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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 Reportition\n(2 of 2)\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/\nSTATE OF CALIFORNIA-HEALTH AND WELFARE AGENCY\nRONALD REAGAN, Governor\nDEPARTMENT OF SOCIAL WELFARE, 2415 FIRST AVENUE\nSTATE SOCIAL WELFARE BOARD\nSACRAMENTO 95818\nCALIFORNIA\nMRS. ALEXANDER RIPLEY\nDR. WALTER W. DOLFINI\nCHARLES A. BOWERS\nJ. STEVE WILLIAMS,\nChairman\nJune 14, 1968\nARTHUR R. TIRADO\nSENATOR H. L. RICHARDSON\nSENATOR TOM CARRELL\nASSEMBLYMAN JOHN G. VENEMAN\nASSEMBLYMAN JOHN BURTON\nJACK W. THOMPSON, EXECUTIVE SECRETARY\nTO: SOCIAL WELFARE BOARD MEMBERS\nADVISORY COMMITTEE ON WELFARE ABUSE\nFROM: Jack W. Thompson, Executive Secretary\nRE: Report on Welfare Fraud - Third Draft\nAttached for your consideration is the third draft of the Board's\nreport on welfare fraud. The third draft is the result of the\nBoard's deliberations at the last meeting in San Francisco.\nThere has been considerable discussion about the method of signing\nthe report when it is in final form. Because of the turnover in\nBoard membership since the work began, it is felt that the current\nchairman should sign the transmittal letter to the Governor and\nthat the names and terms of all Board members having official status\nduring the course of the study should be listed in the body of the\nreport.\nIf you will be kind enough to review this draft it will be considered\nfor adoption at the next Board meeting.\nAttachment\nState Social Welfare Board\nReport on Welfare Fraud\nThird Draft\nCONF IDENTIAL\nJune 18, 1968\nSUGGESTED DRAFT OF TRANSMITTAL LETTER\nWELFARE FRAUD REPORT\nThe Honorable Ronald Reagan\nGovernor of California\nState Capitol\nSacramento, California 95814\nDear Governor Reagan:\nTransmitted herewith is the report of the State Social Welfare Board\non the subject of welfare fraud as requested in your charge to this\nBoard contained in your letter of July 11, 1967.\nThrough the use of public hearings the Board received written and\noral testimony on a variety of subjects related to welfare fraud and\nabuse. The transcripts of the hearings and the written testimony\nare available for reading by anyone interested.\nThe attached report includes a general discussion of the major points\ndeveloped in the hearings. A summary of our findings begins on page 25\nand our recommendations begin on page 27.\nOn the basis of the information developed in the inquiry, we believe\nthat welfare recipients are no more fraudulent than other humans.\nObviously, there is much crime in the United States that has not been\ndetected and, therefore, does not become a part of the percentages\nreported. In the same way that income tax evasion convictions do not\nreflect the number of people cheating on their income tax, convictions\nfor welfare fraud do not represent an authoritative measure of the\nextent of welfare fraud.\nThere are methods other than public hearings which could be used to\nmore accurately determine the extent of fraud in welfare caseloads.\nOne method would be the use of traveling audit groups nonoriented to\nsocial welfare but skilled in fraud detection. The audit teams could\nmake spot checks of recipients' files throughout the state. This\nwould be a very costly and time consuming operation which is not\nnecessarily recommended by us but is pointed out as a more accurate\nway of determining the extent of fraud than the use of public hearings.\nOur report places heavy emphasis on fraud prevention and makes specific\nreference to a five*point prevention program in the report summary on\npage 25.\nGovernor Reagan\n-2-\n(Date)\nThe Board wishes to express gratitude for the excellent cooperation\nreceived from members of the Advisory Committee on Welfare Abuse as\nwell as the many individuals who gave their time, knowledge and experi-\nence on this subject.\nWe believe that the recommendations contained in this report should be\nimplemented at the earliest possible date.\nRespectfully,\nSTATE SOCIAL WELFARE BOARD\nJ. Steve Williams\nChairman\nAttachment\nTABLE OF CONTENTS\nPage\n0\nThe Governor's Charge.\nI\nThe State Social Welfare Board\n3\nAdvisory Committee on Welfare Abuse.\n3\nStudy Plan\n4\nRoster of Witnesses,\n5\nDefinition of Fraud\n10\nForms of Fraud\n12\nDiscussion of Major Factors Related to Welfare Fraud\n.......\n13\nSummary\n25\nRecommendations\n27\nState of California\nGOVERNOR'S OFFICE\nSACRAMENTO 95814\nRONALD REAGAN\nGOVERNOR\nJuly 11, 1967\nMr. Nelson A. Howard, Chairman\nState Social Welfare Board\nDepartment of Social Welfare\n2415 First Avenue\nSacramento, California\nDear Chairman Howard:\nPlease consider this letter my formal charge to you and the members of the\nState Social Welfare Board, as you assume your duties as the advisory body\nto the Governor and the State Director of Social Welfare.\nThe principal public welfare concern to which I am now asking the Board to\naddress itself is the abuse of the public assistance program in California.\nWe are confronted with separate and distinct bodies of opinion as to the magni-\ntude of welfare cheating and abuse of the program. One opinion is that cheating\nis widespread among the 1, 200, 000 persons receiving cash subsistence grants\nin California. The other opinion is that there is only a minimal amount of\ncheating.\nAs long as this divisive disagreement exists, the public assistance program is\nhampered in fulfilling its necessary role of aiding the needy. Until the general\npublic is given the facts, and all of them, this disagreement will continue. Thus,\nto clear the air of this disagreement, I request that you accept the heavy responsi-\nbility of gathering the facts about fraud and welfare chiseling, to check out and\nweigh carefully the evidence and to report to me the full picture of the situation\nas you find it. I am sure there is no need to caution against giving weight to\nunsupported hearsay, rumors, claims and charges that cannot be documented.\nYou and I want no witch hunts. We need a thorough gathering and sifting of\nfactual evidence upon which valid conclusions can be based. I further ask that\nin this endeavor, you work closely with a standing committee which will be\ndesignated by the Administrator of the Health and Welfare Agency.\nYesterday, you attended the Governor's conference on the \"The Role of the\nLegal Profession in Public Welfare, If and I urge that you give due consideration\nMr. Nelson A. Howard, Chairman\n-2-\nJuly 11, 1967\nto the conclusions reached by the Conference as you prepare to assess the extent\nof fraud in public welfare.\nYou are authorized to hold such public hearings at various locations around the\nState to call witnesses and to do all other similar things necessary for a full\nand effective study of this matter. I will appreciate your advising me as to the\ndate that I may expect to receive your report.\nIn order for the Board to function as strongly and effectively as possible in its\nadvisory responsibilities to the State Director, John C. Montgomery, I have\nauthorized him to augment and broaden this charge from time to time during\nthe months ahead. It is Mr. Montgomery's concept and mine that the \"public\nforum\" role of the Board can be of great advisory value to him in carrying\nout his administrative authority and the policy decisions that are his responsi-\nbility.\nVery truly yours,\nRamer Regan\nRONALD REAGAN\nGovernor\n-2-\nTHE STATE SOCIAL WELFARE BOARD\nMr. J. Steve Williams, Chairman\nMrs. Estella Dooley\nSan Bernardino, California\nSan Francisco, California\n(5/10/67 - present)\n(5/5/67 - 3/14/68)\nMr. Nelson A. Howard, Chairman\nSenator H. L. Richardson\nPasadena, California\nPasadena, California\n(5/8/67 - 5/17/68)\n(9/18/67 - present)\nMr. Raymond E. Lee\nSenator Tom Carrell\nBeverly Hills, California\nSan Fernando, California\n(5/4/67 - 5/23/68)\n(5/12/67 - present)\nWalter W. Dolfini, M.D.\nAssemblyman John Veneman\nEureka, California\nModesto, California\n(5/4/67 - present)\n(5/12/67 - present)\nCol. Charles A. Bowers\nAssemblyman John Burton\nSacramento, California\nSan Francisco, California\n(3/14/68 - present)\n(9/8/67 - present)\nMrs. Alexander Ripley\nMr. Jack W. Thompson\nLos Angeles, California\nExecutive Secretary\n(5/8/67 - present)\nSacramento, California\n(2/19/68 - present)\nMr. Arthur R. Tirado\nFresno, California\n(5/11/67 - present)\nTHE ADVISORY COMMITTEE ON WELFARE ABUSE\nMr. Edwin C. Steckman\nMr. Leslie J. Pryde\nWelfare Investigator\nSupervisor - Butte County\nSan Diego County\nGridley, California\nSan Diego, California\nMr. John C. Montgomery\nMr. Granville C. Peoples\nEx-Officio Member\nDirector\nDirector\nOrange County Department of\nState Department of Social\nSocial Welfare\nWelfare\nSanta Ana, California\nSacramento, California\nMiss Mary M. O'Neill\nMr. James M. Shumway\nDeputy Director\nEx-Officio Member\nLos Angeles County Department of\nAssistant Administrator\nPublic Social Services\nHealth and Welfare Agency\nCity of Commerce, California\nSacramento, California\nMr. Louis P. Bergna, Esq.\nDistrict Attorney\nSanta Clara County\nSan Jose, California\n-3-\nSTUDY PLAN\nIn an attempt to gain authoritative insight into the subject of welfare fraud\nin California, this Board convened public hearings in five locations in the State as\nfollows:\nJanuary 12, 1968\nRedding, California\nJanuary 26, 1968\nSan Bernardino, California\nFebruary 3, 1968\nFresno, California\nFebruary 16, 1968\nSan Francisco, California\nMarch 1, 1968\nLos Angeles, California\nInvitations were extended via press releases, radio, television, letters,\nand personal contacts to individuals and agencies throughout the state to pre-\nsent evidence on the controversial subject of welfare fraud. In addition to those\nwho presented verbal testimony at the hearings, a significant number of people\nsubmitted written testimony but did not appear. Those who testified represented\nrecipient organizations, county welfare departments, district attorney's offices,\nsocial workers organizations, public legal foundations and schools of social work\nas well as individual recipients and other private citizens.\n-4-\nINDIVIDUALS WHO PRESENTED TESTIMONY AT HEARINGS\nMr. Harold Barnett, Northern Valley Chapter, National Association of Social\nWorkers, Redding, California\nMr. Oran Bollinger, Director, Imperial County Welfare Department, El Centro,\nCalifornia\nMr. Ronald Born, Director, San Francisco County Department of Social\nServices, San Francisco, California\nDr. Scott Briar, Associate Professor, School of Social Welfare, University\nof California, Berkeley, California\nDr. Thomas Brigham, Associate Professor of Sociology, School of Social\nWork, Fresno State College, Fresno, California\nCOUNTY\nMr. John Cartwright, Public Administrator, City of Fresno, Fresno,\nCalifornia\nMr. Reed Clegg, Director, Fresno County Department of Public Welfare,\nFresno, California\nMr. Lynn D. Compton, Chief Deputy District Attorney, Los Angeles County,\nLos Angeles, California\nMr. R. C. Currier, Los Angeles, California\nMr. William C. Daly, District Attorney, Fresno County, Fresno, California\nMiss Frances S. Engel, President, San Bernardino-Riverside Chapter,\nNational Association of Social Workers, San Bernardino, California\nMrs. Alice Escalante, Member, Committee for the Rights of the Disabled,\nLos Angeles, California\nDr. Frances Feldman, Associate Professor, School of Social Work, University\nof Southern California, Los Angeles, California\nMr. William F. Ferroggiaro, Jr., District Attorney, Humboldt County,\nEureka, California\nMr. Marvin Freedman, Assistant Director, Los Angeles County Department\nof Public Social Services, City of Commerce, California\nMr. Hilmi Fuad, Director, Tulare County Welfare Department, Visalia,\nCalifornia\nMrs. Cherie A. Gaines, Chief Attorney, Appeals Unit, Legal Aid Society\nof Alameda County, Oakland, California\nMr. L. Gibbons, Deputy District Attorney, Inyo County, Independence,\nCalifornia\n-5-\nINDIVIDUALS WHO PRESENTED TESTIMONY AT HEARINGS (Cont.)\nMrs. Susan Goodfellow, Local 535, Social Workers' Union of Alameda County,\nOakland, California\nMrs. Judi Graham, Yuba City, California\nMr. Louis Gray, Social Workers' Union #535, Santa Clara County, San Jose,\nCalifornia\nDr. Charles Guzzetta, Associate Professor, School of Social Work, San Diego\nState College, San Diego, California\nMr. Robert Hargrove, Deputy District Attorney, San Bernardino County\nSan Bernardino, California\nMrs. Bernice Holson, Eligibility Screener, Alameda County Welfare Department,\nUnion Representative, Local 535, Social Workers' Union of Alameda County,\nOakland, California\nDr. Donald S. Howard, School of Social Welfare, University of California\nat Los Angeles, Los Angeles, California\nMrs. Nancy A. Humphreys, Los Angeles Chapter, National Association of\nSocial Workers, Los Angeles, California\nMrs. Catherine Jermany, President, Los Angeles County Welfare Rights\nOrganization, Los Angeles, California\nMr. David C. Kelly, Director, Humboldt County Department of Public Welfare,\nEureka, California\nMrs. Helen Little, Chairman, Bay Area Welfare Rights Orgenization, San\nFrancisco, California\nMr. Cirilo Lopez, Welfare Recipient, Madera County Welfare Rights Organization,\nMadera, California\nMr. Roscoe Lyda, Director, San Berrardino County Welfare Department,\nSan Bernardino, California\nSister Rosemary Markham, Sisters of Social Service, Los Angeles, California\nMr. Henry Mesple, Director, Fresno City Farm Bureau, Fresno, California\nMr. John J. Morrill, Special Investigator, Shasta County Welfare Department,\nRedding, California\nMr. Myron Moskovitz, Directing Attorney, California Rural Legal Assistance,\nMarysville, California\nMr. Robert M. Nelson, Social Work Consultant, Project Headstart, Long Beach,\nCalifornia\n-6-\nINDIVIDUALS WHO PRESENTED TESTIMONY AT HEARINGS (Cont.)\nMr. J. Botello, Farm Worker, Yuba City, California\nMrs. Ollie Payne, Community Worker, El Centro Office, California Rural\nLegal Assistance, Brawley, California\nMr. Richard B. Peterson, Chief, Family Support Division, Fresno County\nDepartment of Public Welfare, Fresno, California\nMrs. Molly Piontkowski, Chairman, Committee for the Rights of the Disabled,\nLos Angeles, California\nMr. Peter C. Rank, Deputy District Attorney, Contra Costa County, Martinez,\nCalifornia\nProfessor Wallace N. Rich, School of Social Work, Fresno State College,\nFresno, California\nLt. Dwayne Smith, Bureau of Investigations, District Attorney's Office,\nLos Angeles County, Los Angeles, California\nMr. Lucian Vandegrift, District Attorney, Butte County, Oroville, California\nMrs. Esther Washington, President, San Bernardino Welfare Rights Organization,\nSan Bernardino, California\nMr. Albert L. Wells, Deputy District Attorney, San Diego County, San Diego,\nCalifornia\nMrs. Mabel G. Wells, ACSW, Fresno, California\nMrs. Atleary Williams, Welfare Rights Organization, Fresno, California\nMr. Norman Yates, Executive Director, Apartment Association of Inland\nEmpire, Inc., San Bernardino, California\n-7-\nTHOSE WHO SUBMITTED WRITTEN TESTIMONY BUT DID NOT APPEAR\nMrs. Kloh-Ann Amacher, Chairman, Public Social Services Commission of\nGolden Gate Chapter, National Association of Social Workers, Richmond,\nCalifornia\nMr. Steven Antler, Attorney, San Francisco Neighborhood Legal Assistance\nFoundation, San Francisco, California\nMr. Stephen Arian, Attorney, San Francisco Neighborhood Legal Assistance\nFoundation, San Francisco, California\nMr. Lloyd Breakey, Central California Chapter, National Association of\nSocial Workers, Fresno, California\nThe Honorable Willie Brown, Assemblyman, Eighteenth District, San Francisco,\nCalifornia\nMrs. Mary L. Charles, President, California Social Workers Organization,\nSanta Clara, California\nDr. Milton Chernin, Dean, School of Social Welfare, University of California,\nBerkeley, California\nMrs. Kathleen Dohner, Social Worker, San Francisco County Department of\nSocial Services, San Francisco, California\nMrs. Charlie Harris, United People Arriba Welfare Rights, Santa Clara,\nCalifornia\nMr. J. V. Henry, Madera Office, California Rural Legal Assistance, Madera,\nCalifornia\nMr. James Karls, Bay Area Council of Social Work Organization, San Francisco,\nCalifornia\nMosignor Roger Mahony, Director, Catholic Charities, Fresno, California\nMrs. Kristin Ockershauser, Legal Aid Foundation of Long Beach, Long Beach\nCalifornia\nMr. John T. O'Neill, Executive Vice President, California Apartment Association,\nAnaheim, California\nMr. Antonio Pacheco, Farm Worker, Yuba City, California\nMr. Norman Ribera, Fresno Realty Board, Fresno, California\nMr. Armando Rodriguez, Attorney, Madera Office, California Rural Legal\nAssistance, Madera, California\nMrs. Deloras Shaw, Hawailan Gardens Welfare Rights Organization, Hawaiian\nGardens, California\nMr. Keith Sorenson, District Attorney, San Mateo County, San Mateo, California\n-8-\nTHOSE WHO SUBMITTED WRITTEN TESTIMONY BUT DID NOT APPEAR (Cont.) )\nDr. Harry Specht, Associate Professor, School of Social Welfare, University\nof California, Berkeley, California and First Vice President, Golden Gate\nChapter, National Association of Social Workers\nMrs. Emilia Tellos, Community Worker, California Rural Legal Assistance,\nSanta Rosa, California\nMr. Charles Ward, Director, Del Norte County Department of Public Welfare,\nCrescent City, California\nPaul Weinberger, D.S.W., Associate Professor and Coordinator of Research,\nDepartment of Social Welfare, San Francisco State College, San Francisco,\nCalifornia\n-9-\nDEFINITION OF FRAUD\nIn the course of the hearings, and in the review of the written\ntestimony, there were encountered a variety of definitions of welfare\nfraud. We interpreted the Governor's Charge as being related to recipient\nfraud. For the purpose of this report the definition of welfare fraud\nas contained in Department of Social Welfare Bulletin #624 (Revised) will\nbe used. It is as follows:\nFraud by applicants for or recipients of public assistance exists\nwhen the applicant or recipient has:\n1. Knowingly and with intent to deceive or defraud, made a false\nstatement or representation to obtain aid, obtain a continuance\nor increase of aid, or avoid a reduction of aid.\n2. Knowingly and with intent to defraud, failed to disclose a fact,\nwhich, if disclosed, could have resulted in denial, reduction\nor discontinuance of aid.\n3. Accepted aid knowing he is not entitled thereto, or accepted\nany amount of aid knowing it is greater than the amount to\nwhich he is entitled.\n4. For the purpose of obtaining, continuing, or avoiding a reduc-\ntion or denial of aid, made statements which he did not know to\nbe true with reckless disregard of the truth.\nWhen aid is obtained by fraudulent means a crime is committed. The\nnumber of convictions for such crimes is not necessarily the measure of the\nextent. The evidence presented tended to establish that the percentage\nof convictions of welfare recipients for fraud reported in this state is\nrelatively small.\n-10-\nThe amount of suspected fraud presently reported to the research\nstatistical division of the State Department of Social Welfare is not\nnecessarily accurate. The existing levels of orientation and training\nmay limit the ability of the social worker to detect fraud.\n-11-\nFORMS OF FRAUD\nThere exists a variety of ways in which an individual may fail to\nreport a situation or event or so misrepresent these occurrences as to\nconstitute a suspicion of fraud. By far, the two most prevalent are\nunreported income and family composition. In Los Angeles County, for\nexample, the referrals to the district attorney's office for investigation\nrevealed that about 55% of these cases were for unreported income, about\n40% on the basis of family composition, most of these being an unreported\nman in the home, and about 5% miscellaneous.\nAside from unreported income and family composition, some of the\nother more frequently misrepresented factors are:\n1. Children Living Out of the Home\n2. Reconciliation with Husband\n3. Concealment of Husband\n4. Social Security, Unemployment and Disability Benefits\n5. Child Support Payments from an Absent Father\n6. Allowable Expenses\n7. Assets\n8. Residency\n9. Private Medical Benefits\n10. Use of Medical Card by Another Person\n-12-\nDISCUSSION OF MAJOR FACTORS RELATED TO WELFARE FRAUD\nIn the course of the inquiries, testimony was offered on a variety\nof factors directly or indirectly related to fraud in California welfare\nprograms. Much of this material was of a subjective nature. Some of the\nmajor points brought out in the testimony are outlined below.\nThe caseworker potentially is the single most important person in\nthe prevention of fraud on the part of the welfare applicant or recipient.\nIn spite of this potential, many caseworkers, because of their training,\nview themselves in an almost exclusive service role in relation to the\nrecipient. Some feel that enforcement of regulations should be the\nresponsibility of others.\nThe service-oriented caseworker and the recipient must realize that\neach has certain obligations and responsibilities. The caseworker has the\nresponsibility to become fully acquainted with all of the various aid\nprograms and their governing regulations, to obtain for the prospective\nrecipient the maximum amount of aid to which he is entitled (Sec. 10500\nWelfare and Institutions Code of the State of California) and to insure\nthat the recipient has a full understanding of the requirements and\nrestrictions imposed by regulations relating to that particular form\nof aid.\nThe recipient, on the other hand, must be made to understand the\nimportance of his meeting the terms of the restrictions and the serious\nconsequences that can result in the event of failure on his part. In\nthis connection, the caseworker must find the means to overcome language\nbarriers and resolve problems related to the recipients' ability to com-\nprehend this important information. This should not be viewed as a law\nenforcement function but rather as one of the basic goals of casework\nrelationship; that of encouraging individual responsibility on the part\nof the recipient.\n-13-\nFinally, however, the social worker must be mindful that he is a\nguardian of a public trust, that he must guard against misuse of public\nfunds and, in the face of a fraudulent situation should take steps to\ninsure an effective and prompt investigation and cooperate in the prosecu-\ntion of the case. From the standpoint of the social worker some relief\nfrom their varied role seems to be in sight. The State Department of\nSocial Welfare has provided for separation of the eligibility and case\nservice functions in the old age security category and is moving in that\ndirection in the other aids. As this separation is accomplished on a\nbroader basis, more time should be available for the social worker to\nprovide direct service to the recipient.\nMany counties are taking effective steps to free social workers for\nmore frequent and meaningful recipient contacts. This is an effort that\nshould be continued, encouraged and supported. As social workers are\nfreed from menial tasks and given more time to function in a capacity\nconsistent with their training and orientation, they may be better able\nto reduce the incidence of welfare fraud.\nAs a practical matter many conditions affect the ability of the\ncaseworker to carry out the responsibilities outlined above. Some of\nthose factors are set forth below.\nTurnover among public welfare department caseworkers amounts to\nan average of approximately 30% annually. Such staff turnover creates\nalmost insurmountable in-service training problems not to mention the\nextremely high cost of such training and the period of time when the new\ncaseworker is not productive. One authority estimated that it takes six\nmonths to a year for a new caseworker to become thoroughly familiar with\nthe basic rules and regulations of the particular program to which he is\n-14-\nassigned. Administrative changes resulting in the reassignment of case-\nworkers further complicate this problem. In Los Angeles County which has\nan average annual turnover of approximately 30% among its 3300 caseworkers\nover 76% of the social workers have less than two years' experience and\nover 41% have less than one year. The problem of orienting staff members\nand attempting to interpret the complex rules and regulations of the\nvarious welfare programs to the recipient is self evident.\nMany counties are making excellent progress in developing in-service\ntraining programs which underscore fraud prevention as an integral part\nof the casework relationship. The best of such programs involve the forma-\ntion of close consultative relationships with district attorneys' offices\ntaking full advantage of the techniques, training and experience within\nthe district attorneys' staff. Such training programs not only emphasize\nthe need for the caseworker to acquaint the recipient with his responsi-\nbilities but, also, trains the caseworker to be alert for the danger signals\nwhich, on investigation, often lead to recognition of some conflict between\nthe information in the record and the situation as it actually exists.\nThe early recognition of these danger signals and the resolution of the\nconflicts is a major step in an effective prevention program.\nAnother major factor related to the question of fraud is the ability\nof the recipient to comprehend the regulatory requirements for reporting\nsuch things as income and changes in family composition, assuming a thorough\nexplanation by the caseworker was given. There is ample evidence that\nwelfare regulations are quite complex and the present effort of the State\nDepartment of Social Welfare to simplify will have some positive effects,\nalthough many requirements result from federal mandates. Therefore, in\nspite of efforts to simplify, it is of vital importance that caseworkers\nexercise special care to interpret the recipient's responsibilities into\n-15-\nthe simplest and most easily understood form, as free as possible from\nadministrative terminology and language. The intent of the regulations\nshould be explained to further impress the recipient of the need for\nreporting changes that affect eligibility to the welfare department.\nOne of the many forms used in the AFDC application process is:\nABCDM 200 - Application for Public Social Services. On the back of this\nform there is a section entitled \"Important Notice to Public Assistance\nApplicants.\" This section is designed to alert the applicant to the\nnecessity for reporting income, sales of property, etc. No mention is\nmade of the need to report changes in family composition although, as\nreported by Los Angeles County, 40% of the referrals to the district\nattorney's various offices in that county stem from failure to report\nsuch changes.\nA greater emphasis placed on staff retention, in-service training,\ndevelopment of close consultative liaison with the district attorney's\noffice and more attention given to the recipient's understanding of his\nresponsibilities, along with the appropriate reminders and effective\nfollow-up, will result in an effective welfare fraud prevention program.\nIn addition, such a program would help to reduce the large number of\nsuspected fraud referrals resulting from agency omission and errors and\nfurther reduce the referral of cases in which there is a lack of intent\nto defraud. In recognition of the public trust shared by all individuals\nand agencies involved in welfare service and enforcement, those suspected\nfraud cases which remain should be promptly and effectively prosecuted.\nThe question of restitution, particularly in those cases where\nthere is no other income or property from which restitution can be made,\npresents some difficult problems. Under the present procedure, the grant\nis reduced, sometimes to zero, in order to offset the overpayment, so as\nto effect reimbursement for the overpayment as nearly as possible within\n-16-\na 60-day period. While there is need to restore the public funds promptly,\nthis restrictive procedure often leads to severe deprivation of minor\nchildren who are innocent victims. Experimentation in this area might well\nshow greater monetary return if spread over a longer period, thus avoiding\nthe harsh impact on members of the family who are not a party to the fraudu-\nlent act.\nAs another means of prevention and early detection of fraud, there was\ntestimony offered on the value of a central registry of welfare recipients.\nThroughout the hearings, the inadequacies of grants was pointed out\nas one of the major reasons for welfare fraud. It was stated that the\nstate's maximum participation base, in effect, resulted in a grant that\nwas actually less than the amount fixed by the state as the minimum sub-\nsistence level. When viewed in relation to the temptation to \"cut a\ncorner'' in order to relieve an extremely limited budget, there is probably\nsome validity to this concept. However valid this argument might be, the\nlimitations placed on the amount of grants, although a very real and press-\ning problem, is a matter that is outside the scope of this inquiry. This\nis an area in which the caseworker must put himself in a position to counsel\nthe recipient while guiding the recipient towards independence and a pro-\nductive life.\nTestimony revealed some questions related to the granting of special\nneeds and allowances in computing the monthly grant. Instances were cited\nin which the granting of such allowances ran contrary to the intent of\nthe regulations, producing a grant which was unrealistic.\nEvidence has been introduced which illustrates the problems encountered\nby many recipients in obtaining adequate housing within the grant allowance.\nFrom the standpoint of the property owner, however, this problem is reflected\nin terms of delinquent rental payments. Severe collection problems result\n-17-\nfor the landlord when the recipient moves due to the inability of the\nagency to provide information about the recipient's whereabouts because\nof the confidential nature of the case record. While in general it seems\ndesirable to maintain such confidentiality there seems no justification\nfor withholding information as to the whereabouts of the recipient who\nhas moved without paying for necessities furnished to him where funds were\nbudgeted for that purpose.\nThere are provisions in the law relating to the priority nature of\nclaims resulting from furnishing necessities of life. On the other hand,\nSection 10501 of the Welfare and Institutions Code of the State of California\nprovides that the manner in which the recipient shall spend the grant shall\nnot be dictated. Some balance must be struck between these two philosophies\nwhich affords the recipient the measure of independence enjoyed by the\naverage citizen and, at the same time, provides the landlord with the same\ndegree of protection that he enjoys in renting to a non-welfare recipient.\nBy lifting the confidential cover to enable the landlord to locate the\ntenant who has \"skipped\", he would have the same opportunity to recover\na judgment for delinquent rent as he would in any other landlord-tenant\nrelationship while maintaining the confidential nature of the case.\nAnother subject discussed in the hearings is the fact that some\nprosecutors issue press releases following a conviction in a case of\nwelfare fraud. The basis for this action is given as the deterrent effect\nthat such publicity has on other recipients who, technically, have the\npotential of defrauding the taxpayer. Others contend such publicity is\nharmful and degrading to recipients in general and that the alleged deterrent\neffect can not be substantiated.\nThe information contained in the Governor's Charge relating to the\nopposing views on the extent of welfare fraud was certainly borne out in\n-18-\nthe inquiries conducted by this Board. This is a highly controversial\nsubject, and these opposing views are contributing in a large measure to\nthe social stigma attached to welfare recipients and welfare programs.\nThe viewpoint of a large segment of the public is that welfare fraud is\nrampant, and in this context, virtually anyone who must in time of need\nturn to one of the aid programs is suspect. Those having such negative\nattitudes and suspicions should be made aware of the legislative intent of\nthe programs which is clearly set forth in Section 10500 of the Welfare\nand Institutions Code.\n\"10500. Every person administering aid under any public\nassistance program shall conduct himself with courtesy,\nconsideration, and respect toward applicants for and\nrecipients of aid under that program, and shall endeavor\nat all times to perform his duties in such manner as to\nsecure for every person the maximum amount of aid to\nwhich he is entitled, without attempting to elicit any in-\nformation not necessary to carry out the provisions of law\napplicable to the program, and without comment or criticism\nof any fact concerning applicants or recipients not directly\nrelated to the administration of the program.\"\nThe term welfare fraud was viewed almost universally as being synony-\nmous with the program of Aid to Families with Dependent Children (AFDC).\nA good deal more effort is placed on ferreting out possible fraudulent\nsituations in the AFDC program than in the other aid programs, and, as a\nmatter of fact, when a discrepancy is noted, the problem is usually resolved\nin a different manner, depending upon the nature of the aid program. Such\ndifferential treatment results from the differences in wording in chapters\nof the Welfare and Institutions Code on the subject of enforcement as\nrelated to the various aid categories.\nIn the AFDC program Sections 11482 provides that a person 11 who willfully\nand knowingly, with the intent to deceive, makes a false statement or\n-19-\nrepresentation or knowingly fails to disclose a material fact to obtain\naid, or who, knowing he is not entitled thereto, attempts to obtain aid\nor to continue to receive aid to which he is not entitled, is guilty of\na misdemeanor. Section 11483 provides that such a person shall\nmake restitution and all actions necessary to secure restitution may\nbe brought against him.\" The wording in Sections 13800 and 13801 in\nthe Aid to the Needy Disabled is similar. However, Sections 12250 and\n12850 which refer to the Old Age Security program, Aid to the Blind, and\nAid to the Potentially Self-supporting Blind contain the following\nqualifying paragraph:\n\"It is the intent of the Legislature that restitution should\nbe sought by request, civil action, or other suitable means\nprior to the bringing of a criminal action.\"\nTestimony reveals that as a practical matter these differences virtually\nrule out criminal prosecutions under these adult programs.\nThe differences noted above are reflected in Department of Social Welfare\nBulletin #624 entitled, \"Criteria for Referral of Cases to the District\nAttorney. 11 This section reads in part as follows:\n(OVER)\n-19a-\n'When reasonable grounds exist to suspect that fraud has\noccurred, the case shall be referred to the district\nattorney for further action.\n\"Exception: In OAS, APSB and AB, attempts to obtain\nrestitution by request, civil action, or other suitable\nmeans shall be used prior to referral, after which the\ncase shall be referred to the district attorney.\"\nThe Department of Social Welfare Recipient Fraud Report for the\nperiod January through March 1967 lists the number of suspected fraud\ncases referred to the special investigation units and to district attor-\nneys. Such referrals in the AFDC categories were approximately 17 times\ngreater than in the adult programs, while the AFDC caseload was less than\nhalf the adult caseload.\nMany persons testified that the true extent of fraud is not known,\nnor can it ever be determined. It was proposed that an \"acceptable\nalternative\" could be obtained by comparing convictions with caseload.\nSuch an approach is invalid since it is based on a faulty premise. The\nnumber of convictions do not take into account the many variables, such as:\n1. differences in interpretation of regulations;\n2. differences in application of regulations;\n3. fraudulent situations overlooked;\n4. cases of actual fraud lacking sufficient evidence to prosecute;\n5. absence of witnesses;\n6. cases of actual fraud resolved short of prosecution;\n7. statute of limitations;\n8. excessive caseloads of investigators;\n9. cases which are not referred and/or not prosecuted because of\nthe small amount involved.\nIn the course of the hearings, the Board was beseeched by a number of\nwitnesses to recommend the application of a cost-benefit approach to the\n-20-\ninvestigation and prosecution of suspected fraud cases, Under the cost-\nbenefit approach, the case of suspected fraud would not be carried through\nto its conclusion or beyond the point that the cost of investigation and\nprosecution exceeded the monetary benefits in the form of restitution which\ncould be expected to result from the full handling of the case. This is\nan unreasonable approach, since if applied to other criminal matters, it\nwould indicate that, for example, a bank robber should not be prosecuted\nunless the restitution justified the expense of prosecution and the necessary\ninvestigative process. Careful pre-referral screening to weed out those\ncases which do not, in fact, require more extensive and expensive field\ninvestigation will tend to reduce investigative and prosecuting costs.\nThe usual process by which a case of suspected fraud is handled from\nits inception to its ultimate disposition is as follows. Ordinarily, the\ntrained caseworker notes a conflict between information contained in the\ncase record and field observation. Information may also reach the case-\nworker by means of letters, telephone calls, or tips from neighbors,\nfriends, relatives, or occasionally, in the form of an anonymous communi-\ncation. Occasionally, such contacts are made directly with the district\nattorney's office which is free to initiate its own independent investiga-\ntion without having a formal referral from the county welfare department.\nUsually the county welfare department will be informed of the information\nreceived and the conduct of the investigation by the district attorney's\noffice, but in the past such referrals to that office from outside sources\nhave not been included in the statistical reports on fraud submitted to\nthe State Department of Social Welfare.\nThe caseworker receiving information or observing situations in con-\nflict with the case record will usually attempt to obtain clarification\n-21-\nfrom the recipient. Lacking sufficient clarification or encountering an\nuncooperative attitude on the part of the recipient will result in the\ncaseworker referring the matter to a special investigation unit within the\nwelfere department composed of staff trained in the preliminary Investiga-\ntion of such cases to determine if, in fact, there exists a basis for some\nformal action by the district attorney's office or if the conflict can be\nexplained in some other way.\nAssuming a strong indication of the existence of fraud based upon an\nomission or misrepresentation of facts or a failure to report certain\ninformation or events, the case will then be referred to the district\nattorney's office where a further investigation may ensue. Ultimately a\ndecision will be made as to the most appropriate course of action, depend-\ning upon the facts. At that point, the case may be returned to the county\nwelfare department if investigation reveals that a fraudulent act has not\nbeen committed or there is insufficient evidence to warrant prosecution.\nThe special investigation unit within the welfare department may then\nconduct a further investigation. Assuming the existence of a fraudulent\nact with supportive evidence, the district attorney may proceed to prose-\ncute as in any other criminal matter.\nIn the district attorney's processing of a case, it occasionally\nbecomes expedient to have an informal conference with the recipient involved\nin a case of suspected fraud. These are called citation hearings and are\nof value in helping the deputy district attorney understand all the facts\nrelating to the case. The results of the citation hearing may be a finding\nthat a fraud has not been committed, it may result in a confession, an\noffer of restitution, a reprimand, or the decision to proceed with the\nfiling of a formal complaint. Statistical information revealing the number\nof cases going to citation hearings do not make a distinction between those\n-22-\ncases in which no fraud has been found and the cases in which there is fraud\nand the problem is resolved other than through prosecution.\nThe activities of the county welfare departments, the special investiga-\ntion units and the district attorneys' offices with respect to the handling\nof suspected fraud cases is reported to the State Department of Social\nWelfare each month. This information is the subject of a quarterly report\nby the State Department of Social Welfare entitled \"Recipient Fraud Report.\"\nThere has been some criticism that the Recipient Fraud Report did not\nreflect the full scope of activity, particularly within the district attor-\nneys' offices, and that it did not take into account those cases in which\nthe district attorney received independent information directly from the\ncommunity on suspected fraud rather than through the usual channel from\nthe public welfare department. This statistical report, however, is com-\npiled from information gleaned from DPA Form 266.1 submitted each month\nand based on data from the county welfare departments and district attorneys'\noffices. Obviously, the quarterly statistical report from the State\nDepartment of Social Welfare is only as reliable as the input data, and\nthose who would take exception to the report should make certain that the\nmonthly report from the county reflects the true timely and accurate\npicture.\nThe reporting form has been amended to include a section wherein a\ndistrict attorney can report those cases in which he receives fraud tips\nfrom the community.\nThe Board heard testimony to the effect that increased staffing in\nlocal agency investigation sections would result in the ferreting out of\nadditional fraud. Various staffing standards were suggested.\n-23-\nThe fixing of staffing standards for county welfare department\ninvestigative units should be accomplished by the State Department of\nSocial Welfare in coordination with county agencies as a regulatory\nrequirement.\n-24-\nSUMMARY\nThe incidence of fraud convictions within California's welfare\nprograms is small in relation to the caseload. The comparison of fraud\nconvictions with caseload leaves much to be desired. The unanswerable\nquestion remains - how much undetected fraud exists?\nFraud can be reduced through increased public awareness and strengthened\npreventive measures including:\n1. better training liaison between caseworkers, investigators\nand district attorneys;\n2. improved orientation of caseworkers and recipients;\n3. increased awareness by caseworkers of their responsibi,lity\nto detect and report suspected fraud;\n4. adequate staff and reasonable caseloads for county welfare\ndepartment fraud investigating units and district attorneys\ninvestigators; and\n5. a firm and consistent prosecuting policy.\nEach individual concerned in any way with determining eligibility,\nproviding casework services to the recipient, conducting investigations,\nor prosecuting cases of fraud, as well as the administrators of the agencies\ninvolved, share a role as guardian of a public trust. Each has a vital part\nto play in promoting the effectiveness of the welfare system for the sake\nof the recipient and at the same time protecting the taxpayer.\nAll parties must guard against the utterance of careless and\nirresponsible statements for whatever motive and to clearly and accurately\ninterpret the facts related to welfare in an effort to correct the damaging\nmisconceptions that now exist.\n-25-\nThe administrators of welfare and enforcement agencies have a respon-\nsibility to provide the simplest and most efficient administrative and\nregulatory framework within which the caseworker and the enforcement staff\ncan function with primary emphasis being placed on the ability of the\nindividual to use his training and experience to the utmost.\nThe social worker must give full recognition to his diverse responsi-\nbilities. He must adequately equip himself with the knowledge necessary\nto insure that each recipient receives the maximum aid to which he is\nentitled and the service consistent with the recipient's needs in order to\neffect his return to productive and independent living at the earliest\ndate. He must insure in every case that the recipient has a full under-\nstanding of the need to report situations and events which affect his\ngrant and is prepared to assume the responsibility for doing so. The\nsocial worker must be constantly alert for evidence of misuse of funds\nand misrepresentation of situations and events. When these are encountered,\nthe social worker must give full cooperation in the investigation and\npossible prosecution of the case. In this context, his role embodies the\nelements of prevention and reporting. Neither responsibility is in conflict\nwith his helping role in relation to the recipient IN THE SAME SENSE THAT A POLICE OFFICER\nHAS A DUTY TO PROTECT CITIZENS BUT APPREHENDS CITIZENS WHEN THEY BREAK THE LAW.\nThe investigative and prosecuting staffs must act promptly, effectively\nand with full recognition given to the rights of the individual. When all\npreventive measures have been taken, there will still exist some cases of\nwilful and intentional fraud and these should be prosecuted to the fullest\nextent of the law for the protection of the public as well as the vast\nmajority of recipients on whom the gnawing suspicion of fraud by the mis-\ninformed has a devastating impact.\n-26-\nRECOMMENDATIONS\nTHE FOLLOWING RECOMMENDATIONS RELATE TO THE POINTS DEVELOPED IN\nTHE TEXT OF THIS REPORT AND/OR TO THE TESTIMONY\n1. Greater emphasis should be placed on the social worker's role in\npreventing fraud. This role should be accepted by the profession\nas an important aspect of casework service to the recipient.\n2. A careful and periodic examination of the duties of social workers\nshould be accomplished in order to avoid clerical and menial tasks\nand to take full advantage of their time, training and experience\nin the casework relationship including fraud prevention.\n3. Close liaison should be developed between public welfare departments\nand district attorneys' offices for the purpose of adding depth and\nemphasis to orientation of new staff and in-service training for\nother staff in relation to welfare fraud. State Department of Social\nWelfare Bulletin #624 (Revised) should be regularly reviewed by the\nstaff and special investigations unit in each welfare department and\nTraining Aid #21 parts a and b relating to recipient fraud should be\nfully utilized.\n4. Unannounced home visits by a social worker on any weekday during\nnormal duty hours should be encouraged. This is not seen as an\ninvasion of the recipient's right to privacy.\n5. Greater emphasis should be placed on the recipient's need for special\nhelp in understanding his responsibilities under the program. Special\nattention needs to be given to the language barriers, intellectual and\neducational deficiencies and to those having emotional problems.\n6. A concerted and continuing effort should be made by each county to\nencourage recipients to report in detail instances of over-charging\n-27-\nor other unethical practices by vendors in connection with the use\nof public funds, and these allegations should be vigorously pursued\nby the county.\n7. Regulations concerning the confidentiality of records should be\namended to the extent that vendors furnishing necessities of life\nshould have access to information concerning the whereabouts of\nthe recipient in the event of non-payment of the account after pro-\nviding the welfare department with the facts substantiating such\nclaim. This would provide the vendor with the same protection he\nenjoys in selling to the general public, and at the same time the\nconfidential nature of the remainder of the case record would be\nprotected.\n8. The back of each grant check, while not revealing the nature of the\npayment, should contain a certification to be signed by the recipient\nwhich states there has been no unreported change in his eligibility\nstatus, similar to releases printed on the back of insurance checks.\n9. An effort should be made to negotiate modifications in federal\nrequirements relating to adjustments of grant overpayments. This\nshould be reflected in more simplified and consistent state regula-\ntions and, in particular, the extension of the present 60-day grant\nadjustment period within which overpayments may be recovered. Such\nextension will result in greater monetary return and less severe\ndeprivation.\n10. Present policy calls for the granting of aid to be based on need,\nalthough in a case of proven fraud, there may exist a liability for\nthe repayment of aid fraudulently received. This policy should be\namended to provide for a grant reduction over whatever period is\n-28-\nrequired to effect full restitution or, perhaps, controlled payments\nfor the benefit of the children while removing control of the cash\ngrant from the hands of the defrauding parent.\n11. In computing overpayments resulting from understatement of or\nfailure to report income, deductions for the standard allowance for\nincidentals, travel, babysitting, uniforms, etc., related to the\nincome not reported should not be allowed in determining the amount\nof overpayment, thus providing an incentive to abide by the regulations.\n12. There should be a careful re-evaluation of the intent and philosophy\nrelated to the granting of special needs and allowances. Allowances\nshould be made only in those cases demonstrating true and realistic\nneed.\nCONTINUE TO SEEK THROUGH\n13. The State Department of Social Welfare should A through administrative\nSIMPLIFICATIONOF\nand legislative action, continue its current program of simplifying\nATION\nSHOULD CONTINUE TO REMOVE\nregulations, standardizing eligibility requirements, and removing as\nmuch detail from published regulations as possible.\n14. The State Department of Social Welfare should re-evaluate the practical\nusefulness of the Recipient Fraud Report now utilized. The factors to\nbe included should be carefully analyzed in the light of its purpose.\n15. The text on the back of form ABCDM 200 entitled \"Important Notice to\nPublic Assistance Applicants\", should be changed to include the warn-\ning that changes in family composition should also be reported to the\ncounty welfare departments as has been done on Form CA-201.\n16. The state and each county should have a carefully constructed workable\nplan designed to inform and educate the general public on the various\naid programs and the people they are helping and the needs they are\nTO SEE THAT ONLY\ndesigned to meet. Extreme care must be used in releasing true and\naccurate program statementsx ARE RELEASED,\n-29-\n17. The establishment of an automated centralized state registry containing\ninformation on all welfare recipients. Such register would serve a\npurpose similar to the central register of parents who have deserted\nCALIFORNIA\nor abandoned their children, as described in Section 11478.5 Welfare\nand Institutions Code, enacted in 1967. The purpose of such a registry\nwould be to provide a source of information enabling detection of\nthose recipients who apply and receive aid in more than one county at\nthe same time. Other precedence for such a centralized registry are\nthose utilized by Unemployment Insurance, the Department of Motor\nVehicles and the Social Security Administration.\n18. Legislation should be enacted to promote consistency in the identifi-\ncation, investigation, and vigorous prosecution of suspected fraud\nin all categories of aid.\n19. Efforts should be made to reduce the number of unnecessary fraud\nreferrals to district attorneys' offices. A suggested method would\nbe by pre-referrai screening by a deputy district attorney prior to\nthe time the caseworker prepares formal referral formsx TO AVOID TIME CONSUMING PAPERWORK\n20. The State Department of Social Welfare, together with appropriate\nlocal agencies, should undertake a study to determine what is a\nreasonable caseload level for thorough and effective fraud investi-\ngations. Thereafter, the department should fix standards to insure\nadequate efforts to detect and investigate fraud.\n-30-\nHUMAN RELATIONS AGENCY\nFOR IMMEDIATE RELEASE\nSacramento, California\nContact:  Spencer Williams\nOctober 4, 1968\nThe following is the text of a letter from Human Relations Secretary\nSpencer Williams to Governor Ronald Reagan in connection with the issuance of a\nreport by the State Social Welfare Board on welfare fraud:\n\"I have carefully reviewed the State Social Welfare Board's report\non welfare fraud which I have transmitted to you. The opinion contained in the\nreport that the true extent of welfare fraud in California has never been\naccurately determined is a concern I share with the Board. It is imperative that\nwe find out.\n\"I therefore recommend that appropriate steps--both administrative\nand legislative--be taken to:\na) determine the extent of welfare fraud in this State;\nb) identify individuals suspected of fraud; and,\nc) continue to encourage prosecution of these violators by the\ndistrict attorneys in the counties where the frauds are found to be committed.\n\"Some of the procedures contained in this report, which I believe\nare necessary to accomplish these objectives, can be achieved by administrative\naction. Others will require state and federal legislation. Some will require\nappropriations.\n\"Among the steps listed in the report with which I concur are:\n*\nEstablishment of traveling audit teams skilled in fraud\ndetection to help determine the true extent of welfare fraud in\nCalifornia.\n*\nDevelopment of an automated, centralized registry of all welfare\nrecipients. The registry would immediately detect persons who\nreceived aid in two or more counties at the same time.\n*\nThe negotiation of changes in existing federal guidelines so that\na protective payment plan can be developed for children of\nfraudulent welfare payment recipients.\n*\nStepped-up administrative action and legislative proposals by the\nState Department of Social Welfare to simplify regulations,\nstandardize eligibility requirements and remove as much detail\nas possible from published regulations.\n-2-\n* Greater emphasis on the social worker's role in preventing fraud\nby advising individuals on welfare of the necessity of filing\naccurate claims and immediately reporting any changes in their\nstatus which would affect the amount of payments to which they\nare legally entitled.\n\"Through the implementation of these and other steps which may be\nrequired, I believe we can better carry out this administration's commitment to\nthe people of California that those truly in need will receive the assistance to\nwhich they are legally entitled and those cheating the taxpayers by committing\nwelfare fraud will be detected and prosecuted under the laws of this State.\"\nHH\nHUMAN RELATIONS AGENCY\nFOR RELEASE SUNDAY 'S,\nSacramento, California\nNovember 24\nContact: Spencer Williams\nNovember 22, 1968\n(Please guard against premature\nrelease)\nSpencer Williams, secretary for Human Relations, announced today\n(Monday, November 25)\nhe will file a strong, formal protest tomorrow/against a \"dying gasp\"\nfederal regulation which would change the way welfare eligibility is\ndetermined.\nWilliams said he plans to deliver the protest in person to U.S.\nSecretary of Health, Education and Welfare Wilbur Cohen in Washington.\nThe protest will also be filed with President Johnson and President-\nelect Nixon.\n\"I hope this action will dispel any misunderstanding which may\nnow exist concerning the posture of the Reagan administration toward the\nproposed federal regulations,\" he said.\nOn November 20 Cohen promulgated a new regulation replacing the\npresent comprehensive system of eligibility determination and\ninvestigative procedures on July 1 with a \"simple statement of need.\"\nWilliams said his protest \"will include opposition not only to\nthe date for implementation of the new regulations, but also the\nrestrictions imposed on checking eligibility for aid. In addition,\nthe administration will insist that no regulations be adopted until\nprocedures can be developed and tested before their implementation is\nrequired.\n\"We believe that a thorough check of eligibility is essential\nto businesslike management of this program,\" Williams said. \"Our\neffort is to tighten up welfare administration, not relax it.\n\"The federal government should not restrict states' authority\nto determine how and when they investigate applications for aid.\n\"This administration's own pioneering work in reducing red tape\nand cutting staff time through use of the 'statement of need' to\ndetermine eligibility for the old age security program took two years\nof development, testing and installation in California's 58 counties.\n\"In view of differences in caseload, mobility and duration of\neligibility, there is no reason to assume that this procedure can be\neffectively used in the family program.\n\"Furthermore, ordering into effect a new procedure within only\nseven months--a procedure that applies to more than 1 million Californ-\nians is totally unrealistic and would surely result in utter chaos.\n\"This dying gasp order was rushed through without even waiting\nfor the recommendations of the advisory board set up for that purpose,\"\nWilliams said.\n# # #\n(Williams will depart Sacramento Sunday, November 24, at 8:55 a.m.\naboard United Air Lines Flight #918.)\nHUMAN RELATIONS AGENCY\nFOR IMMEDIATE RELEASE\nSacramento, California\nContact: Spencer Williams\nNovember 26, 1968\nSpencer Williams said he would formally protest today two additional\n\"11th hour\" changes in Federal regulations further liberalizing welfare\neligibility and increasing costs.\nWilliams, Secretary of the Human Relations Agency, was scheduled to\nmeet late today in Washington with Wilbur Cohen, U. S. Secretary of Health,\nEducation and Welfare, to protest a regulation adopted November 20 replacing\nthe present comprehensive system of investigative procedures in welfare\ndetermination with a simple statement of need.\nWilliams said that although the Federal Agency had failed to notify\nthe State Agency responsible, he had learned that regulations also are being\nadopted requiring continuation of aid during hearings to determine welfare\neligibility and calling for legal counsel to be provided to recipients during\nthe hearings at government expense.\n\"Mr. Cohen's adoption of untested regulations making major program\nchanges in the 11th hour of an outgoing Administration is unprecedented,\"\nWilliams said, \"He has not even gone through the normal channels of review\nin his haste to initiate new policies that should await consideration by the\nincoming Administration.\n\"Current welfare problems can only be compounded by the precipitous\nadoption of vague, ill-defined regulations that make major changes without\nadequate study of either program of fiscal effects,\" Williams added.\n\"Requiring payment of aid to persons awaiting a hearing on their\neligibility will not only result in payments to persons clearly not qualified,\nit could require payments to persons deliberately defrauding the program,\"\nWilliams said.\n\"Existing procedures insure that no person goes without the basic\nnecessities while awaiting the hearing decision,\" he noted. \"Payments made to\npersons later ruled ineligible will be virtually impossible and costly to\nrecover.\n\"The hearings are now conducted by skilled referees who afford the\nutmost protection to the rights of the appellants,\" Williams said. \"There\nhas been no demonstration that providing counsel in every case will improve\nthe procedures.\"\n-2-\nWilliams said the proposed additional Federal regulations would\n\"add substantially to state and county costs.\" He said he was not able to\nprovide a cost estimate on such short notice. However, he said, there are now\nabout 5,500 hearings a year of which about 65 percent sustain the original\nadministrative decision of the county.\nWilliams had announced Sunday his intention to personally protest\nthe regulation adopting the declaration of need. He said it preempted State\nauthority to determine how and when to investigate applications for aid and\nthat it assumed without adequate evidence that procedures in one class of aid\ncould be applied to all others despite significant differences. Williams\nalso said that the seven months allowed for implementation was grossly\ninadequate.\n####\nWelfare\nHUMAN RELATIONS AGENCY\nFOR IMMEDIATE RELEASE\nSacramento, California\nContact: Spencer Williams\nApril 21, 1969\nThe following statement was issued today by Spencer Williams, Secretary\nof the Human Relations Agency:\n\"I am gravely concerned by the decision of the United States Supreme Court\ntoday invalidating residency requirements for welfare recipients, even\nthough California's appeal technically is still pending at this time and\nthere remains some possibility our residency requirements, already stricken\nby a lower court, may yet be upheld.\nThe action of the court provides a bonus for those states which fail to meet\ntheir obligations at the expense of the California taxpayers and the other\nstates that do.\nFor one thing, the decision vents the internal pressures that might have forced th\nthe backward states to meet their responsibilities and actually encourages\nthem to lower their already inadequate aid payments in hopes their poor will\nsimply move out.\nBy its decision, the court encourages welfare recipients to shop for the best\ndeal. Already there are indications persons are moving to California solely\nto obtain higher welfare payments.\nInstead of encouraging State and local solutions of social problems, the\ndecision tends to force the states to turn to Washington for answers. Mean-\ntime, California taxpayers suffer a serious additional fiscal burden.\nThis State has been enjoined from enforcing residency requirements in effect\nfor 30 years with congressional approval since April 1968 by a Federal Court\nOrder despite our immediate appeal to the United States Supreme Court. As a\nresult, 3,000 to 4,000 additional persons have been added to our welfare rolls\neach month at a cost of $26 million this fiscal year and an estimated $35\nmillion next fiscal year.\"\n###\nweifare\nHuman Relations Agency\nof California\nemorandum\nDate\n:\nTo :\nThe Honorable Ronald Reagan\nm\nAugust 6, 1969\nGovernor of California\nFile No.:\nSubject:\nContinuation of\nWelfare Report\nFrom : Office of the Secretary\nThe following material is forwarded for use in connection with\nthe continuation of the Welfare Reporton Friday.\nThese include:\n1. The list of possible cost reduction areas indicating\nthe law or regulation which controls.\n2. A summary in outline form of John Montgomery's presen-\ntation (14 pages) and,\n3. A list of some typical questions which may come to\nmind.\nIt is urged that you review this material and have your own questions\nready so that we can go directly into the question and answer period\nwith a minimum of presentation.\nThe full text of Mr. Montgomery's comments of July 28th have been\nreproduced and can be readily supplied upon request.\nSPENCER WILLIAMS\nSecretary\nAttachments\nOUTLINE SUMMARY OF PRESENTATION TO CABINET\nby\nJohn C. Montgomery, Director of Social Welfare\nJuly 28, 1969\nI\nIntroduction\nA. Governor Reagan's Welfare Program Objectives\nThe Governor's welfare goals, as expressed in campaign statements, speeches,\nState of the State Messages and legislative programs, reveal his determination\nto bring costs under control while at the same time assuring adequate aid and\nservice for the truly needy.\nThe specific programs to accomplish these goals may be divided in two general\nareas -- substantive and administrative.\nThe Governor's basic approach in securing substantive changes would separate\nthe welfare group in two categories:\n-\nLife Protection as the guiding purpose with respect to those adults who\nbecause of age or handicap must be considered permanently dependent.\n-\nLife Peparation as the guiding purpose with respect to the more than\n741,000 children who are future producers and those present adults who\nare potentially self-sufficient.\nHis goals in improving the administration of existing welfare programs are:\n-\nSubjecting all programs to critical review and analysis to identify\nwhere they can be tightened and improved through administrative action,\nand where changes in law are required.\n-\nIncreasing the employability of welfare recipients so they can move\nfrom aid rolls to payrolls.\n-2-\n-\nBringing welfare administration closer to the people by returning as\nmuch control as possible to counties for welfare operations, and by\nincreasing volunteer and citizen participation in these programs.\n- Streamlining welfare administration and making it a more efficient and\neconomical operation.\nII\nMajor Concerns About Welfare Programs\nA. Continually rising caseloads and costs, despite decreasing unemployment;\nresulting fiscal crisis at both State and county levels\n1. From 1966-67 to 1969-70, recipient population will increase by approximately\n418,000 or 37.31 percent (average 12.44% per year). During the same period\nexpenditures for assistance payments are expected to increase by $447.2\nmillion or 49.63 percent (16.54% per year).\n2. From March 1967 to March 1969 California's AFDC caseload increased 41.6 per-\ncent, slightly above national average of 37.3 percent but below such states\nas New York, Pennsylvania, New Jersey, Massachusetts and Georgia.\n3. Distribution of caseload and related expenditures estimated for California\nthis fiscal year (1969-70). See Pie Chart. (Chart does not include\nAFDC-BHI; 32,100 children; cost $49,305,600)\n4. Action Taken\na. Tightened ATD disability criteria - From January 1967 to April 1968\nATD caseload increased 1.5 percent per month. In April 1968\ntightened disability criteria. This slowed increase rate to 1.2 per-\ncent per month by November 1968. Then began planned addition to\n-3-\ncaseload of MR patients in state hospitals to claim federal funds for\ncost of hospital care. $12 million being claimed annually now -\n$16.8 million when complete. This more than countered effect of\ntightened criteria. Increase rate from November 1968, 2.1 percent\nper month.\nb. Closed-end appropriation some adult cases - Payments to adult re-\ncipients requiring protected living arrangements or services of\nanother person under same fund control as in Medi-Cal through SB 999\nenacted and signed by Governor.\nc. Blocked further liberalization of welfare laws - Up to 1967, con-\nstant acceleration of welfare cost increases through legislative\nliberalization. This momentum halted.\nB. Constraints and fiscal impact of Federal law and rules\n1. Almost $25 million added to State and county costs 69-70 by Congressional\nor HEW action since 12-31-67 (not including court actions). AFDC Freeze\nrepeal avoided additional $23.1 million.\n2. Leadership at national level got support other states in challenging\nFederal requirements.\na. Some successes:\n- Retention for additional period of major part of 75 percent re-\nimbursement for integrated caseloads instead of dropping to\n60 percent (great benefit to counties).\n- Extension of timetable for use of simplified methods of eligibility\nand providing for testing period.\n- Requirements to continue aid pending fair hearing decision and\n-4-\nlegal services in appeals being postponed to 7-1-70 from 10-1-69\n(announcement expected soon).\nb. Still pushing on such items as:\n-\nRequirement that simplified methods be in effect April 1, 1970,\nfor AFDC.\n- Requirement that gross earnings be used in income exemption\npolicy. Should be net. Difference to California about $5 million\nState/county.\n3. Provisions of PL 90-248 remain critical to California such as:\na. Exemption of earned income in AFDC on open-ended basis. (Decision\nMemo 7-14-69 - Senator Murphy)\n(1) Committed to principle aid policies must provide incentive of\nmonetary gain in relation to work.\n(2) Congress went too far. Law results in some few families\nbeing able to remain on aid with large gross incomes.\n(3) Should be gradual reduction percent of earnings exempted plus\ncut-off point.\nb. Eligibility restrictions - AFDC-U\n(1) Under California law must continue aid to nonfederally eligible\ncases - locked in. Administration bill (SB 1335) to bring\nCalifornia program in line Federal definition opposed by\ncounties - held in Senate Finance Committee.\n(2) Provisions prior to PL 90-248 should be restored so States can\ndefine \"unemployment\" under program.\n-5-\nC.\nConcern that welfare programs may be sowing the seeds of future dependency\n1. Widespread impression welfare system manufactures its clientele. Fact\nis the rising size and cost of welfare reflects a failure of other\nsystems to do their job in society, specifically in the family group\nprograms. A common denominator is lack of education and lack of skills\nto obtain and hold a job in today's economy. These are specifically\nillustrated by such factors as:\n-\nThe continuing migration from rural to urban areas of thousands\nof people, many of whom never had a chance for a minimum, let\nalone adequate education.\n-\nAn advanced technology under which more and more of the jobs which\nare created require high level skill and competence leaving an\nincreasing number of people behind.\n-\nThe failure of the educational system to develop the maximum\ncapacities of the individuals it serves and to focus its efforts\non the needs of the labor market.\n- The weakening of family ties and sense of family solidarity and\nresponsibility associated with the extreme mobility of our popu-\nlation, and the trend toward the self-contained single unit family\ncomposed of mother, father, and children.\nFactors in increasing size of our aged and disabled group are:\n-\nThe steady increase in the length of life, with the r esult that\neven those who have been able to save something for their old age\nare more and more outliving their resources.\n-\nThe miracles of modern medicine which are extending the life of the\nseverally disabled who previously would have succumbed to illness\nat an earlier age.\n-6-\n2. To the extent needy children do not get the start in life they must\nhave to become responsible and productive adults, adequately prepared\nfor the world of work, are in danger of sowing seeds of future dependency.\na. Hope of preventing dependency rests on ability to give them this start.\nb. This is basis for concern that more than 418,000 children - 53 percent\nof the State's needy children do not have basic needs met. Most\nseriously disadvantaged are the more than 416,000 living in families,\nmostly headed by women, with no outside source of income and little\nor no present capacity to produce any. Maximum statutory payment\nmeets only 88.8 percent of basic needs.\nD. Concern about the effect of welfare programs on the Incentive to Work\n1. Vast majority recipients want to work\na. 46,600 now working part or full time. If all lost jobs tomorrow\nwould mean about $5.2 million in additional costs per month or\n$62.4 million annually.\nb. Jobs and job training the key demands heard in direct meetings with\nrecipients.\n2. For minority who would shirk responsibilities - tougher sanctions for\nrefusal of work or training without good cause.\na. Congress in PL 90-248 limited sanctions in WIN to vendor payments\nfor family after taking person who refused work out of budget.\nb. Until recently Feds gave impression this applied across board. We\nnow hold it applies only to recipients referred to WIN.\nc. For all others have adopted regulations to cut off at pockets if\nrefuse work or training without good cause.\nd. Pushing Feds to apply this to WIN referrals not in active training\nstatus.\n-7-\n3. Greatest number of potential employables are mothers, thus expanding\navailability of child care services merits high priority.\na. Concentrating attention in ghettos and farm labor camps.\nb. Cooperative arrangements with Education, State OEO, etc.\nC. Getting favorable response on Spencer Williams' letter to Councils of\nChurches on use of their facilities for child care. These being\nfollowed in cooperation with county welfare departments.\nd. State bears portion of nonfederal share of child care costs only for\nWIN participants. For all others, counties or private sources must\ncover.\n4. Further consequence federal restriction on AFDC-U -- nonfederally eligible\nrecipients not served by WIN. To cover gap am planning to require counties\nto provide work training program for 6,900 such cases effective 10-1-69.\nCounties oppose and are appealing to Governor.\nE. Welfare Fraud\n1. State Social Welfare Board study defined nature of welfare fraud and\nprovided base for Fraud Incidence Study now underway in cooperation with\nCalifornia District Attorney's Association. Representative sample of\nAFDC caseload being investigated by traveling task forces of district\nattorney investigators, independent auditors and welfare administrators.\nFindings available December 1969 to provide basis administrative action\nand possible legislative proposals.\n2. Cooperative arrangements being completed with Employment and county\nwelfare departments for system to match employer payroll information in\nEmployment's files with income from employment reported by recipients to\ncounty welfare.\n-8-\nF. Legal abuses of welfare programs\n1. Questionable payment of aid\na. Tightened regulation on amounts taken into account for transportation\nto work or training by private car.\nb. Regulations under development: to prevent recipients from remaining\neligible or being immediately reinstated to rolls after receiving\nand disposing of sizeable nonrecurring lump sum payment; to prevent\nemployed recipient from under-claiming number of dependents for\nincome tax payments to obtain lump sum tax rebate; to standardize\nprocedures for handling fluctuating income to minimize uncollectible\noverpayments.\nc. Joint State/county study leading to possible consideration of monthly\nincome reporting card system for AFDC.\n2. Questionable use of welfare funds by recipients\na. No precise information on number of families \"misusing\" welfare funds.\nAll available evidence indicates very small.\nb. Money management problems of many recipients compounded by: pressing\ndebts incurred prior to receipt of aid; pressure to make unrealistic\n\"big-ticket\" purchases on long-term credit at high interest; aid\npayments not meeting current needs.\nc. When funds diverted to detriment of children, regulations direct\ncounties to discontinue cash payments and impose controlled payments -\nvendor or third party. Almost one percent of families on controlled\npayments.\nd. In aggravated situations counties directed to seek removal of\nchildren through court action.\ne. Stronger money management regulations being adopted in August emphasize\nabove actions and direct counties to:\n-9-\n- Stress prevention money mismanagement potential through prompt\naid delivery and early identification of families with potential\nproblems.\n- Place responsibility on specialized staff to deal with problems.\n- Work with creditors in correcting and resolving problems.\n3. Letter from Spencer Williams to County Welfare Directors, Boards of\nSupervisors, and District Attorneys soliciting information and suggest-\nions on the problem. Responses to this to provide basis for further\naction.\nG. Failure of absent fathers to provide for support of their children up to\ntheir ability\n1. Adopted regulations to improve cooperative welfare law enforcement efforts\nto locate deserting fathers, establish paternity, obtain child support.\nKey provisions:\na. Commitment at State and county level of specialized units or staff\ndedicated to this effort.\nb. Procedures to use Internal Revenue files to locate deserting fathers.\nC. Cost-sharing arrangement with law enforcement to provide federal\nreimbursement of additional costs. (Pressing Federal Government to\neliminate maintenance of effort restriction on district attorney\ncosts).\nd. Cooperative arrangements between counties and with other states.\nClose involvement of District Attorneys and Family Support Council in\nprogram.\nH. Administrative complexity of the welfare system\n1. Administrative simplification adult aid programs based on recommendations\n-10-\nof State/county simplification committee.\na. Actions taken - revised basic needs chart; consolidated 96 different\nspecial diet allowances into one; standardized needs allowed due to\ncertain critical factors or physical handicap for restaurant meals,\nlaundry, and telephone; eliminated special yard care allowance.\nb. Under study November hearing se restructuring several special need\nitems; simplified treatment of allowances for utilities.\n2. Automated support for the aged. This concept first enunciated in Governor's\nmessage to 1969 Legislature. Being implemented through study to determine:\nfeasibility of graded system of standard allowances exclusive of one-time\nand emergency needs from which income would be deducted; whether amount\nof information and frequency of client contact can be safely reduced;\nwhether an amount not too different from current grant levels can be\nestablished so as to remain unchanged for at least 12 months. If results\nand study are favorable, grant changes can be automated to a very great\nextent. If in effect 1968, counties could have avoided many of the\n900,000 changes in grant.\n3. Simplified eligibility system - use of eligibility statement\na. In effect statewide in OAS; optional use in AB-ATD until 1-1-70,\nstatewide thereafter; no final decision on use in AFDC. Use in AFDC\nconfined to five test counties with testing to start 9-1-69 and\nextend through 6-30-70 if needed. Decision as to further use to be\nbased on test results, and then existing federal requirements.\nb. Interview required in every case despite federal objections. Full\nfield investigation of random sample of all cases granted aid.\nC. Eligibility statement requires declaration of all facts pertinent to\n-11-\neligibility for aid. Applicant required to subscribe to the truth-\nfulness of the facts declared by witnessed signature. This statement\nintegral part of case record and available to district attornesy in\nprosecuting cases of fraud.\nI. Overemphasis on social services beyond demonstrated need and/or desire of\nrecipients\n1. Traditional approach - same worker responsible for both aid payments and\nsocial services has resulted in:\na. Lack of distinction in identifying true service needs - almost every\nfamily case a \"service\" case.\nb. Diffusion of effort.\nc. Inefficient use of staff resources.\n2. New approach - organizational and functional separation aid and services\nwith some units and staff concentrating on aid payment procedures with\nothers concentrating on social services. Good start made on process -\nwill be operational statewide 7-1-70. Expected benefits:\na. Greater visibility social service activities - much more accessible\nto administrative direction, control.\nb. Concentrated attention by specialized staff on true service needs.\nc. Use of eligibility workers opens way jobs for persons less than\nfour-year college.\nd. Use of Service Aides and Eligibility Aides opens ways to new careers\nfor disadvantaged.\ne. New system facilitates use of citizen volunteers.\n-12-\nJ. Information and knowledge gap\n1. No assumption of precise cause/effect relationship between social and\neconomic factors outlined earlier and public dependency. Fact is -\nstill flying blind.\n2. Public welfare system short of verifiable information as basis for:\na. Guiding set of ideas regarding nature and causes of problems\nwe deal with.\nb. Judgments as to approaches calculated to yield best results at\nleast cost.\nC. Objective measurement of results.\n3. Some small starts made around edges of problem but basic problem (which\nis nationwide) requires massive research effort.\nIII\nForces at Work Which Must be Taken into Account in Dealing with the Welfare Problem\nA. Current social ferment - revolution of rising expectations\nGovernor and Cabinet aware there are powerful forces at work in our society\nas evidenced by campus militancy, increasing urban crisis, the current social\nferment, and what has been called the \"revolution of rising expectations\".\nThese same forces are having a very direct impact on our welfare programs.\n1. Some examples on the national scene:\na. Poor People's Campaign - pressure on former Secretary Cohen to adopt\nliberal regulations in dying days of previous national administration.\nb. Demands to revamp or junk present system in favor of some kind of\nguaranteed minimum annual income system.\nC. Increasing demand for direct voice in welfare policy and practice\nby recipient groups.\n-13-\n2. Some examples closer to home.\na. In confrontations with recipients at public hearings and other\nmeetings have sensed increasing militancy and frustration. Single\nmost pervasive feeling which comes across is the sincere and passion-\nate concern these AFDC mothers have for the future of their children.\nb. Have given their constructive expressions of concern careful, sym-\npathetic attention. Through these means and by keeping open lines\nof communication with them and their organizations, am working to\nencourage and sustain their confidence in normal democratic processes\nof government. This approach is serving to keep things pretty cool\nin California, in contrast to heat being generated over welfare\nissues in other places.\nB. Reflection of these forces in the Legislature\n1. Legislators aware of and sensitive to these forces. WRO's have liaison\nwith significant group of legislators.\n2. Approach of Legislature to welfare problems reflects polarization of\nattitudes of people on meaning of \"welfare reform\". To half, \"reform\"\nmeans liberize, while to the other half, \"reform\" means cut.\n3. Influence of these forces and public attitudes on Legislative Branch is\nreflected in manner in which it has dealt with Administration's legis-\nlative program. (See attached summary)\nC. Reflection of these forces in the courts\n1. Welfare law and administrative practice increasingly being challenged in\nthe courts as part of apparent nationwide strategy. Most issues involved\nin suits are on \"target\" list of ten issues in field of welfare developed\nand promulgated in 1966 by Center on Social Welfare Law and Policy at\nColumbia University.\n-14-\n2. Consequences of suits brought against California and other states\nparticularly significant since most are \"class actions\" brought on\nbehalf of one or more named recipients plus all the recipients in\nthe same situation. Summary of most significant California cases in\npast year is attached.\nCATEGORICAL ASSISTANCE PROGRAMS\nESTIMATED EXPENDITURES AND PERSONS AIDED\n1969-70 FISCAL YEAR\nEXPENDITURES\nPERSONS AIDED\n$22,941,800\n$12,700\n(1.75%)\n(0.83%)\nAB-APSB\nAB & APSB\nOAS\nATD\n313,000\n157,000\n(20.66%)\n(10.36%)\nOAS\nATD\n$401,834,100\n$230,214,800\n(31.46%)\n(17.58%)\nAFDC\nAFDC\n(FG&U)\n(FG&U)\n$654,028,700\n1,031,600\n(49.96%)\n(68.12%)\nTOTAL EXPENDITURES $1,309,019,400\nTOTAL PERSONS AIDED 1,514,300\nSTATE DEPARTMENT OF SOCIAL WELFARE\nOFFICE OF PLANNING\nSOURCE: 1969-70 GOVERNOR'S BUDGET\nSTATUS OF ADMINISTRATION BILLS AS OF July 25, 1969\nBILL NO.\nAUTHOR\nPOSITION\nSTATUS\nSUBJECT\nSB 714\nHarmer\nSupport\nDo pass\nAuthorizes providing landlords with forwarding\nAssembly\naddress of tenant who left without payment of rent\nHE W Subcomm\n835\nDolwig\nSupport\nHeld in\nUniform criminal procedure for illegal receipt\nGov Eff\nof aid\n837\nGrunsky\nSupport\nHeld in\nPreplacement study for independent adoptions\ncommittee\n847\nStevens\nSupport\nAssembly\nATD - relative's responsibility\nH&W\n848\nStevens\nSupport\nHeld in\nLiens on real property\nFinance\n857\nDeukmejian\nSupport\nAssembly\nSupport provisions where unrelated adult male resides\nW&M\nin AFDC household\n924\nBurgener\nSupport\nAssembly\nEvaluation of allowances for recipients receiving\nfloor\ncomplete care\n977\nRichardson\nSupport\nHeld in\nResidence\nLab & S W\n999\nSherman\nSupport\nAssembly\nHomemaker service and out-of-home care\nfloor\n1118\nHarmer\nSupport\nHeld in\nJoint living standard for married adult recipients\nLab & S W\nSTATUS OF ADMINISTRATION BILLS AS OF July 25, 1969's\nBILL NO.\nAUTHOR\nPOSITION\nSTATUS\nSUBJECT\nSB 1184\nCoombs\nSupport\nHeld in\nExcludes as unemployment caused by trade dispute\nLab & S W\nas basis for eligibility to AFDC\n1335\nSherman\nSupport\nHeld in\nDisqualifies unemployed parents not covered by\nFinance\nSocial Security Act. Appropriates funds to\nprevent undue hardship\n1368\nWay\nSupport\nHeld in\nRepeals appropriation for PA programs\nLab & SW\n1369\nWay\nSupport\nDropped by\nAny federal grant increases after January 1969\nauthor\nshall render Inoperative cost-of-living increases\nfor same year\nAB 1332\nChappie\nSupport\nHeld in\nDisqualifies AFDC unemployed parent who refuses\nH & W\ntransportation to job\n1334\nHayes\nSupport\nSigned - -\nPrompt delivery of warrants\nChapter 509\n2135\nChappie\nSupport\nHeld in\nRepeals obsolete section\nH & W\n11\ntate of California-Human Relations Agency\nJuly 196\nSUMMARY OF RECENT COURT CASES\nPage 1 of\nSubject\nIssue\nPosition of State\nStatus/Comment\nResidence\nWhether state laws requiring\nInsisted vigorously and to\nIn April 1969, the Supreme Cour\nspecific length of residence\nthe end that such laws were\nruled 6 - 3 that such laws are\nviolate the Constitution.\nconstitutional and authorized\nunconstitutional.\nby Congress\nCalifornia and a number of other\nstates had already been under\ncourt order to the same effect\nfor more than one year.\nAid Pending Fair Hearing\nWhether a recipient whose\nCalifornia regulations pro-\n--In Federal Courts--California\nwelfare grants are discon-\nvide adequate due process of\nposition that aid need not be\ntinued or greatly reduced\nlaw protection to the\npaid upheld by 3-judge U. S.\nand who asks for a \"fair\nrecipient.\nDistrict Court. Case now on\nhearing\" is entitled to aid\nappeal to U. S. Supreme Court.\nuntil the fair hearing deci-\nsion is rendered.\n--In State Courts--A State\nSuperior Court ruled that perso\nwhose aid was discontinued and\nwho could deny under oath the\nfacts on which this was based\nwere entitled to continued aid\npending fair hearing decision.\nThis case is on appeal pending\nbefore State District Court of\nAppeal.\nNOTE: Current federal regulati\nto become effective 10/1/69 als\nprovide for aid pending fair\nhearing decision.\nJuly 1969\nSUMMARY OF RECENT COURT CASES\nPage 2 of 3\nSubject\nIssue\nPosition of State\nStatus/Comment\n\"It Pays Not To Work\"\nWhether it is a violation of\nThis is not only constitu-\nPending decision in 3-judge\na person's constitutional\ntional but compelled by law.\nU. S. District Court.\nright to terminate aid be-\ncause he is fully employed\nwhen his earnings are less\nthan his welfare benefits.\nCost of Living\n(1) Whether the present\nThe standard of assistance is\nTwo cases are pending--one in\nmaximum grants in AFDC\nset by the Legislature in the\nfederal and one in state court.\nare adequate for safe\nlawful exercise of its\nand healthful living.\nresponsibilities.\n(2) Whether it was lawful\nIt was lawful and appropriate\nArgued before District Court of\nto exclude from last\nto disregard the medical\nAppeal and pending decision.\nyear's increase in the\ncomponent since medical care\nadult programs the\nwas provided free of charge.\nmedical component.\nGross or Net Income\nWhether the earned income\nIt is lawful and proper to\nHearing set for July 29, 1969.\nexemptions provided by\ncompute on a \"net\" basis.\nfederal and state law are to\nbe computed on a \"net\" or\n\"gross\" basis.\nMan in the House\nWhether it may be presumed\nCompletely equal treatment of\nA 3-judge U. S. District Court\nthat the income of the male\nall males in this position is\nupheld the state regulations\nparent figure in a household\ncompelled by the Constitution\nand declared the federal regula-\nis available to support the\nand consistent with state and\ntions to be in violation of the\nentire family irrespective of\nfederal law.\nSocial Security Act. The case\nstatus as father or step-\nis now on appeal to the U. S.\nfather or unmarried consort\nSupreme Court.\nto the mother of the\nchildren.\nof California-Human Relations Agency\nDepartment of Social Welfare\nJuly 1969\nSUMMARY OF RECENT COURT CASES\nPage 3 of 3\nSubject\nIssue\nPosition of State\nStatus/Comment\nIncome Set Aside for\nWhether under state regula-\nSuch arrangements need be\nAwaiting decision by San Francisc\nEducational Purposes\ntions outside income other\nmade only when they are:\nSuperior Court.\nthan the child's earnings\nmust be allowed to be set\na) Appropriate\naside for educational\nb) Expressly requested\npurposes.\nFood Stamps and\nWhether a surplus food\nNeutral\nMoot. As of July 1, all counties\nCommodities\nprogram must be available\nhad at least one of the two pro-\nin all counties in\ngrams and the case was dismissed\nCalifornia.\nPERTINENT QUESTIONS ABOUT WELFARE\n1. Why are caseloads going up when the level of the economy remains high and\nmany jobs go unfilled?\n2. What can be done to reverse the trend of rising public assistance costs?\n3. Why has the number of needy children increased twice as fast as the\nchild population during the last decade?\n4. Why has the Legislature failed to enact cost-reducing legislation?\n5. Why have county governments opposed cost-reducing legislation?\n6. How far can a welfare recipient be required to travel to take a job?\n7. Can a welfare recipient refuse a job because it is below or different than\nhis training or experience level?\n8. How often does a welfare recipient have to report to the Department of\nEmployment?\n9. What can be done if a welfare recipient dresses or conducts himself in\nsuch a manner that his appearance makes him unacceptable to an employer?\nSTATE OF CALIFORNIA HUMAN RELATIONS AGENCY\nDEPARTMENT OF SOCIAL WELFARE\nCOST REDUCTION CHANGES IN WELFARE PROGRAMS, SHOWING LEVEL AND BRANCH OF GOVERNMENT HAVING AUTHORITY TO EFFECT THEM\nChange can be Accomplished Through:\nPage 1 of 3\nI\nII\nIII\nIV\nV\nVI\nFEDERAL LAW ONLY\nSTATE LAW ONLY\nCOST REDUCTION ITEMS\n(KEY SECTIONS OF\nFEDERAL REGULATIONS\nSTATE LAW/\nSTATE LAW/\n(KEY SECTIONS OF\nSTATE REGULATIONS\nFEDERAL REGULATIONS\nSTATE REGULATIONS\nSOCIAL SECURITY ACT)\nW & I CODE)\n1. Eliminate one or more Aid Programs\nDivision 9\nRestrict basic program coverage thus reducing number of\nrecipients and number of those in general population who\nwould qualify if they applied for aid:\n2. By redefining personal characteristics required for\neligibility to make them more restrictive\na. OAS Age\n2(b)(a)(1)\nW&IC: 12502\nb. AB - Degree of Blindness\nReg: 42-103\nW&IC: 13501\nC. ATD - - Extent of Disability\nReg: 42-203\nd. AFDC-FG - Deprivation of Parental Support\n406(a)\ne. AFDC-U Definition of Unemployment\n11201\n3. By decreasing maximum personal and real property\nallowed\na. OAS\nb. AB\n11150-11157\nc. ATD\nd. AFDC\n11255-11261\nTATE OF CALIFORNIA - HUMAN RELATIONS AGENCY\nDEPARTMENT OF SOCIAL WELFARE\nCOST REDUCTION CHANGES IN WELFARE PROGRAMS, SHOWING LEVEL AND BRANCH OF GOVERNMENT HAVING AUTHORITY TO EFFECT THEM\nChange can be Accomplished Through:\nPage 2 of 3\nI\nII\nIII\nIV\nV\nVI\nFEDERAL LAW ONLY\nSTATE LAW ONLY\nCOST REDUCTION ITEMS\nFEDERAL REGULATIONS\nSTATE LAW/\nSTATE LAW/\nSTATE REGULATIONS\n(KEY SECTIONS OF\n(KEY SECTIONS OF\nFEDERAL REGULATIONS\nSTATE REGULATIONS\nSOCIAL SECURITY ACT)\nW& I CODE)\n4. By reducing assistance standards used to determine\nfinancial need\n12150-12152\na. OAS\n12159\nb. AB\n12650-12652\nW&IC: 13700-13701\nc. ATD\nReg: 44-207\nd. AFDC\nW&IC: 11452-11453\nReg: 44-212\n5. By reducing income exemptions in determining\nentitlement to aid and amount of grant\na. OAS\n11008\nb. AB - Earned Income\n1002(a)(8)(A)\nc. AB - Income for Self-Support Plan\n1002(a)(8)(B)\nd. AB - Other Income\n12654\ne. ATD\n11008\n402(a)(8)\nf. AFDC-FG & Federally Eligible AFDC-U\n402(a)(19)(D)\ng. AFDC-U Nonfederal Eligible\nX\nTATE OF CALIFORNIA - MUMAN RELATIONS AGENCY\nDEPARTMENT OF SOCIAL WELFARE\nCOST REDUCTION CHANGES IN WELFARE PROGRAMS, SHOWING LEVEL AND BRANCH OF GOVERNMENT HAVING AUTHORITY TO EFFECT THEM\nChange can be Accomplished Through:\nPage 3 of 3\nI\nII\nIII\nIV\nV\nVI\nFEDERAL LAW ONLY\nSTATE LAW ONLY\nCOST REDUCTION ITEMS\n(KEY SECTIONS OF\nFEDERAL REGULATIONS\nSTATE LAW/\nSTATE LAW/\n(KEY SECTIONS OF\nSTATE REGULATIONS\nFEDERALREGULATIONS\nSTATE REGULATIONS\nSOCIAL SECURITY ACT)\nW & I CODE)\nRestrict overall level of aid expenditures:\n6. By closed-end appropriation with rateable reduction\n15200-15204\nof aid payments across board when expenditures\nthreaten to exceed appropriation\n7. By establishing over-all ceiling on gross family\nX\nincome from public assistance and all other sources\nmpose conditions designed to motivate people to seek\nilternatives to public assistance:\n8. By requiring liens on real property\n11007\n9. By extensive use of controlled payments (vendor or\n6(a); 406(b)(2);\nthird party)\n1006; 1405\n10. By increased requirement and rigorous enforcement\n12101; 12600;\nof relative responsibility in adult aid programs\n13600;\n11. By discontinuing aid in all AFDC cases for refusal\n402(19)F\nwithout good cause to accept work, job training or\nvocational rehabilitation\nPL 90-248\n12. By requiring all able-bodied AFDC recipients to\nSection 204(c) -\nperform useful public work in return for their aid\nRepeals Section 409\nSoc. Sec. Act\n:liminate federal provisions on:\n13. Limitations on federal reimbursement for certain\n407(b)(1)(A-C)\nAFDC-U cases\n14. Requirement that free legal services be given\n45 CFR-205.10\nappellants\n15. Requirement that aid be paid pending appeal\n45 CFR-205.10\ndecision\n16. Limitations on federal reimbursement of district\n45 CFR\nattorney costs of parental support enforcement\n220,61(f)(4)(v)\n17. Requirement that states reduce the rigor of\n45 CFR 220.5(a)(2)\ninvestigative methods in AFDC and rely heavily on\nclient statements\nPrepared by Office of Planning - August 1969\nState of California\nHuman Relations Agency\nMemorandum\nTo\n:\nThe Honorable Ronald Readan\nDate :\nAugust 6, 1969\nGovernor of California\nFile No.:\nVIA: Earl Coke\nAssistant to the Governor\nSubject:\nReport on White House\nfor Cabinet Affairs\nBriefing - President's\nWelfare Reform Proposal\nFrom\n:\nOffice of the Secretary\nTime:\n1:30 p.m., Roosevelt Room, White House\nPresent:\nGovernor James A. Rhodes, Ohio\nGovernor Raymond P. Shafer, Pennsylvania\nGovernor Francis W. Sargent, Massachusetts\nRepresentatives of Governor Nelson A. Rockefeller,\nNew York\nSpencer Williams, representing Governor Ronald\nReagan of California\nPresentation by:\nRepresentatives of the Department of Health,\nEducation, and Welfare, Department of Labor,\nand Bureau of the Budget\nLegislative Timetable:\nPresent program in general terms now -\nwork out legislative and other details\nduring the recess\nThis presentation on welfare reform was described as one part of\na three-part package.\nThe other two, to be announced later: Manpower training\nRevenue sharing\nThe Welfare Reform Plan:\nRepeal the AFDC/AFDC-U program (Title IV\nof the Social Security Act)\nSubstitute Nixon work-oriented \"Family\nSecurity Plan\" (FSP)\nThe six basic objectives of FSP:\n1. Set Federal minimum income standards for families\n2. Promote family unity\n3. Assist (supplement) the working poor\n4. Expand job training opportunities\n5. Impose strong work requirements\n6. Provide fiscal relief to the states\nThe Honorable Ronald Reagan\n-2-\nAugust 6, 1969\nFamilies Covered: All families, whether headed by man or woman,\nhaving earned income less than $3,920.\nMaximum Federal Benefits:\n$500 each for first two\n$300 for each additional\nor\n$1,600 for family of four\nFor Families With Earnings:\nThe first $720 will be fully exempt -\nthereafter, one-half of earnings over\n$720 will be exempt. There is no\nproposed ceiling on maximum combined\ngrant plus income.\nRepresented on a table this means:\nEarned Income\nBenefit\nTotal Income\n0\n1600\n1600\n720\n1600\n2320\n1000\n1460\n2460\n1500\n1210\n2710\n2000\n960\n2960\n2500\n710\n3210\n3000\n460\n3460\n3500\n210\n3710\n3920\n0\n3920\nOr, on a rough graph:\n3920\n1600\nmetarnings\nFee\nSupport\nAs the earnings go up, the total goes up, and Federal supplement\ngoes down.\nThe states will be required to maintain their present levels of\nbenefits, but if lower than the Federal standard, will not be\nreleased from more than 50% of their present costs. If a state\nis higher than the Federal minimum, they will not be required\n(by Federal regulation) to contribute more. than 90% of its\nThe Honorable Ronald Reagan\n-3-\nAugust 6, 1969\npresent costs (which may mean that the low-paying southern\nstates may be the big winners in this plan). However, each\nstate is supposed to realize at least 10% relief.\nIt is estimated that this program will extend to 23 million\n(as compared to the current 10 million) but that the states\nwill not be required to contribute supplementation to the\n\"working poor\".\nIn response to my question, they said that the new \"working poor\"\nclassification need not necessarily be eligible for Medi-Cal.\nNo discussion was directed towards the family that had no\nworking member.\nThe proposal also covers major changes in the adult categories;\ne.g., blind, totally disabled, aged.\nThe Federal Government would impose a Federal floor of $65\nper month combined grant and income for all adult categories.\nIt would pay\n100% of the first $50 required\n50% of the next $15 required, and\n25% of all else.\nAll states should experience savings from this modification.\nStiffer work requirements were provided as a part of the new\nprogram:\n1. Registration of Unemployed - all applicants for FSP must\nregister at their employment office.\n2. Training and Employment - all employables would lose benefits\nif they refuse to accept training and employment without good\ncause.\n3. Day Care - Adequate and convenient day care would be available\nfor children of working parents. This would be on a 90-10\nbasis- payments going to the recipients who would then purchase\ncare (from licensed facilities) on the open market.\nIt was suggested that there would be over 1 million training and\nemployment opportunities (including jobs in day care centers) that\nwould stimulate utilization of this program.\nThe real \"kicker\" came in the proposal for Federal administration\nof the program.\nSince the Social Security Administration already has 800 offices and\n51,000 employees, it could be converted to pick up this additional\nfunction.\nThe Honorable Ronald Reagan\n-4-\nAugust 6, 1969\nEligibility would be determined from Declaration Forms filed\nby the applicant with subsequent spot check to verify the\nfacts.\nChanged conditions of income on family status would be reported\nby the recipients and\nAdjustments in payments would be made as a result thereof.\nFraud for failure to report changed conditions, or by improperly\nreporting salient facts in the original application, would become\na Federal offense (misdemeanor) prosecuted in Federal Courts by\nFederal officials.\nSocial Services to the recipients would continue to be the\nresponsibility of the states (and in California, the counties).\nThings were somewhat fuzzy about the division of responsibility--\nhow the states and Federal Government could contract for an\nallocation of responsibilities- the mechanisms for state\nsupplementation of Federal payments.\nIt was pointed out that this new program would add $4 billion\nto Federal commitments.\nWould provide states with needed \"relief\" in three forms:\n1. Actual savings\n2. Revenue sharing\n3. Additional Federal funds for day care centers\nFor Ohio:\n1.\n$30.2 million\nMassachusetts:\n1.\n$31.1\n2.\n40\n2.\n29.6\n3.\n26\n3.\n16.8\n$96.2\n$77.5\nPennsylvania:\n1.\n$40.4\nCalifornia:\n1.\n$175\n2.\n53\n2.\n112\n3.\n35\n3.\n90\n$128.4\n$377\nIn conclusion - Feds said this was an effort to cure two kinds\nof inequities:\n1. Those coming from regional differences\n2. Differences between Man and Woman being head of household\nAlso, that it improved the bridge to employment and constituted\nfundamental reforms.\nThe Honorable Ronald Reagan -5-\nAugust 6, 1969\nGovernor Rhodes said - this plan perpetuates an existing system\nthat has already failed--that it is using band-aids when major\nchange was required- that it would really get Nixon into a\npickle that education, particularly vocational education, was\nthe way to go--that it was O.K. for Feds to take over aged,\nblind and disabled (and save states $1 billion) because these\nnot \"poverty oriented\" but that states should stay in picture\non AFDC.\nGovernor Shafer said - it was not \"dramatic enough\" that it was\nmishmash of ideas--did not offer sufficient immediate help to\nstates--that welfare second only to Vietnam and campus disturbances--\nwas most emotional and misunderstood problems states had.\nGovernor Sargent felt President should be very general in his\napproach--cautioned against broadening base (welfare coverage)\nbefore solving problems of those already there--concurred with\nRhodes and Shafer.\nSpencer Williams - questioned validity of figures--challenged\n\"philosophy\" of shifting responsibility and authority to Federal\nGovernment as being contrary to Nixon approach just that much\nfurther from the concerned voters--felt we should concentrate\non those now on welfare and pour any additional resources into\nthe children (50% of total load) to prevent them from being our\nwelfare recipients of tomorrow.\nThe Federal staff seemed concerned--but almost too far down the\ntrack to make any major reversals.\nSPENCER SemanWilliam WILLIAMS\nSecretary"
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