The state Department of Finance and Administration would be required to launch a pilot project targeting fraud, waste, abuse, improper payments and employer compliance in the state’s unemployment insurance, welfare and food stamp programs under a proposal that cleared a legislative panel Wednesday.
In an 11-3 vote, the Joint Budget Committee’s Special Language Subcommittee voted to add this amendment proposed by Sen. Jonathan Dismang, R-Searcy, to the committee’s House Bill 1045 - an appropriation for the state Department of Finance and Administration in fiscal 2015. Sen. David Johnson, D-Little Rock, and Reps. John Catlett, D-Rover, and Jim Nickels, D-Sherwood, dissented.
The department would be required to start the pilot project in the state’s unemployment insurance program, the Temporary Assistance for Needy Families program and Supplemental Nutrition Assistance Program (also known as food stamps). The amendment mandates “state-of-the art enterprise fraud detection technology that can further support detection and prevention across state agencies, programs and functions.” The project would be required to begin within 90 days of July 1.
Dismang said his proposal would allow the state to “weed out some fraud” in these programs.
Tim Leathers, deputy director for the department, said the department doesn’t have any problem with the concept of using a system like this, but “we do have serious issues with the fact that it designates a certain type of contract under certain parameters. Dismang’s proposal doesn’t give enough time for the state to issue a request for proposals to allow companies to compete for the contract, he added.
State officials estimate it would cost about $8.5 million to implement the project, Leathers said.
Subcommittee co-Chairman Rep. Hank Wilkins, D-Pine Bluff, countered that, “This doesn’t look like $8.5 million to me.”
Paul Louthian, the state’s accounting administrator, said the project’s implementation costs include $4.9 million for the Arkansas Administrative Statewide Information System [AASIS], $2.1 million for the state’s tax system and $1.1 million for the state’s child support system, and $305,000 for three workers.
Dismang said whoever wins the contract would be able to pull from existing state information “and not have to recreate [data sets]. We may be over blowing [the cost estimate] some.” He said he’s willing to work with the department on the amendment if it needs to be tweaked.
Afterward, Dismang said he’s not trying to steer the contract under his proposal to any particular company, adding that there are different vendors that could be used by the state.
Arkansas, Pages 11 on 02/20/2014