector:\nGilbert L. Sheffield. Age 40. Appointed by Governor Ronald Reagan in\nFebruary, 1969, after having served as Assistant Vice-President, Personnel\nwith the Pacific Telephone Company.\nDepartment\nCreated as a component of the Human Relations Agency (Spencer Williams,\nOrigin:\nSecretary) by the 1968 Human Resources Development Act, landmark bipartisan\nlegislation passed nearly unanimously by the State Legislature. (Assembly,\nMay 28, 1968; Senate, August 1, 1968) Signed by Governor Reagan, August 24,\n1968.\nComponents:\nState Department of Employment ( 9,097 funded positions)\nService Center Program - excluding Employment (591 funded positions)\nState Office of Economic Opportunity (30 funded positions)\nCalifornia Commission on Aging (12 funded positions)\nLegislative\nTo create a single state agency and single state fund to deliver, along\nIntent:\nestablished lines of priority, a total system of job training and placement\nservices to provide the hardcore unemployed with an unbroken sequence of\nservices from intake through placement on the job and periodic follow-up\nand evaluation.\nUnique\nJob Agents: By the end of 1969, a total of 140 job agents will be at\nAspects:\nwork in two dozen disadvantaged communities throughout California, each\nwith specified caseloads of hardcore unemployed for whom they will have\npersonal responsibility. The job agent is a new breed of civil servant,\nrecruited this fall primarily from disadvantaged areas. Working with\nclients with long histories of unemployment or underemployment, he will\nbe charged with motivating his clients, providing them proper training,\nsecuring them meaningful employment, and maintaining regular communication\nwith them until they have completed 18 months on the job.\nHRD Centers: The Department expects to open a total of 18 HRD Centers\nwithin the next few months. These will be established in the following\nareas: Bakersfield, Compton, Fresno, Los Angeles (Avalon-Florence,\nCentral), Long Beach, Oakland (East Area-Fruitvale, West Area), Pasadena,\nSacramento, Santa Ana, San Bernardino, San Francisco (Mission District,\nBayview-Hunter's Point, Chinatown), San Jose and Vallejo.\nHRD's initial 140 job agents will be working out of these centers and\nthe eight established Service Centers located in East Los Angeles,\nSouth-Central Los Angeles, East Fresno, West Fresno, Richmond, San Diego,\nSan Francisco and Venice.\nActivation:\nLegislative deadline was January 1, 1970. Activation steps began October 1.\nEffectuation document signed by Governor October 28, designating Friday,\nOctober 31, as the formal activation date for HRD.\nFor further\nLionel Holmes 5-4529\ninformation:\nCharlie Ericksen 5-4262\nStatement by Spencer Williams, Secretary\nActivation of Human Resources Development\nState Capitol\nOctober 28, 1969\nWe in the Human Relations Agency take a special pride in the birth of\nthe Department of Human Resources Development.\nThe department - with a legislative deadline of January, 1970, for\nactivation - has developed with miraculous speed over the last year.\nI'd like to thank the many employees of all elements of the new\ndepartment for their help in its formation. I'd like also to commend\nmy Assistant Secretary - Lucian Vandegrift - who served as acting\ndirector of HRD during its initial weeks, and did a fine job of\nkeeping things moving until Gil Sheffield came aboard.\nToday, through the efforts of Gil Sheffield and his able staff, the\ndepartment is ready to undertake an assignment unique in our 50 states.\nIt is not unusual for California to pioneer new ways to meet old problems,\nand with the Department of Human Resources Development, we're at it again.\nNo other state in our country has yet dared to develop an attack on\nthe ills of poverty, unemployment and burgeoning welfare rolls as is\nbeing prepared by this new department.\nNow I would like to invite Governor Reagan and Gil Sheffield to join\nme in signing the documents which will officially activate the new\ndepartment, as of the final day of this month.\n==========\nState of California\nGovernor\nDepartment of Human Resources Development\nRonald Reagan\n800 Capitol Mall\nSacramento, California 95814\nCommission\non\nHuman Relations Agency\nAging\nSpencer Williams\nCharles Skoien, Jr\nSecretary\n5-8822\nDepartment of Human Resources\nOffice of\nBoards\nDevelopment\nEconomic\nand\nGilbert L. Sheffield\n-\nOpportunity\nAdvisory\nDirector\nJames E. Deasy\nCouncils\n5-9212\n5-7011\nPublic\nEvaluation\nPlanning\nLegal\nInformation\nAssistant\nAssistant\nAssistant\nLionel Holmes 5-4529\nDirector\nDirector\nDirector\nCharles Ericksen 5-4262\nJames W. Pool\nJames W. Connor\nAlan C. Nelson\n5-2923\n5-5310\n5-3576\nTax Collections\nJob Training,\nFarm Labor\nManagement\nand Insurance\nDevelopment &\nServices\nServices\nPayments Div.\nPlacement Div.\nDivision\nDivision\nDeputy Director\nDeputy Director\nDeputy Director\nDeputy Director\nSigurd Hansen\nDaniel R. Lopez\nWilliam H. .Tolbert\nLynwood B. Steedman\n5-0867\n5-6491\n5-4028\n5-8891\nNorthern\nSouthern\nRegion\nRegion\nDeputy Director\nDeputy Director\nBenjamin Hargrave\nLouis J.Johnson\n(415) 557-2476 (pub.)\n(213) 776-2222 (pub.)\n8-597-2476 (ATSS)\n8-623-2222 (ATSS)\nOF THE GOVERNOR\nSacramento, California\nContact:\nPaul Beck\n445-4571\n10-28-69\n#590\nGovernor Ronald Reagan today issued the following statement:\n\"Today, I would like to talk briefly about history, red tape, a\ntalent search and a helping hand.\n\"Let us begin with the history.\n\"Before we came to Sacramento we promised the people of California\nthat we intended to to our best to make jobs--not welfare--an accepted\nway of life for the less fortunate citizens of this state.\n\"We were convinced that the majority of the hardcore unemployed\nand the disadvantaged wanted a helping hand---not a handout.\n\"When we arrived in Sacramento we took a close look at the\nprograms that were supposed to be helping the unemployed and disadvantage\nget back on their feet.\n\"We found a maze of overlapping, expensive and often competing\nmanpower programs that simply were not doing this job.\nBy executive order, we created the Job Training and Placement\nCouncil and asked it to clear a path through the maze of red tape.\n\"The Council did its work well. It reviewed and evaluated the\npublic-funded training programs in existence, chopped away the red tape\nand came up with specific recommendations on how to get the disadvantaged\noff their knees and on to their feet.\n\"One of the first facts that became obvious was the need to gather\nthe proliferation of manpower programs together into a single agency.\n\"In our reorganization plan, we proposed the creation of a\ndepartment of Human Resources Development to accomplish this.\n\"The result was the Human Resources Development Act which passed\nboth houses with bi-partisan support and was signed into law last fall.\n\"That is the history. Now to the talent search. To direct this\nnew department, it was obvious that we needed a man with the executive\nability and the creativity to administer a department that would be\nresponsive to our state's needs.\n\"But we needed another talent--a feeling for people and a sensitive\nunderstanding of their needs. We found those qualities in Gil Sheffield\nand those who will be working with him.\n\"I am very proud of Gil's accomplishments in bringing HRD to life\nwell in advance of the legislative deadline for its activation.\n\"Now I would like our Human Relations Agency Secretary, Spencer\nWilliams, who has been working closely with Gil Sheffield and the HRD\nstaff to bring the new department to life, to introduce Gil.\"\nWAS\n# # #\nOFFICE or 100 GOVERNOR\nSacramento, California\nContact:\nPaul Beck\n10-28-69\n#591\n445-4571\nGovernor Ronald Reagan today formally activated California's new\nmanpower arm, the Department of Human Resources Development, as a major\nstep towards getting \"the disadvantaged off their knees and on to their\nfeet. \"\nCreated by the 1968 Human Resources Development Act, the department\nwill formally join the state's Human Relations Agency on Friday,\nOctober 31.\nHeaded by Gilbert L. Sheffield, it unites the state's Department\nof Employment, Service Center Program, Commission on Aging and Office\nof Economic Opportunity.\nWhile continuing the services presently provided by its components,\nHRD will focus greater attention on the special employment needs of\nthe state's disadvantaged areas.\nWithin the next few months, it will introduce HRD Centers to\n18 communities throughout the state. A \"new breed\" of civil servant--\nthe job agent--will be working out of these centers and California's\neight established Service Centers to give individual attention to\nspecified caseloads of clients with long histories of unemployment.\nA major goal of the new department, according to Governor Reagan,\nis to \"make jobs, not welfare, the accepted way of life for the less\nfortunate citizens of this state.\"\nSigning the official HRD effectuation document with the Governor\nwere Sheffield and Spencer Williams, Human Relations Agency secretary.\nSheffield, was named by Governor Reagan to direct HRD last February.\nTargeting on a January 1, 1970, activation deadline set by the\nlegislature, Sheffield brought the department into existence two months\nahead of schedule.\nSheffield described HRD as a department which \"will aim to get\nmaximum use out of our manpower dollars, without losing sight of our\nreal objective: To provide every Californian with an opportunity to\nshare in the affluence of our state\"\nHe said that HRD is operating with the same funding sources which\nits components had, and that the department's total staffing has not\nbeen increased by new programs or new positions such as the job agent.\nA total of 140 job agents will be at work by the first of the year,\nSheffield said. These were selected from a list of more than 4,000\ncandidates recruited in a campaign which centered in disadvantaged areas.\n\"The job agent will be the focal point of our new thrust, Sheffield\nadded.\n\"Our success will be measured by his ability to communicate\neffectively with his clients and to work in harmony with the employer\ncommunity,\" continued Sheffield, and added, \"Only with the full\nparticipation of the business community will our department be able to\nreach its goals.\"\n###\nWAS\nWelfare\nTHE STATES SEAL ( STATE\nThe Recipient\nTHE\nFraud Incidence Study\nConducted by\nTHE FRAUD REVIEW PANEL\nfor the\nSTATE OF CALIFORNIA - HUMAN RELATIONS AGENCY\nDEPARTMENT OF SOCIAL WELFARE\nTHE\nst\nPART II\nRecommendations\nJANUARY 1970\nJanuary 7, 1970\nMr. Robert Martin, Director\nState Department of Social Welfare\n744 P Street\nSacramento, CA 95814\nDear Mr. Martin:\nThe results of the study to determine the incidence of undetected\nrecipient fraud in the Aid to Families With Dependent Children (AFDC) caseload\nhave been reported to you under separate cover on this date.\nIn conducting this study new benchmarks have been established in coopera-\ntive relations between county and state government. The major part of the study\nwork has been performed by District Attorneys and members of their staffs. In\nspite of the extreme pressure of other responsibilities, these individuals and\nagencies have given generously of their time, sometimes at personal sacrifice.\nIn addition, a number of county welfare departments have also contributed investi-\ngative and other valuable staff services.\nThe taxpaying public which has the responsibility of caring for those\nwho are truly in need deserves to have confidence that the regulations governing\nthe welfare program are scrupulously adhered to. For the same reason, those who\nare in any way involved in the administration of the system have the absolute duty\nto insure that such is the case. Only in this way can the proper concept of\npublic support of welfare programs be realized.\nIn conducting this study the Fraud Review Panel was given a unique\nopportunity to survey and critically examine many of the procedures and problems\nrelated to the program.\nMr. Robert Martin\n-2-\nJanuary 7, 1970\nOur observations and the study findings clearly indicate a serious\nproblem is present which will require continuing attention. It appears most\nadvisable that a program be developed which will constantly assess the level of\nadministrator and recipient compliance with the law and regulatory requirements.\nWe recommend that a program be adopted which will provide for continuing review\nand monitoring of that compliance.\nAccompanying this letter are further recommendations developed during\nthe conduct of the study. Many are not new. Many have been discussed elsewhere.\nThe Panel believes, however, that the study findings add a new note of urgency,\nand it is for this reason that they are restated here. The findings in the report,\nthe comments and observations above, and the accompanying recommendations should\nbe viewed in a positive context. It has been the Panel's goal to establish the\nextent of fraud and to suggest ways in which waste can be curtailed to the end\nthat those truly in need may be most benefited.\nVery truly yours,\nFRAUD REVIEW PANEL MEMBERS\nReette Jahnson\nKeith C. Sorenson, District Attorney\nSan Mateo County ).\nJohn Miniz M\nJohn M. Price, District Attorney\nSacramento County\nRichard N. Parslow, Jr., District Attorney\nOrange County\nRay Ray T. T.Sullivan, Sullivan, Jr., County\nCounsel\nRiverside County\nTheres in\nRudolf H. Michaels, Chief, Legal Office\nState Department of Social Welfare\nRECOMMENDATIONS DEVELOPED FROM A\nSTUDY TO DETERMINE THE EXTENT OF RECIPIENT FRAUD IN THE\nAID TO FAMILIES WITH DEPENDENT CHILDREN WELFARE PROGRAM\nJanuary, 1970\nRECOMMENDATIONS\nState and County Administration\nA significant portion of welfare fraud losses result from the failure\nto report changes in family composition and income; either earned income, income\nin-kind, or income received from other sources. Related to this is the need for\na clearer understanding on the part of the recipient of his responsibility to\nreport such circumstances, and improvement in the system by which such reports\nand status changes are received and processed by the counties.\nIt is clear there is room for improvement in all of these areas. The\nrecipient-oriented caseworker must realize the serious implications for the\nrecipient as a result of his (the caseworker's) failure to insure the recipient's\nunderstanding of these requirements. The consequence of such a failure can lead\nto prosecution. While this fact should be impressed on the recipient, the case-\nworker must also understand that failure to adequately cover this subject in his\ndiscussions with the recipient may be exposing both to needless difficulty.\nA significant portion of the fraudulent conduct and many of the errors\nidentified in this study commenced or were permitted to continue unabated because\nsome caseworkers were not sufficiently aware of the danger signals. The apparent\nlack of training and/or interest on the part of some caseworkers may be viewed as\na significant factor associated with the incidence of fraud and error.\nThere is a serious lack of uniformity between the counties as to\n(1) when during the month such reports of changes in family composition and income\nare due, (2) the manner of processing the reports, and (3) the ease with which the\ninformation contained in the reports can be applied to the grant. In connection\nwith these problems the Panel recommends that:\n-1-\n1. Regulations provide for a mandatory, timely, simplified and uniform\nsystem for reporting income and changes in family composition by\nrecipients throughout the State.\n2. Regulations and forms on this and other subjects be written in a clear\nand concise manner to the end that ambiguity is eliminated. For\nexample, the word \"prompt\" would be better understood if a specific\nperiod of time were substituted; the words \"Income\" and \"Family\nComposition\" would be better understood if they were clearly defined\nand their definitions impressed on recipients.\n3. Monthly detailed status and income reports be required as a pre-requisite\nof paying aid.\n4. The recipient be instructed, before being asked to complete any document\nrelating to eligibility for aid, that any false statement will subject\nhim to criminal penalties.\n5. Regulations regarding signatories on affirmations and reaffirmations\nrequire that all adults in the home who affect the grant must sign\nthese documents, as well as any and all adults responsible for the\nchild.\n6. Greater attention be given to those cases in which there is variable\nincome or income from self-employment, as well as during those periods\nin which there are five weekly pay periods.\n7. Consideration be given to pressing disciplinary and/or legal action\nagainst caseworkers and others who deliberately or negligently overlook\nillegal situations or who aid and abet in the commission of welfare\nfraud.\n8. It be required that each applicant for aid receive a pictorial pamphlet\noutlining his responsibilities; and this document be followed up with\n-2-\nmailings at intervals in the future. An example of such a brochure\naccompanies this report as Appendix A.\n9. Efforts to simplify AFDC program regulations be continued. The extensive\ndetail involved in policy, regulations and calculation of the need and\nthe grant, results in confusion and misunderstanding of the program\nrequirements.\nIn the course of the study the Fraud Review Panel was exposed to some\nof the administrative complexities of the internal system at both the state and\ncounty level. The vastness and costs of these systems would seem to justify\nclose and continuing scrutiny to insure that the internal mechanism functions as\nefficiently and economically as possible. While payment documentation is a\nnecessity, attention should be given to simplifying the steps, eliminating\nunnecessary steps and providing some tracking system in order to determine without\ndelay the number and amounts of grants received in a particular case in a given\nperiod. Reports of all kinds should be carefully evaluated to insure they are\nstill justified in terms of their usefulness and purpose and, if so, that they\nare both accurate and timely. Although these comments are of a general nature,\nthe Panel recommends that:\n10. Continuing attention be given by the State Department of Social Welfare\nto updating the Master Persons File and developing procedures which\nwill assure that it remains current. In this connection it is important\nthat the counties continually provide current information for input\ninto the file.\n11. Regulations concerning the final payment of aid in the month of discon-\ntinuance be improved. At this point substantial overpayments can be\nmade which are difficult or impossible to recover due to the inability\nof the system to respond promptly to change.\n-3-\n12. Notices advising recipients of discontinuance contain in bold print\nthat there is no further entitlement; that any warrants received should\nnot be cashed but returned to the welfare department. Further, that\nsuch notice recite the penalty for non-compliance with this requirement.\n13. As an aid to maintaining better controls, support contributions received\nby the probation or other departments of county government in all cases\nbe uniformly transmitted to the welfare department to offset the grant\ninstead of being paid directly to the recipient.\nIn their review of sample cases in this study, members of the Panel have\nidentified a number of problem areas associated with the payment of aid and the\npolicies and regulations related thereto. As a means of resolving these problems,\nthe Panel recommends that:\n14. A system of closer followup be established to insure that extra sums\npaid recipients to meet specific special needs are actually used for\nthe purpose intended.\n15. A policy be adopted which will provide for the discontinuance of\naid when a recipient absents himself from the state for thirty days for\nwhatever reason.\n16. Regulations require the listing of parent social security numbers as\nwell as other potential employable family members on the application\nfor aid, and a greater effort made to obtain these numbers on current\ncases. Applicants for aid who do not have social security cards can be\nassisted in completing the simple application at the time the applica-\ntion for aid is taken.\n17. In cases involving fraud, the guilty party not have the benefit of\ndeductions for work-related expenses and/or other exemptions in\ncomputing the amount of the overpayment.\n-4-\n18. Caseworkers alone not have the authority of declaring individuals\nincapacitated. Supervisory staff should participate in this decision\nafter appropriate evaluation and verification.\nThe Panel makes two observations with regard to existing statutes and\nthe need for legislative action. First, the wording in Section 10500, Welfare\nand Institutions Code is such that it is being used for purposes contrary to its\nintent. Secondly, Section 11482 of the Welfare and Institutions Code, as related\nto Section 487.1 of the Penal Code causes a distinction to be made between welfare\nrecipients and non-welfare recipients.\nThe Panel recommends that legislation be introduced for the purpose\nof amending:\n19. Section 10500, Welfare and Institutions Code reads as follows:\n\"Every person administering aid under any public assistance\nprogram shall conduct himself with courtesy, consideration, and\nrespect toward applicants for and recipients of aid under that\nprogram, and shall endeavor at all times to perform his duties\nin such manner as to secure for every person the maximum amount\nof aid to which he is entitled, without attempting to elicit any\ninformation not necessary to carry out the provisions of law\napplicable to the program, and without comment or criticism of\nany fact concerning applicants or recipients not directly related\nto the administration of the program.\"\nThis section should contain language which speaks to the recipients'\nresponsibility and, further, sets forth the requirement that welfare\nbenefits are to apply as a supplement to all other benefits to which\nthe recipient may be entitled, and after property which exceeds the\nlimitations has been utilized.\n20. Section 11482, Welfare and Institutions Code reads as follows:\n\"Any person other than a needy child, who willfully and knowingly,\nwith the intent to deceive, makes a false statement or representation\nor knowingly fails to disclose a material fact to obtain aid, or who,\nknowing he is not entitled thereto, attempts to obtain aid or to\ncontinue to receive aid to which he is not entitled, or a larger\namount than that to which he is legally entitled, is guilty of a\nmisdemeanor.\"\n-5-\nThis section should be amended so it is consistent with Section 487.1 of\nthe Penal Code; that is welfare fraud resulting in an overpayment of\nless than $200 should be considered a misdemeanor and in excess of $200\nshould be defined as a felony. Such a change would clarify the present\nlaw.\nCaseworker-Recipient Relationships\nEfforts of caseworkers, both eligibility and social workers, are directed\ntoward assisting the recipient in obtaining financial independence and self-\ndetermination, as well as improving his self-image and his physical and emotional\nenvironment as well as that of his family. The tools used by the caseworker in\nachieving these objectives are the various financial aid and service programs\nsupported by the public or private organizations within certain limits and guide-\nlines. The caseworkers' responsibility to render aid in a humane and understanding\nmanner is obvious. Their responsibility in administering public funds and the\npublic trust involved is just as obvious.\nThere appears to be however, a minority of caseworkers who overlook and\nencourage acts by recipients which are contrary to the letter and intent of the\nprescribed limits and guidelines. Aside from fostering greater dependency in the\nrecipient, these few caseworkers should realize that welfare cheating is a morally\ndegrading act. Unlawful acts are just as degrading when committed by a welfare\nrecipient as when committed by an individual who is financially independent. For\nthese caseworkers to fail to shoulder their responsibility in this area - to\ndeliberately overlook or in other ways to encourage this behavior in recipients\nis directly contrary to basic social work philosophy. An indication of this\nadverse and negative attitude manifested itself recently when some caseworkers\nadvised their co-workers and recipients not to cooperate in this study, a study\n-6-\nwhich was instituted and conducted within the jurisdiction of welfare administra-\ntion. Public employees have the same obligation to taxpayers, as employees of\nprivate organizations have to their employers, and such activities should be dealt\nwith accordingly.\nWelfare recipients specifically and the public in general have a right\nto expect that caseworkers will be trained and knowledgeable in their areas of\nresponsibility. Although recognizing there is a great amount of detail involved\nin this work, the Panel believes that a significant part of the administrative\nerror and fraud identified in its report could have been avoided with improved\ncaseworker training,\nOn the general subject of caseworker-recipient relationships, the Panel\nrecommends that:\n21. Greater emphasis be placed on developing in caseworkers, a sophisticated\nawareness of the possibility that they may be deceived. This subject is\ndiscussed at greater length below.\n22. Increased emphasis be placed on supervision and review of case record\nmaterial by caseworkers and supervisory staff. More than isolated\ninstances were noted where glaring errors and omissions requiring\nfollow-up did not receive necessary attention or were subject to\nunnecessary delay.\nDetection and Prevention of Fraud\nIn general terms, one of the most pressing needs in connection with\npreventive programs is a systematic training program for caseworkers and eligibil-\nity workers. Such training should be included in the initial caseworker orientation\nand furthered by the use of in-service training programs. Involvement should be\nmandatory. A suggested plan for developing such a comprehensive program is contained\nin Appendix B.\nIn the area of detection and prevention, the Panel recommends that:\n-7-\n23. In consideration of the extent of welfare fraud and administrative\nerror revealed by the fraud study, county governments carefully\nreview the present level of fraud investigation and staffing to\ndetermine whether they are adequate to cope with the size of the\nexistent problem.\n24. A method be developed for identifying, for closer follow-up, those cases\nin which the recipient has previously been suspected of welfare fraud\nor has, in fact, been convicted of welfare fraud.\n25. The State utilize information developed by state and federal agencies\nas aids to administering the program. Systematic obtaining of informa-\ntion on recipients earnings, benefits and property would be of signifi-\ncant benefit in this regard.\n26. Cases involving large monthly totals of aid payments and other income,\nand cases involving unemployed or incapacitated parents, be scheduled\nfor special and more frequent follow-up.\n27. In instances where recipients are not furnished caseworker services,\nprovision be made for frequent review of eligibility.\n28. County governments be encouraged to expand their investigative staffs\nto meet the problems identified by the study. Smaller counties should\nreceive assistance in developing investigative staffs in the areas of\nchild support and welfare fraud, perhaps through a county pooling\narrangement.\n29. Where school attendance is a condition of receipt of welfare the\ncaseworker contact the school with sufficient frequency to insure that\neligibility continues to exist.\n30. The policy of non-scheduled home visits by caseworkers during normal\nbusiness hours be adopted by all counties.\n-8-\nDOES\nABOUT MONEY YOU GET FOR YOURSELF OR YOUR CHILDREN\nYOUR\nfrom your job\nfrom a child's father\n[⁻]\nSOCIAL\n0000\nfrom a child's job\n0000\nfrom rent\nC\nfrom your family\n[ ]\n000\nfrom disability\nfrom unemployment\n[ ] from social security\nfrom any other source\nWORKER\n[_]\nfrom your friends\n[_] from workmens' compensation\nKNOW\nABOUT PEOPLE IN YOUR HOME - WHEN ANYONE MOVES IN,\n?\nMOVES OUT, OR VISITS\n8 a friend\na family member\n[] another adult or child\n[] your child\nABOUT YOUR PROPERTY - THINGS YOU OWN OR BUY\nif you are buying or selling:\n[ ] a home\n8 [_] appliances\na car\n[] other property\n[⁻] 8 furniture\nif you are buying life\ninsurance\nHAVE YOU MOVED LATELY? ARE YOU PLANNING TO MOVE?\nDoes your social worker know your new address? []\nSCHOOL\nDo you have a child over 15 who does not go to school? []\nIF YOUR SOCIAL WORKER DOES NOT KNOW THE THINGS YOU\nHAVE CHECKED ABOVE, call him and tell him now this\nis for your PROTECTION I\n#93\n(a) Aug., 1968\nPROTECT\nFor your child\nto get the right\nWHAT\nA few people do not\ntell their social\nYOURSELF\namount of aid,\nyour social worker\nIS\nworker all the facts.\nmust know about:\nFRAUD\nThese people can be\nTELL\narrested for fraud.\nYOUR\nMONEY you or your\nchild get - no\n?\nWhat is FRAUD?\nSOCIAL\nmatter who or\nwhere it is from.\nFraud is a crime. A\nWORKER\nperson may have to\nTHINGS you own or\npay a fine and he\nare buying.\nmay be put in jail\nfor fraud.\nPEOPLE who live\nwith you - no\nWhen a person gets\nmatter who they\naid that he should\nare.\nnot get, he may be\nguilty of fraud\nPLANNING\nHave you told your\nWITH\nsocial worker ALL\nIF the aid was paid\nYOU\nhe must know to\nbecause he lied.\nTo\nHelp\npay aid for your\nchild?\nIF the aid was paid\nbecause he told only\nSTOP\nDon't wait for him\npart of the truth.\nto ask. Tell your\nFRAUD\nsocial worker ALL\nIF the aid was paid\nTHE FACTS now :\nbecause he did not\ntell all the facts\nright away.\nYou can help stop fraud. Check\nDEPARTMENT\nthe list inside this folder. If\nyour social worker does not know\nall these facts about you and\nyour family - tell him NOW !\nERESNO SQUATE WALFARE\nSUGGESTIONS FOR DEVELOPING A\nFRAUD PREVENTION AND DETECTION TRAINING PROGRAM\n1. The Director of the State Department of Social Welfare would have\nresponsibility for mandating this program in all counties.\n2. The curriculum would be developed by a group consisting of representatives\nof the County Welfare Directors' Association and the District Attorneys'\nAssociation who have demonstrated an interest in this area. Included would\nbe a Deputy District Attorney with experience in welfare fraud and child\nsupport, an experienced casework and eligibility supervisor, a county\nwelfare investigator and district attorney investigator as well as selected\nexecutive staff of the State Department of Social Welfare.\n3. Each new caseworker and eligibility worker would receive fraud detection\nand prevention training as a part of his orientation.\n4. Within the first six months the new staff member would participate in a\nfull days fraud prevention and detection training activity.\n5. Advanced courses would be provided for supervising staff at regular intervals\nand participation would be mandatory. Subject matter would be varied.\n6. Programs would include a heavy emphasis on prevention, as well as:\na. Identification of clues and leads\nb. Actions to be taken\nC. Referral procedures\nd. Recipient responsibility\ne, Staff member responsibility\nf. Case examples to illustrate\nAPPENDIX B\nTele\nWelfare\nCALGOVROFC SAC\nCALGOVROFC WSH\nTO: JIM JENKINS\nFROM: JANE S.\nDATE: JAN. 8, 1970\nQUESTIONS & ANSWERS:\nTelex\nMR. TWINAME, WHEN YOU SAY THAT YOU EXPECT CALIFORNIA TO STRAIGHTEN\nTHEMSELVES OUT IN SHORT ORDER, DO YOU HAVE A DEADLINE IN MIND?\nHOW LONG WILL YOU PERMIT THIS THING TO DRAG ON?\nA- IT IS NOT OUR INTENT TO USE THIS COURT ACTION OF YESTERDAY AS\nAN EXCUSE FOR ANOTHER LONG, DRAWN OUT DELAY.\nunion\nCOULD YOU GIVE US A MORE SPECIFIC TIME? 30 DAYS, 60 DAYS, 90 DAYS?\nA- I WOULD EXPECT THE ACTION BE CERTAINLY TAKEN BEFORE APRIL 1ST\nDATE THAT WAS INDICATED BEFORE THERE WAS THE DATE OF THE CUT OFF.\nWHAT WAS YOUR DECISION THAT YOU HAVE ALREADY MAILED AND ARE NOW\nRESCINDING? WHAT WAS THE CONTENT?\nA- I WILL GIVE YOU A COPY OF THAT.\nTHE AMOUNT OF MONEY INVOLVED\nWAS APPROXIMATELY $684 MILLION.\nTelex\nI DO NOT UNDERSTAND THE COURT COMPLICATIONS.\nA- NEITHER DO I.\nWHAT IS GOV. REAGAN GOING TO DO THAT WILL EXPEDITE THE COURT\nSITUATION?\nA- THE TAXPAYERS' SUIT WAS BROUGHT IN LOS ANGELES COURT RESTRAINING\nTHE STATE FROM IMPLEMENTING ITS REGULATIONS FOR ONE REASON AND THE\nWELFARE RIGHTS ORGANIZATION SUIT BROUGHT IN SACTO. RESTRAINING THE\nSTATE FROM IMPLEMENTING ITS REGULATIONS FOR ANOTHER REASON. THE\nGOV. HAS ASKED THE SUPREME COURT TO CONSOLIDATE THE TWO CASES AND\nMAKE ONE JUDGEMENT AND ASSUME JURISDICTION IN ORDER TO GET OUT OF\nTHIS JUDICIAL DEADLOCK.\nSUPPOSE THE COURT MOVED THEOTHER WAY AND AGREES WITH THE STAE\nTelex\nLEGISLATURE COUNSEL, AGAINST THE STATE ATTORNEY GENERAL THAT THE\nREAGAN ADMINISTRATION CANNOT SHIFT WELFARE RULES UNILATERALLY\nWITHOUT LEGISLATIVE CONCURRENCE AND SUPPOSE BY APRIL 1ST, THE\nSTATE LEGISLATURE HAS~NOT ACTED, CAN YOU TELL US INDEFINITELY\nUNDER THOSE TWO CONDITIONS YOU WILL ORDER CUT OFF?\nA7 THERE ALWAYS SEEM TO BE NEW CIRCUMSTANCES. IF THE COURT RULES\nAGAINST THE STATE OF CALIF. WE WILL HAVE NO CHOICE BUT TO CUT\nunion\nOFF THE FUNDS.\nEND FOR NOWO\nA0941X\nvvxuiv\nURGENT\nCalifornia elfare Lead\nWASHINGTON AF - The Lixon administration reversed today\nits decision to cut off 700 million in aid te California after\nGov. Renald Reagan premised to cenrly with federal relief\nregulations.\nAn aide to Elliot Pichardsen- Secretary of Realth. Iducation\nand elfare, said the receipt of o teleoram from Reggan this merning\ncaused edministration officials to reverse their earlier decision to\nend matching welfare financial aid to California because of the\nstate's alleged violations ef federal regulations.\nThe aile said California promised to alter its meximum payment\nto femilies-receiving aid for dependent children as soon as\ncourts allowed the change.\nAt issue in California's surresed failure to fulfill the 1967\nlaw requiring 2 cest-of living adjustment in maximum rayments to\nAFDC families. But states are allowed to rey less than the full\nmaximum they establish.\nA federal, etc., 7th graf A065\nBy G. C. THELEN Jr.\nAssociated Fress Writer\nLt94:aes Jan. 8\n1970\nPB\nWelfare Social Security\nFYI\nState of i \"fornia\nfile\nHuman Relations Agency\nMemoradum\nTo\n: Edwin Gray\nDate :\nApril 1, 1970\nAssociate Press Secretary\nGovernor's Office\nFile No.:\n25:24\nState Capitol\nSubject:\nStatus of Social\nSecurity Pass-On\nFrom : Office of the Secretary\nThe federal Tax Reform Act of 1969 increased Social Security benefit\npayments by approximately 15% effective January 1, 1970. Sections\nof the Act require that all of the increases received by beneficiaries\nfor the months of January and February are to be disregarded for the\npurpose of computing public assistance grants excluding Aid to the\nPotentially Self-Supporting Blind. In addition, four dollars ($4.00)\nof the increases for the months of March, April and May are required\nto be disregarded (excluding Aid to Families with Dependent Children\nand Aid to the Potentially Self-Supporting Blind) in computing aid;\n\"passed along\", in other words. As a result:\n1. California is passing on the increase to the extent required\nby federal law, but no more;\n2. Public Assistance recipients who have OASDI income will get\nthe full 15% increase for January and February. In March,\nApril and May they will get $4 of the increase. Thereafter,\nthey will get none of the increase, as permitted by the\nSocial Security Amendments of 1969;\n3. The additional Social Security income saves the State $19\nmillion in aid payments in 1970-71. This has been antici-\npated in the Governor's Budget;\n4. Congress, however, may pass emergency legislation to mandate\nthe $4 \"pass on\" in 1970-71;\n5. The California Legislature is also considering bills to re-\nquire passing on up to $7.50 in the next (70-71) fiscal\nyear;\n6. The Legislature is also currently considering several mea-\nsures which would increase the public assistance grants of\npersons not receiving social security benefits by four\ndollars ($4.00). This department is opposing these measures\non the basis of the cost of living adjustments granted in\nDecember, 1969. Passing on $4.00 to social security recipients\nwould cost an estimated $6.2 million for Fiscal Year 70-71. If\n$4.00 were also given those not receiving Social Security, it\nwould cost another $4.5 million.\n-2-\nThe State Department of Social Welfare has issued Department\nBulletin No. 6557 (attached) to implement the Tax Reform Act.\nThis bulletin provides the legal authority for California to\ncarry out the federal mandate. The pass-on provisions apply\nonly to those public assistance recipients who receive Social\nSecurity benefits.\nThis month, Social Security beneficiaries will receive a lump\nsum check from the Social Security Administration for the amount\nof increase applicable to January and February. This check will\nhave no effect on the grant received by public assistance recip-\nients excluding Aid to the Potentially Self-Supporting Blind.\nSocial Security checks received after April 1, 1970, will reflect\nthe 15% increase for beneficiaries. The amount of this increase,\nless $4.00, will be deducted from public assistance grants re-\nceived by Welfare recipients for the months of April, May and\nJune, excluding Aid to Families with Dependent Children and Aid\nto the Potentially Self-Supporting Blind.\nWALTER L. BARKDULL\nAssistant to the Secretary\nHuman Relations Agency\nCC: Jerry Martin\nDennis Flatt\nState of California\nHealth and Welfare Agency\nMemorandum\nTo\n:\nPaul Beck, Press Secretary\nDate\n:\nApril 21, 1970\nOffice of the Governor\nfile\nSubject:\nPreliminary Information\non U.S. Supreme Court\nDecisions--Percy V.\nMontgomery; Lewis v.\nStark\nFrom : Department of Social Welfare\n744 P Street, Sacramento 95814\nThe Supreme Court reversed the three-judge district court by upholding health\nand welfare federal regulations dealing with the income of a step-father and\na man in the house.\nThe gist of the opinion is that, in the absence of proof of actual contributions\nby a substitute father, the state may not assume that the income of the man in\nthe house is available for the support of a dependent children family. In other\nwords, no benefits can be denied or reduced until such income is actually avail-\nable for current use on a regular basis.\nThe State of California had heretofore interpreted language in the Social\nSecurity Act which permitted the state to consider for grant purposes, funds\nfrom the man in the house. However, a federal regulation ran counter to that\ninterpretation and the court favored the federal regulation.\nThe step-father provision was written into law in California in 1951; the man-\nin-the-house provision became a state regulation in 1956. It was enacted into\nlaw in 1961.\nAn approximate estimate of what this decision will cost is as follows:\nState General Funds\n$11,675,000\nCounty\n11,621,000\nFederal\n16,870,000\nTotal $40,166,000\n34,167,200\nThe court's opinion will definitely influence and perhaps preclude Sections 60\nand 61 of Duffy's Bill AB 1360. The decision, of course, will reduce fraud\nas postulated in the department's fraud study because the court has eliminated,\nfor all intents and purposes, the crime involved.\nAs Lowell Thomas used to say, \"There's good news tonight.\" In this case, we\nhave just received word that the Supreme Court has vacated the judgment of the\nDistrict Court in Kaiser V. Montgomery. The case is being remanded to the\nDistrict Court for further consultation in light of the Dandridge decision.\nNothing will happen until there is a further hearing in the U.S. District Court\nin San Francisco. Kaiser looks like a winner.\nRobert Mantan\n70-71\nEst. fiscal\nROBERT MARTIN\n8,470,900 G.F Countries\nimpact in\nDirector\n4,081,800\nFed.\n1970-71\n12,251,000\ncc: Lucian B. Vandegrift\n24,810,800 Tot\nWelfare\nState of California\nHuman Relations Agency\nMemorandum\nTo\n:\nDate\nRus Walton\nMay 7, 1970\nProgram Development Secretary\nFile No.:\n21:23\nFrom : Office of the Secretary\nfile\nSubject:\nCalifornia's ranking in\nPublic Assistance payments\nFor your consideration in preparing any statements for the Governor,\nI am transmitting herewith a memorandum prepared by Dennis Flatt, of\nour staff, regarding California's ranking in Public Assistance payments.\nThese items often come into controversy, and I felt should be available\nto the Governor for whatever value they may be in dealing with averages.\nLUCIAN B. VANDEGRIFT\nSecretary\nce: Paul Beck, Press Secretary\nRobert Martin, Director, Department of Social Welfare\nLBV:sm\nencl\nas\nDEL\nСОЛЕВИОВ?\nCOAE\nState of California\nHuman Relations Agency\nMemorandum\nTo\n:\nLucian B. Vandegrift\nDate : May 1, 1970\nSecretary\nFile No.: 26:35\nSubject: California's Ranking\nin Public Assistance Paymen\nFrom : Office of the Secretary\nFor your information, I have extracted a few statistics from the\nNovember, 1969 edition of Public Assistance Statistics, which is\na publication of the U.S. Department of Health, Education, and\nWelfare. I think that it is important to keep on top of Califor-\nnia's ranking with respect to other states, since this question\nis frequently asked.\nName of\nCalifornia's U.S. Average California's\nProgram\nRanking\nPayment\nPayment\nOld Age Assistance (OAS)\n#3\n$73.40\n$107.70\nComment: California is exceeded by the\nstate of New Hampshire, which\npays $117.70; and the state of\nIowa, which pays $109.35.\nAid to the Blind (AB)\n#1\n$98.25\n$150.75\nComment: The next closest state is\nMassachusetts, which pays $146.85\nAid to the Permanently\nand Totally Disabled (ATD)\n#3\n$89.15\n$126.70\nComment:\nCalifornia is exceeded by the\nstate of Iowa, which pays $135.45\nand the state of Hawaii, which\nhas an average payment of $130.25\nAid to Families with\nDependent Children (AFDC)\n#18\n$44.80\n$ 49.75\nComment: To keep this memo concise, I\nwon't list the states which\nexceed California, but you may\nbe interested to note how the\nother large states compare with\nCalifornia. New York has an\naverage payment of $64.05 per\nrecipient; Illinois, $50.30;\n- 2 -\nPennsylvania pays an average\nof $52.15; Massachusetts pays\n$68.65.\nI'll try to keep you informed as these figures change from time\nto time.\nDennis\nDENNIS O. FLATT\nAssistant to the Secretary\nRemarks before a Joint Meeting of the\nSenate Finance Committee and\nAssembly Ways and Means Committee,\nJune 8, 1970\nGentlemen:\nMay I express my appreciation to both Chairmen and all members for\ntheir willingness to hear this presentation in joint session.\nI come before you with news of a reduction in anticipated\nrevenues and, at the same time, facts concerning expenditures, largely\nbeyond our control, that will exceed original estimates.\nWith your permission, I should first like to turn to fiscal year\n1969-70, the year which is just now drawing to a close. Our revenue\nestimates for this year were made about December, 1968 and were\npresented to the Legislature in early February, 1969. Few economists\nin this country predicted at that time that nearly a year later the\nstock market would suffer a substantial decline, cutbacks in the\naerospace industry would increase unemployment and some weak spots\nwould appear in the economy.\nNevertheless, these events did occur and it is not surprising to\nany of us that, as a result, we will receive from various tax sources\nthis year less money than originally anticipated. It now appears that\nrevenues will fail to achieve our projected goals by only $9 million.\nWelfare expenditures will be substantially above original\nprojections. It was originally anticipated that the State would pay\nout for welfare $526 million. Subsequently, this was increased\n$26 million to a new total of $552 million. It is now apparent that\nexpenditures will exceed even this amount by $20 million, for a full\nyear total of $572 million. There is some correlation between a soften-\ning economy and an increase in welfare payments, although it is less\nthan might be expected. Many of those who have recently become\nunemployed have substantial unemployment insurance. Additionally, many\nare skilled persons from the aerospace industry who normally do not\nbecome welfare recipients. Either their own financial resources or\nexceptionally strong motivation toward reemployment keeps them off\nwelfare rolls. However the award of the B-1 contract to California,\nannounced Friday by Senator Murphy, will certainly ease the unemployment\nproblem in Southern California.\nThe Director of Social Welfare does tell me, however, that welfare\nrolls continue to expand beyond original projections in part due to\nactivity of those who advise potential welfare recipients of additional\nbenefits available. The Director further informs me that some of these\nadvisors are employed by the federal government.\n-1-\nIt is not my purpose here to debate the philosophy of this activity\nbut only to apprise you of its financial implications.\nThe total population of California now slightly exceeds 20,000,000\nand the number of welfare recipients at the city, county and state\nlevel is currently estimated to be in the neighborhood of $1.8 million.\nThis includes the categorical aids at the state level and indigent aid\nat the county level. In these categories, it appears that approximately\none out of eleven persons in this state is receiving some form of\nwelfare grant.\nThe Medi-Cal program has stayed within its budget for 1969-70,\nbut to leave this impression without some explanation would be\nmisleading.\nMedi-Cal expenditures have actually exceeded original projections\nby approximately $18 million. However, diligent work on the part of\nauditors for the Department of Health Care Services has simultaneously\ndiscovered overpayments made during earlier years. These overpayments,\nwhich we term audit recoveries, were made in large part to counties and\namount to approximately $18 million.\nAn opinion was obtained from the Attorney General that these audit\nrecoveries were properly creditable to this year's operation and they\nhave been so credited.\nThe situation, however, is not as simple as merely expending\n$18 million more than was anticipated and balancing this by unanticipated\naudit recoveries in like amount. The audit recoveries are not in cash,\nbut over a period of months must be retrieved from the counties in\norder to disrupt as little as possible their cash flow.\nHad no further administrative actions been taken, the budget for\nthe Department of Health Care Services would have been in balance, but\ntheir cash flow would have been short by the approximate figure of\n$18 million. This situation was compensated for by the fact that the\nDepartment of Health Care Services did not pay to the Department of\nMental Hygiene billings of some $19 million in the current fiscal year.\nThis will be reflected as an amount payable at the end of the year by\nthe Department of Health Care Services and an amount receivable by the\nDepartment of Mental Hygiene, and can be liquidated as the audit\nrecoveries are reflected in cash.\nAt the same time, I should point out to you administrative actions\ntaken by the Director of Health Care Services which will have an effect\nupon the 1970-71 fiscal year. It became increasingly apparent that\n-2-\nbills submitted by providers to the intermediaries were improperly made\nout. Therefore, in August, 1969, the Director of Health Care Services\nsent a letter to the intermediaries, stating that commencing April 1,\n1970, the intermediaries would return all bills not fully made out.\nThis action actually began in May 1970 after notification to all providers\nThe effect, however, is certainly to postpone from 1969-70 to\n1970-71 a certain amount of payments.\nWe are greatly impressed with the C.H.A.P. project in Sacramento\nCounty which has greatly reduced the average stay in hospitals here.\nThis concept can now be exported statewide with a corresponding reduction\nin hospital stay. We are hopeful that this can be done with the support\nof the California Medical Association.\nDepartments funded from the General Fund will make additional\nsavings in the current fiscal year of approximately $38 million. These\nsavings are over and above all budgeted savings and come about through\nstringent efforts of department heads to economize.\nThese savings more than offset the drop in revenue and the increase\nin welfare expenditures. The net result will be a surplus $9 million\nlarger than anticipated at the end of fiscal year 1969-70. To this\n$9 million can be added $4 million reported to us by Departments as\nprior year savings. This totals $13 million.\nI should like now to turn to the revenue picture for 1970-71.\nWhen I first presented the 1970-71 budget to you, I indicated\nGeneral Fund revenues would be $4.76 billion if inflation continued at\nits current pace, but $4.65 billion if an economic dip took place.\nBecause economists nationwide were evenly split on the course\nof the economy, we advised you that we were arbitrarily choosing a\nmiddle ground of $4.707 billion.\nIt is now evident that economic trends have followed the latter\ncourse; that is, a slight hesitation.\nOur current projection of General Fund revenues is $4.636 billion,\nvery close to the lower estimate made in February but a drop of $71\nmillion from the middle projection chosen.\nI would like now to turn to the picture on welfare and Medi-Cal\nboth insofar as the State is concerned and also the federal government\nand the counties.\nThere is ample evidence financially that we have created services\nfor our people which are rapidly growing beyond our ability to pay.\nOn the federal level, let me give you an example. There is now before\n-3-\nCongress a bill to make administration of welfare services a closed\nend appropriation and to set the limit at 110 percent of this year's\nfigure. If administration were used as that term is commonly understood,\nthere should be little difficulty in living with a 10 percent increase.\nUnfortunately, however, administration in the welfare sense is far\ndifferent.\nUnder administration the federal government lists, for example,\nall of the salary of each social worker. The need for social workers\nis determined by caseload. The size of caseload and the eligibility\nare in large measure determined by federal statutes and regulations.\nThus, on one hand, the federal government is telling us who may\nbe a welfare recipient and how many employees we will need to process\nthis caseload. On the other hand, it is informing us that we cannot\nexpect more than a 10 percent increase in federal funds to cover this\nexpense, no matter how large it grows. The result, obviously, is to\nshunt off a tremendous burden to the states and the counties.\nTurning for a moment to the county level, we find county super-\nvisors strongly protesting the welfare burden which is placed upon them\nby the federal government. Supervisors are vigorous in blaming\nsubstantial tax increases on these activities. In Los Angeles, for\nexample, the supervisors have proposed a 94 cent tax increase. The\npresent county tax rate is $2.90 per $100 assessed valuation, so the\nnew rate represents almost a 33 percent increase in one year.\nOf the 94 cents additional need, the County Administrator informs\nme 57 cents is brought about by welfare and 61/2 cents by Medi-Cal type\nexpenses.\nThere, the number on welfare is expected to be 842,000 next year,\nup 156,000 from this year. One out of nine will be on welfare.\nRecipients on AFDC numbered 304,000 in April, 1968, when the courts\nruled out duration of residence. By June 30, 1971, three years later,\nthe number is expected to be 672,000, or more than double. While the\nentire growth is not attributable to this ruling, a portion of it is.\nVentura County has had a long history of small annual county tax\nincreases and even some decreases. Prior to this year, the largest\nincrease was 9 cents. This year it is programmed at 44 cents, with\n10 cents alone being allocated to welfare increases.\nWhen I presented the budget in early February, I pointed out that\nthe four year budgeted growth in both welfare and Medi-Cal had been\n80 percent and that there was no letup in sight. I am now before you\n-4-\nto state that even our original estimate of some 16 percent increase\nin the budget year coming up for these two services is below reality.\nCurrent projections indicate that welfare will increase an additional\n$40 million and Medi-Cal an additional $30 million.\nThese spiraling increases must be brought to a halt if the\ntaxpayer is not to be crushed or normal functions of state and county\ngovernments squeezed out of existence.\nThis Administration has spoken out repeatedly on the need for\nlimits on welfare spending. Recently the Governor communicated directly\nto the President his concerns regarding a proposed welfare program\nbefore the Congress.\nWe are working directly to achieve modification of federal regula-\ntions which are unnecessarily costly.\nAs an example, the courts recently held that a welfare recipient\nis entitled to a hearing before his payment benefits can be discontinued.\nThe judge did not specify the type of hearing. California has a two-\nstep process an evidentiary hearing held by the county, where many\ncases are quickly and fairly disposed of, and a more formal, \"fair\nhearing\" conducted by the state.\nUnder the latter, a miniature trial is conducted, with a full and\ncomplete transcript kept and typed, a recommended decision made which\nmust be reviewed and passed on at a higher level.\nThe Secretary of HEW now proposes that all cases being discontinued\nor receiving a reduction in payments must go through the full \"fair\nhearing\" process, effective July 1, 1970. This will increase costs\ntremendously. The state will have to hire an estimated 100 referees\nand support personnel to pick up the extra workload. Meanwhile, the\nstate must bear the cost of continuing welfare payments pending the\noutcome of the more burdensome \"fair hearing\" procedure, no matter how\nunjustified the claim.\nThis proposed regulation goes beyond the limits imposed by the\nUnited States Supreme Court. The court did not specify hearings for\npayment reductions, nor did the courts specify formal \"fair hearings.\"\nIn fact, the court supported the use of evidentiary type hearings.\nTherefore, there is no good reason why these federal regulations should\nnot strictly comply with the lesser requirements set forth by the court.\nThe Director of Social Welfare will be prepared, at your later\nconvenience, to give you additional examples of instances in which\nregulations have exceeded statutory law. No longer can we in the State\nor the counties bear the unnecessary burden of regulations which go\nbeyond legal requirements,\n-5-\nThere have been many suits carried to the Supreme Court by welfare\nrecipients, anxious to enlarge their benefits. There have been few by\ncities and counties, seeking to limit spending which is depriving the\nmajority of their citizens of other services which they very much want.\nWe are confident that, working in cooperation with Washington, we\ncan obtain consideration of this problem. In the event we are\nunsuccessful, we will have no hesitation in joining with our cities\nand counties in an effort to get relief through the courts.\nWe recognize that changing federal welfare regulations will be a\nlengthy procedure, necessitating the prediction that welfare expenditures\nwill be $40 million more than originally anticipated.\nThe drop in revenues plus the increases in welfare and Medi-Cal\nadd up to a total of $141 million. Since the Governor's budget must be\nin balance, I should like now to turn to the ways in which we expect to\nmeet that figure.\nWe originally predicted a free surplus of $28 million at the end\nof 1970-71. We have this evening noted that the current year will end\n$13 million better than anticipated.\nThese figures total $41 million, all of which is available to meet\nthe projected shortage of $141 million.\nThe Department of Finance has already forwarded letters to the\nBudget Committees, reducing the Governor's budget by a net $15 million,\nof which we may now take note. We are now faced with a problem of\nfinding $85 million.\nAfter careful deliberation, one ofyour committees voted to elimin-\nate salary increases for instructional and instructional related\npositions at the University and the other voted similar action at the\nState Colleges. We now indicate our willingness to accept that\ndecision and are suggesting a decrease in the budget of $19 million,\nwhich was the total of your separate actions.\nWe are also agreeable to your action in declining to fund the\nAcademic Senates of the two segments of higher education, a reduction\nof approximately $1/2 million.\nOriginally, the Governor's budget contained $34 million in capital\noutlay from the General Fund for higher education. Some of this is for\nprojects which are started, or for equipping facilities which are near-\ning completion. We propose the elimination of $20 million from General\nFund projects presently available or included in the Governor's budget.\n-6-\nBy agreement made several years ago, overhead funds provided\nthrough contracts with the federal government are divided between the\nUniversity and state government. In the current year these funds\nexceed original estimates by $5 million and the General Fund share is\n$2½ million. This does not involve any renegotiation. In fact, the\nUniversity will also be receiving from this source $2½ million more than\nexpected.\nI have already spoken out strongly against the unchecked spending\nin welfare. In the limited field available to us, we propose to reduce\nthis crushing blow upon taxpayers by $211/2 million through the following\nactions:\nReduce homemaker and attendant care\n$10 million\nReduce special needs\n2 million\nEliminate special home repair allowances\n1½ million\nRedefine unemployment at 30 hours\n1½ million\nReduce educational stipend\n1/2 million\nReduce personal grants---out of home care\n5½¹₂ million\nCut Department of Social Welfare budget operations\n1/2 million\n$21½ million\nI also have been informed that there is approximately $5½ million\navailable through increased audit recoveries of the counties in the\nSocial Welfare program. We hope that once put on notice that the\ncounties will put their house in order and thereby reduce costs as\nreflected in the ongoing program rather than as audit recoveries.\nA total of $4 million will become available to the General Fund as\na result of federal matching in the childrens' centers program. The\nDepartments of Education and Social Welfare have developed an inter-\nagency contract which will provide for improvements in the existing\nprogram and will produce federal matching funds. The improvements in\nthis program will result from meeting the Federal Interagency Day Care\nStandards required for federal matching.\nThere will be available in 1970-71, including prior year funds,\n$12 million on a cash basis for reimbursement of local expenditures for\nflood control projects. The program has been moving very slowly as it\ndepends largely on federal funding and the federal government has major\nbudgetary problems. We believe a reduction here of $4million will leave\nsufficient funds to sustain the program at the 1969-70 level of\nreimbursement.\nWe originally requested $1 million for the Title V-Manpower\nDevelopment and Training Act in the expectation the program would be\nfunded at the federal level. The federal funds have not been forth-\ncoming, therefore State funds will not be necessary.\n-7-\nTwo minor shifts to federal funding, in vocational educational\nfunding and Public Health regional diagnostic centers, will make avail-\nable $1½ million.\nTextbooks are normally printed on a multi-year cycle but need not\nbe. By printing only one year's needs, not a single student will be\ndeprived of a single text, but $1½ million can be saved. Obviously\nthis is a deferment to a \"pay as you need\" basis.\nProperty tax relief for senior citizens amounted to $7.8 million\ntwo years ago, and $8.2 million this year, an increase of $400,000. Even\nif this increase were to double to $800,000 in the budget year, a total\nof $9 million would suffice. Since we had budgeted $10 million, we can\nsafely lower this estimate $1 million.\nWe can withdraw $2½¹₂ million from capital outlay designed for\ndevelopment at San Clemente State Beach and $1/2 million from Agricultural\nDistrict Fairs and the Exposition for $3 million in reductions. I have\nbeen informed it would not be possible to spend the San Clemente money\nin 1970-71 in any event.\nThis balances the budget but I would like to return momentarily\nto higher education. With the passage of Proposition 7, sale of higher\neducation bonds becomes possible again. The Treasurer has already\nannounced an offering of $50 million for June 16 which must be considered\nwhen evaluating the $20 million cut proposed.\nThank you very much.\nVerne Ove.\nDirector\nDept. of Finance\n-8-\nWELFARE REFORM\n6-11-70\nC. - 2.\n1. Pending enactment and implementation of national welfare\nreform legislation, Congress should immediately amend Title\nIV A of the Social Security Act so as to provide that,\nirrespective of any other provisions of law, families with\ntotal gross income from all sources which is equal to the\nincome received by a specified percentile (lower 25%) of all\nfamilies in a particular state or the poverty level, which-\never is lesser, would be ineligible for any aid payments in\nwhich the Federal Government participates.\n2. Insure that any federal welfare legislation passed by the\nCongress contains the following provisions:\na. Clearly establish that its purpose is to assure\na national minimum standard to support those unable\nto take care of themselves;\nb. Establish a method for determining an acceptable\nrange of state effort in support of aid payments.\nThis might be expressed as a relationship between\nstate expenditures for welfare and such bases as\nper capita income; total state budget; federal income\ntaxes collected in that state, etc.\nC. Specify that the Federal Government would share\nnational revenues with the states in whatever amount\nis needed to make up the difference between state\nfiscal resources and effort (as determined in accordance\nwith \"b\" above) and the cost of maintaining national\nminimum standards of aid.\nd. Establish minimum standards for aid which take into\naccount national differences in the cost of living.\ne. Provide financial incentives to states to administer\non an integrated basis all the aid payment programs\nin that state regardless of funding source.\nf. Provide financial rewards to states which demonstrate\nthe capacity to administer these programs at some\nspecified level of efficiency above national norms.\n4. Immediate action by the Secretary of HEW to:\na. Establish \"net\" earnings as the basis for determining\nthe amount of earned income to be disregarded under\ncurrent provisions of law.\nb. Maintain the present two-step fair-hearing process as\nauthorized by the U.S. Supreme Court.\nC. Make the use of simplified methods of determining\neligibility for AFDC completely optional with the\nstates.\n5. Hunger and malnutrition exist in the states. Current food and\nnutrition programs are diffuse and tangled in conflicting\nadministrations. They are ineffective in reaching the most\nseriously deprived families and children. To combat hunger\nand malnutrition:\na. Consolidate state and local administration of food\nprograms under one agency to increase efficiency and\nfiscal control.\nb. Make programs more accessible to the most needy -\npersons with little 'or no income, lacking transportation,\nhaving insufficient cash for food stamp purchase,\nignorant of help available.\nC. Remove existing provisions prohibiting counties and\ncities from participating in both the Food Stamp\nProgram and the Federal Commodities Distribution\nProgram.\nd. Reduce the purchase requirements for food stamps.\ne. Generate broad community understanding and partici-\npation through public information and enlistment of\nvolunteers to help in consumer education and training\nof low income people in purchase and use of food.\nEmploy the poor in such programs.\nf. Test innovative programs and procedures in critical\npoverty areas. Prepare for extension of successful\nventures into all communities of the most neady persons.\nCalifornia comments June 11, 1970\nNational Governors' Conference\n61st Annual Meeting\nColorado Springs, Colorado\nAugust 31 - September 3, 1969\nC. - 2.\nWELFARE REFORM\n1. Substitution, on a phased basis, of a federally financed system\nof welfare payments for the current federal-state program for the aged,\nblind, disabled and dependent children, and including also the general\nassistance programs now financed by the states themselves. Eligibility\nand grants would be determined by the federal government; the system would\nbe state administered under federal guidelines. The system should include\nrealistic income exemptions to provide incentives for persons to seek\nemployment. Adequate daycare for children of working mothers and an\nexpanded federal job training program should also be assured.\n2. Increase in the present levels for all payments under the Old Age\nSurvivors Disability Insurance Programs with a minimum payment of $100 per\nmonth.\n3. Transfer of the present Old Age Assistance, Aid to the Permanently\nand Totally Disabled and Aid to the Blind programs to the Social Security\nProgram, with payments being made from federal general revenues to the Social\nSecurity Trust Fund to cover the increased cost.\n4. Review by the Secretary of Health, Education, and Welfare of federal\nregulations promulgated by his predecessor as to their adverse effect with\nrespect to the following:\na. The use of the declaration system for determining welfare\neligibility.\nb. The continuation of welfare payments during the pendency\nof appeal to persons whose grants are reduced or who are\ndetermined ineligible, and the requirement that states assure\nthe provision of attorneys for appellants.\n5. To combat hunger and malnutrition:\na. Increased federal funds for the Food Stamp Program so that\nwelfare recipients and low-income persons in all states\ncould be covered by the Food Stamp Program.\nb. Removal of existing provisions prohibiting counties and\ncities from participating in both the Food Stamp Program\nand the Federal Commodities Distribution Program.\nC. Reduction of the purchase requirements for Food Stamps and,\nwhere necessary, provision of free stamps to welfare recipients.\nd. Consideration of providing food stamps in lieu of a portion\nof welfare payments, subject to the approval of the recipient.\nWELFARE REFORM (cont'd.)\nPage 2\ne. Transfer of the Food Stamp Program, programs under the\nSchool Lunch Act and the Commodity Distribution Program\nfrom the Department of Agriculture to the Department of\nHealth, Education, and Welfare.\nf. Expansion of federal, state and local programs to provide\nnutrition education.\nNational Governors' Conference\n61st Annual Meeting\nColorado Springs, Colorado\nAugust 31 - September 3, 1969\nlisters policy\nC. - 3.\nHEALTH\n1. Adoption by the federal government of a national universal health\ninsurance program coupled with hospital cost controls as the primary method\nof keeping rising health costs from preventing all people from receiving\nthe medical care they need. Such a program should utilize the existing\nprivate enterprise medical system. Publicly paid programs such as Medicaid\nshould be used only as a secondary program for those who have used up their\ninsurance benefits. Medicaid should be 100% federally financed.\n2. Adequate funding by the federal government of (a) the Federal Sup-\nplementary Food Program for low-income groups vulnerable to malnutrition to\nmake selected nutritious foods available to infants, pre-school children,\npregnant women and nursing mothers, and (b) programs to provide free or\nreduced-priced lunches and breakfasts through schools, summer recreational\nprograms, and daycare centers to assure all children from low-income families\none or two nutritious meals per day.\n3. Expansion of federal and state programs of grants and loan payments\nto encourage the development and rehabilitation of health facilities particu-\nlarly in low-income areas where maternal and child health care is inadequate.\n4. Review of the formula for the allocation of federal funds for the con-\nstruction and modernization of health facilities to assure that the funds are\nbeing devoted to meeting the Nation's most urgent needs.\n5. Assurance that the allocation within a state of federal funds for\nthe construction and modernization of the various types of health facilities\nbe based on priorities developed by the state and be in accordance with plans\ndeveloped through state comprehensive health planning.\n6. Placement of responsibility for comprehensive health planning in the\nOffice of the Assistant Secretary of Health and Scientific Affairs of the\nU. S. Department of Health, Education, and Welfare. Such a designation by\nthe Secretary of HEW would be complementary to the major responsibility and\nreliance placed on such efforts by Governors and enhance the possibilities\nof achieving a federal-state \"partnership\" for the improvement of health\nservices.\ntional Governors' Conference\n61st Annual Meeting\nColorado Springs, Colorado\nAugust 31 - September 3, 1969\nC. - 5.\nMANPOWER TRAINING AND DEVELOPMENT\n1. Enactment of federal legislation which would consolidate federal\nmanpower programs, provide for flexible funding of these programs, and\nenable the states to coordinate all manpower training and development\nactivities within a state.\n2. Review by Governors of the state administrative structure for\nmanpower programs to assure that each state has (a) an effective mechanism\nto develop a comprehensive statewide manpower plan and (b) an agency which\nhas the capability to administer a unified system of manpower services.\n3. Establishment of a national computerized job bank which would\nprovide information regarding available jobs and job applicants.\n4. Provision for systematic review and assessment of the effectiveness\nof manpower programs.\n5. Establishment of State Manpower Training Staffing Centers with\nfederal financial support to assure an adequate supply of trained personnel\nto plan and administer manpower programs.\n6. Increased efforts by states to work with private business to increase\njob opportunities for the disadvantaged. Specifically, Governors should work\nwith the National Alliance of Businessmen in the development of statewide\n\"Jobs\" program.\nC. action 5.\nMANPOWER TRAINING AND DEVELOPMENT\n1. Enactment of federal legislation which would consolidate\nfederal manpower programs, provide for flexible-funding-of-these\nprogramey-and-enable-the-etatee- block grants and delegate to\nthe states the authority necessary to plan and coordinate all\nmanpower training and development activities within a state.\n2. Review by Governors of the state administrative structure\nfor manpower programs to assure that each state has (a) an\neffective mechanism to develop a comprehensive statewide manpower\nplan and (b) an agency which has the capability to administer\nor contract for a unified system of manpower services.\n3. Establishment of a national computerized job bank which\nwould provide information regarding available jobs and job\napplicants.\nDELETE ORD Explanation: On the basis of today's technology,\nthis is not economically feasible. In addition, the\npracticability of considering the entire nation\nas a job market for the purpose of matching workers\nwith jobs should be seriously challenged.\nItems 4, 5, 6 - no changes.\nCalifornia comments June 11, 1970\nWelfare\nState of California\nHuman Relations Agency\nMemorandum\nTo\n:\nHonorable Ronald Reagan\nDate : August 10, 1970\nGovernor\nFile No.: 24:34\nAttn: James Crumpacker\nSubject: Press Briefing\nCabinet Secretary\nFrom :\nOffice of the Secretary\n1. Unruh said in a television interview Sunday that the welfare system is a mess,\nthat recipients who can work must be found, that we must insist on their\ndoing something and get them jobs. He said the State was without plans.\nSyd Kossen Sunday identified unemployment as a critical campaign issue.\nWatts unemployment is reported worse than in 1965 and general unemploy-\nment in California is up from 6 in June to 6.2 for July.\nI am glad that Mr. Unruh agrees with me that welfare is a mess, but I\nwould prefer that he help do something about it.\nThe Facts:\nAB 1360, administration supported welfare reform bill, provides for a public\nworks employment program to be established by the Department of Human\nResources Development. It would provide that all employable welfare\nrecipients be referred to the program or to the Work Incentive Program\nin those counties that have the latter.\nWhen the bill came to the Assembly floor for passage, Mr. Unruh was\nabsent on personal business. The bill was approved, however, and is now\nin the Senate. (A hearing was to start at 3:30 P.M. today.)\nThis may lead to a question whether in view of the State Social Welfare\nBoard's attack on the fraud provisions of AB 1360 the administration\nstill supports AB 1360.\nThe bill does have our strong support in general. We share the Board's\nview that the fraud provisions were weakened by Assembly amendments and\nare working with the author to correct this problem.\nThe subject may also lead to questions about the WIN \"cut\". We have not cut\nWIN. The current appropriation for training is the same as was spent last\nyear. We budgeted the same for training-connected expenses of the enrollees\nsuch as transportation. Later we found that actual expenditures for the\n-2-\ntraining-connected expense only exceeded the amount budgeted. One of the\nproblems was that individual counties had no way of relating their expenditures to\nthe total appropriation. To correct that, we have established an allocation system\nso that each county will know how much it can spend for this purpose. Meantime\nwe have instructed the counties to continue at their present levels while we analyze\nthe cause of the higher rate of spending and explore various possibilities of funding.\nThere have been no cuts in the training program.\nPerhaps because of his absences, Mr. Unruh seems unaware of other actions we\nhave taken.\nFor example, the State Department of Rehabilitation completed a survey of more\nthan 167, 000 welfare recipients and identified more than 20, 000 who are potentially\neligible for rehabilitation services. County welfare departments are now in the\nprocess of making formal referrals of these cases to the department. In the\nlast fiscal year the department rehabilitated more than 3, 600 welfare recipients\nfor a savings of about $3. 5 million in welfare costs.\nJust last week the Department of Human Resources Development announced a pilot\nprogram to pit state workers against private employment agencies in finding jobs\nfor welfare recipients. Both the welfare recipient and the taxpayer will be the\nwinners in this unusual contest and I don't see how anyone can lose. About 5, 000\nwelfare recipients will be involved in this test program.\nThere may be a question about CSEA opposition. The Governor should express\nconfidence in the State workers. This is not a slap at them. There is,\nunfortunately, more than enough persons on welfare to keep both the department\nand the private sector busy.\nAnother plan to find jobs is also getting underway. HRD is making a concerted\neffort to make employers aware of the problem and enlist their help in getting\npersons off the welfare rolls and on to payrolls.\nThey are using the slogan \"Give a hand up -- save a handout. 11 The Department\nisn't just sloganeering, however. We are asking employers to tell us what they\nneed. The Department will then try to motivate and train welfare recipients to\nfill the employer's need. That's a brand new approach.\nThe adjusted rate of unemployment was 6. 2 for July, up from 6.0 in June. The\nrise was associated with the slowing of the pace of the economy related to the\ncampaign against inflation.\nWe have taken steps to stimulate employment in California without increasing\ninflation. For instance, I have asked release of road-building funds. I have\nsigned legislation that, if approved by the voters, will permit a much-needed\nimprovement in local sewer system\nto help them win the fight against pollution\nand also help the construction industry. We have increased the interest on bonds -\nmaking them marketable - and continued the water project and others.\n-3-\nThe State won a partial victory in the long-hair case. The class action and the\nrestraining order were lifted. This means local office managers can continue\nto use their own discretion on paying UI benefits based on availability for\nwork. It should be emphasized that each manager makes his own decisions.\nAll UI determinations can be appealed.\n2. Prison Problems. I attach suggested responses for the basic questions that may\nbe anticipated. In addition, it should be noted that the administration approved\nand the department implemented a five-post coverage system that gives greater\nsecurity early this year in the Department of Corrections. Eighty-one new\npositions were authorized, 33 of them at Soledad.\nWALTER L. BARKDULL\nAssistant to the Secretary\nAttachment\nAUG 10 1970\nHUMAN RELATIONS AGENCY\nState of California\nMemorandum\nMr. Walter L. Barkdull\nTo:\nAssistant to the Secretary\nDate: August 10, 1970\nHuman Relations Agency\n915 Capitol Mall, Room 200\nFile No.:\nSacramento, California 95814\nSubject:\nFrom: Department of Corrections, Sacramento 95814\nHere are some possible subjects which may arise at the Governor's\nPress Conference and the comments we think would be appropriate.\nThis is in response to your request.\nCourtroom Security and Convicts\nThe procedures followed in individual courtrooms should\nremain the responsibility of the court and local law\nenforcement agencies. The Department of Corrections must\ncontinue to comply with requirements laid down in such\nmatters by the courts. While the tragic incident in\nSan Rafael involved inmates from San Quentin, the same\nsituation might well arise any time with defendants\nhoused in the local jail, that is, an armed accomplice\nentering the court and kidnapping hostages. Suggestions\nhave been made that all the courtrooms should initiate\nstrict security provisions for persons entering. Another\nsuggestion would involve the holding of court for inmates\nin the prisons themselves. Both suggestions involve\nlegal and monetary factors which should receive thorough\nstudy by local authorities.\nPrison Problems Generally\nThe current concern growing out of several violent inci-\ndents, comes at a time when the overall operation of the STATE\nprison in the entite correctional system is going along\nquite well. The prison return rate has dropped sharply\nffew}\nin the last five years. Prison intake is down consistent\nwith the aims and purposes of the Probation Subsidy Pro-\ngram. Innocuous offenders are being retained in the\ncommunity under the supervision and control of probation\nofficials. The state prison system is receiving a much\nhigher percentage of offenders who have been sent to\nprison for crimes of violence. Ten years ago, violent\noffenders made up only 33 percent of the state prison\npopulation. Today, the proportion is up to 46 percent.\nMr. Walter L. Barkdull\n- 2 -\nAugust 10, 1970\nGenerally speaking, prison operations and activities\nreflect similar situations in the free world. If there\nare racial problems in the free world, you can expect\nto find them in prison. Only, prison problems will be\nmore serious since they occur in a smaller, closed\nsociety and since prisons contain individuals who repre-\nsent the extremes of racial hostility in the world.\nIf there is an increase of violence in the general\nsociety, we might expect an increase in prison violence,\nespecially since non-violent offenders are being\nsystematically removed from the state prison picture.\nOur prison system, in the opinion of nearly all prison\nauthorities, is one of the nation's best. We place\ngreat emphasis on rehabilitative programming. There are\nacademic classes ranging from literacy courses through\ncollege. We teach 45 job skills. There is great emphasis\non group counseling. The prison industries program\nprovides practical work experience. The people who work\nin our prisons have a very difficult job. They must deal\nwith hostile, aggressive and maladjusted individuals try-\ning both to retain firm control on the one hand and also\nextend an opportunity through correctional programs for\noffenders to re-establish themselves as law-abiding\ncitizens.\nSpecial Investigations\nI believe that the investigation which is being conducted\nby local authorities into the terrible tragedy in Marin\nCounty may reveal security deficiencies or other factors\nwhich should be studied by those responsible for courtroom\nsecurity in other locations.\nWith respect to any suggestions concerning a general look\nat the state prison system, this is already being done\nunder the auspices of the Board of Corrections. The Board\nis looking at the entire criminal justice system in this\nstate since you can't really consider one phase without\ngetting involved in the problems experienced by other\nsegments. I do want to emphasize that our prison and\nparole operations are under constant scrutiny and are\nstaffed with experienced, dedicated professionals. There\nMr. Walter L. Barkdull\n- 3 -\nAugust 10, 1970\nare probably more experienced administrators and line\nemployees in the California Department of Corrections\nthan in any other similar department in the country.\nThey are our experts in dealing with the hard problems\nand challenges which face persons in the Corrections\nfield.\nL. M. STUTSMAN\nChief Deputy Director\nState of California\nHealth and Welfare Agency\nMemorandum\nTo\n:\nGovernor's Cabinet\nDate : December 9, 1970\nGovernor's Senior Staff\nVIA Lucian Vandegrift, Secretary\nHuman Relations Agency\nfile\nSubject: Welfare Summary\nSheet\nFrom : Department of Social Welfare 744 P Street, Sacramento 95814\nAt the end of December and every month thereafter, you will receive a\nwallet-sized monthly statistical summary of public assistance caseloads\nand expenditures published by the State Department of Social Welfare.\nThe front side of the summary sheet contains breakouts by public assistance\nprogram of caseloads and expenditures for the most recent month, for the\nmonth previous, and for the most recent month\" one year ago. The three\nmonths of data allow a monthly comparison and a twelve month comparison.\nAlso shown on the front side under the column \"payments\" are the average\nmonthly payments per recipient for the various programs.\nInformation on the reverse side of the sheet remains unchanged from month\nto month unless altered by State or Federal legislation or regulation. The\ndata relate to State, County, Federal cost sharing formulas for various\npublic assistance programs. Also listed are maximum grants allowed for the\ntypical case in various programs.\nIf either content or presentation of the information falls short of your\nneeds, please send me comments or suggestions for improvements.\nRoberthant Robert Martin\nDirector\nGOVERNOR'S CABINET\nJ. Earl Coke\nJames Hall\nVerne Orr\nNorman Livermore\nLucian Vandegrift\nGOVERNOR'S SENIOR STAFF\nEdwin Meese\nJames Crumpacker\nPaul Beck\nMichael Deaver\nNed Hutchinson\nAlex Sheriffs\nEdgar Gillenwaters\nHerbert Ellingwood\nRobert Keyes\nJerry Martin\nGeorge Steffes\nState of California\nHuman Relations Agency\nDepartment of Social Welfare\nResearch and Statistics\nPUBLIC ASSISTANCE CASELOADS AND EXPENDITURES\nNovember 23, 1970\nOctober 1970\nAid recipients & persons certified\nfor medical assistance only\nPayments\nProgram\nOct. p/\nSept.\nOct.\nOct.\nSept.\nP.\nOct.\n1970\n1970\n1969\n1970\n1970\n1969\nTOTAL\nGrand total, cash grant and\n2,263,745\n2,274,338\nmedical assistance\n1,840,688\n$\nNA\n$\nNA\n$197,098,695\nCash grant subsistance\n1,980,664\n1,942,710\n1,560,516\n141,763,258\n138,939,176\n113,206,066\nMed. assist. only\n179,673\n230,019\n211,344\nXXX\n***\nMedical assistance\n***\nxxx\nXXX\nXXX\nNA\nNA\nGeneral home relief\n80,723,049\n103,408\n101,609\n68,828\n4,089,654\n4,263,291\n3,169,580\nAverage\nAGED PERSONS\nCash grant subsistence\n319,302\n318,525\n311,944\n107.64\n106.98\n109.87\nMed. assist. only\n57,091\n60,704\n58,294\n***\nMedical assistance\n***\n***\n***\nXXX\nXXX\nNA\nNA\n73.52\nBLIND PERSONS (AB/APSB)\nCash grant subsistence\n13,947\n13,861\n13,170\n156.67\n154.75\nMed. assist. only\n151.12\n1,026\n1,040\n919\nMedical assistance\nXXX\nXXX\nxxx\n***\nXXX\n***\nNA\nNA\n77.40\nDISABLED PERSONS\nCash grant subsistence\n181,988\n179,821\n157,529\n127.86\n124.91\nMed. assist. only\n125.57\n15,168\n17,611\n15,345\nXXX\nMedical assistance\nXXX\nXXX\nxxx\nXXX\nXXX\nNA\nNA\n118.42\nFAMILIES WITH DEPENDENT CHILDREN\nCash grant subsistence:\nFamily groups:b/ children\n856,225\n839,064\n665,150\n76.13\n76.11\n69.87\ncases\n348,606\n341,085\n258,825\n186.98\n187.23\ntotal persons\n179.57\n1,196,716\n1,172,276\n917,419\n54.47\nUnemployed cases:children\n54.48\n50.66\n141,684\n136,602\n82,294\n74.45\n73.52\n68.85\ncases\n49,680\n46,543\n25,337\n212.33\ntotal persons\n215.78\n223.63\n234,802\n224,611\nBdg. Homes & Inst:children\n129,484\n44.93\n44.71\n43.76\n33,909\n33,616\nMedical assistance only:\n30,970\n153.55\n150.95\n133.27\nFamily groups:\ncases\n34,933\n47,967\ntotal persons\n41,977\nXXX\nXXX\nXXX\n96,824\n141,189\n8dg. Homes & Inst:children\n129,751\nXXX\nXXX\nXXX\n9,564\nMedical assistance:\n9,475\n7,035\nXXX\nXXX\nXXX\nFamily groups:\nXXX\nXXX\nBdg. Homes & Inst\n***\nNA\nNA\n24.51\nXXX\nXXX\nXXX\nNA\nNA\n23.59\nGENERAL HOME RELIEF\nTotal persons\n103,408\n101,609\n68,828\n39.55\n41.96\nFamily cases\n46.05\n16,285\n16,167\n9,952\n63.93\n67.08\n67.19\nPersons in family cases\n58,395\n61,158\n36,193\n17.83\n17.73\nOne-person cases\n18.48\n45,013\n40,451\n32,635\n67.72\n78.59\n76.63\nUnemployed in labor force (%)\n5.9\n5.8\n3.72\nXXX\nCivilian population (excluding\nXXX\nXXX\nmilitary)\n19,909,700\n19,881,200\n19,582,7002\nXXX\nXXX\nXXX\nMedical assistance averages based on persons in cases \"open\" during the month. Cash grant averages for adult\naids computed from \"net\" person counts. Excludes U cases Includes U cases Preliminary\nNA - Not available\nRevised January 13, 1970\nGRANT PARTICIPATION\nSHARING\nPROGRAM\nMAXIMUM GRANTS\nFEDERAL\nSTATE\nCOUNTY\nADULTS\nOAS\n$195.00\n50%\n6/7 Rmdr.\n1/7 Rmdr.\nAB\n202.00\n50%\n3/4 \"\n1/4 \"\nAPSB\n202.00\n-\n5/6 Grant\n1/6 Grant\nATD\nBased on Statewide\nAverage of $122.00 per\nmonth for Fiscal Year\n50%\n6/7 Rmdr. 1/7 Rmdr,\nCHILDREN\nMAXIMUM STATE BASIS\nNo.\nChildren\nI ER\n2 ER\nAFDC\nI\n$148\n$166\n50%\n67/- Rmdr. 32/2 Rmdr.\n2\n172\n191\n3\n221\n239\n4\n263\n282\n5\n300\n318\n6\n330\n349\n7\n355\n373\n8\n373\n392\n9\n386\n404\n10\n392\n411\n11\n399\n417\n12\n405\n424\n13\n412\n430\n14\n418\n437\n15\n424\n443\nPlus $6 for each additional AFDC child in FBU.\nAFDC-BHI\nFEDERAL BASIS\nFEDERAL SHARE\nSTATE BASIS\nSTATE SHARE\nCOUNTY SHARE\nFEDERAL\nThe average\n50% of the\n50% of the average\n671% of the\nAmount paid\nCHILDREN\namount paid\nfederal\npayment up to $100\nState Basis\nless federal\nbasis\nper child per month\nand state\nshares.\nNON-FEDERAL\nThe average payment\n6712 of the\nAmount paid\nCHILDREN\nup to $80 per child State Basis\nless state\nper month.\nshare.\nADMINISTRATIVE EXPENSE *\nFor costs of providing required and recommended services, 75% Federal - 25% County.\nOther costs, 50% Federal - 50% County.\nSTATE SUBVENTION\n$65 State for each new or reissued license up to cost of administration for each fiscal\nyear.\nADOPTION'S ADMINISTRATIVE EXPENSE\n100% State for budgeted costs.\nCHILD PROTECTIVE SERVICES *\nFederal 75% - County 25% (Funds limited to federal appropriation.)\n*\n85% and 15% for AFDC and CPS Services through June 30, 1969."
}