Panel revises anti-fraud pilot project plan

The state Department of Finance and Administration would be required to determine the best way to implement a proposed pilot project targeting fraud, waste, abuse, improper payments and employer noncompliance in the state’s unemployment insurance, welfare and food-stamp programs under a legislative panel’s recommendation.

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The Joint Budget Committee learned Wednesday that its Special Language Subcommittee on Tuesday had reversed its earlier recommendation to require the department to launch the pilot project by the end of September. Last week, department Deputy Director Tim Leathers warned lawmakers that implementing the pilot project would cost roughly $8.5 million - an estimate that several lawmakers scoffed at.

Instead, the subcommittee recommended that the department conduct a study about the proposed pilot project and report its findings and recommendations to the Legislative Council by Oct. 24.

The department would have to determine the most economical and efficient means of implementing the pilot project using fraud detection technology for the state’s unemployment insurance program, the Temporary Assistance for Needy Families program and the Supplemental Nutritional Assistance Program, often referred to as the food-stamp program, under the amendment proposed by Sen. Jonathan Dismang, R-Searcy, to House Bill 1045 - an appropriation for the department.

Under Dismang’s amendment, the department would have to compare both agency-hosted and vendor-based solutions and report on the funds required and possible law changes needed to implement these solutions.

“I understand there is going to be some transitions in the next year, and it’s probably wise to set the stage appropriately as a legislative body to take this on in the future,” Dismang said Tuesday. “I think we have some work to do to make sure that we are rolling in the right direction.”

HB1045 is pending in the Joint Budget Committee.