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Authorize the replacement of General Assistance funds utilizing up to $15,000 in County General Fund, and with concurrence from the County Administrator and Auditor-Controller, which have been swiped from clients’ Electronic Benefits Transfer cards for a six-month period from February 2, 2022 through July 31, 2022 or until the California Department of Social Services reports that the current swipe scam has been resolved if earlier than July 31, 2022; and Amend the General Assistance Accounts Receivable Write-Off Policy approved by the Board of Supervisors on December 10, 2019 to include the write-off of General Assistance benefits that have been stolen through electronic theft
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Published Notice Required? Yes ___ No _ X_
Public Hearing Required? Yes ___ No _ X_
DEPARTMENTAL RECOMMENDATION:
The Department of Health and Social Services recommends the Board of Supervisors authorize the replacement of General Assistance funds utilizing up to $15,000 in County General Fund, and with concurrence from the County Administrator and Auditor-Controller, which have been swiped from clients’ Electronic Benefits Transfer cards for a six-month period from February 2, 2022 through July 31, 2022 or until the California Department of Social Services reports that the current swipe scam has been resolved if earlier than July 31, 2022; and amend the General Assistance (GA) Accounts Receivable Write-Off Policy approved by the Board of Supervisors on December 10, 2019 to include the administrative write-off of General Assistance benefits that have been stolen through electronic theft.
SUMMARY:
Electronic Benefits Transfer (EBT) is the benefit delivery system that allows CalWORKs, CalFresh, and other program recipients, including General Assistance, to use a card to access their benefits. The EBT program is administered by the California Department of Social Services (CDSS). CDSS contracts with private vendors to run the technical operations of the program. EBT cards issued prior to October 2018 did not have the card verification value (CVV) technology which is a security feature found on most credit and debit cards. CVV is a three- or four-digit security code printed on credit and debit cards and provides an added security measure against online fraud.
Beginning late 2021, counties throughout California began reporting that CalWORKs, CalFresh and General Assistance recipients were experiencing benefits being “swiped” or removed from their EBT cards. For recipients of CalWORKs and CalFresh, when a recipient reports the benefits have been removed from their card, they are asked to file a police report, file a claim with EBT and complete a State form (EBT 2259). The form is then sent to the State for review and the claim is reviewed by the EBT vendor. Benefits are then replaced on the EBT card if the review determines that the benefits were swiped. Determination of swiped benefits is confirmed by reviewing the EBT history in the CalWIN system. All swiped benefits follow a clear pattern of removal within five minutes of loading the benefits on the EBT card. The benefits show as being swiped off the card and typically not in the same location as where the recipient resides. In Solano County to date, there have been 69 swiping reports received and reported for CalWORKs benefits and 6 reports for CalFresh. For CalWORKs and CalFresh benefits, repayments are reimbursed by the State General Fund.
However, General Assistance benefits are County administered and County funded. In Solano County, four General Assistance (GA) clients to date have been victim of having their benefits “swiped” or stolen from their EBT cards, representing approximately $1,440 in benefits. The Board of Supervisors holds authority on the decision to restore GA benefits when stolen. The GA Minute Order (Attachment A) does not provide guidance on this issue; therefore, the Board is asked to authorize the replacement of these funds utilizing County General Fund. Recipients reporting their benefits were swiped will be required to follow the same process that is required for CalWORKs and CalFresh recipients.
Additionally, since GA benefits are considered loans, only the Board can authorize the write-off of GA benefits. The current GA accounts Receivable Write-Off Policy (Attachment B) needs to be amended to include the authorization to administratively write-off GA benefits that have been stolen through electronic theft (Attachment C).
FINANCIAL IMPACT:
To date, four GA recipients have reported that their benefits have been removed from their EBT card. The total stolen amount is approximately $1,440. As stolen benefits continue to be an issue for all public assistance benefits, it is anticipated that requests for replacement will continue. General Assistance costs are one hundred percent funded with County General Fund. At this time the department is not requesting an increase in County General Fund contribution for the General Assistance Budget as it is anticipated that the cost will remain within budgeted appropriations; however, should the cost increase be beyond budgeted appropriations, the department will return to the Board to request approval of an ATR.
DISCUSSION:
General Assistance replacement funds will come from the County General Fund. Additionally, because General Assistance is a loan that requires repayment upon discontinuance of General Assistance, the loan amount will be written-off to eliminate the replacement amount from the total loan balance. General Assistance recipients reporting that their benefits were swiped will be asked to follow the same process that is required for CalWORKs and CalFresh. Recipients will be required to file a claim with EBT as well as file a police report. The individual would also be required to complete a form certifying these steps were taken as well as specifics regarding the swiped benefits, similar to information requested on the State form EBT 2259. The information would then be reviewed by GA staff and program support to confirm that the benefits were stolen. The benefits would then be reissued in the CalWIN system. The repayment unit and H&SS Administration (Fiscal) would then be notified of the action taken so adjustments can be made to the loan amount.
If more than two reports of stolen benefits are reported for General Assistance, then a fraud referral would be completed.
During early March, the State and the EBT vendor issued new cards to any public assistance recipient whose card was issued prior to October 2018 so that recipients will have cards with card verification value (CVV) technology; the three, or sometimes four, digit code used with debit or credit cards. By April 2022, all CalWORKs, CalFresh and General Assistance recipients will have an EBT card with CVV technology and the State and the EBT vendor believe this will reduce the incidence of stolen benefits.
ALTERNATIVES:
The Board could choose not to approve the proposal to replace swiped GA benefits to the EBT card and not to amend the GA Accounts Receivable Write-Off Policy to administratively write-off GA benefits that have been stolen through electronic theft. However, this is not recommended as it would place undue hardship on the community’s most vulnerable residents.
OTHER AGENCY INVOLVEMENT:
California Department of Social Services (CDSS) and California Welfare Directors Association (CWDA) are working collaboratively with EBT and counties to investigate and resolve the issue. Solano County will continue to track all reports received from victims.
County Counsel and the Auditor-Controller’s Officer were consulted on this item.
CAO RECOMMENDATION:
APPROVE DEPARTMENTAL RECOMMENDATION