Skip to main content

WATCH LIVE: Trial of Derek Chauvin – Day 13 (Posted 04/14/21 at 7:11 a.m.)

LATEST UPDATES: Tracking COVID-19 | Vaccines | Racial Justice

Fraud Allegations Against State Program Don’t Add Up


Right before cutting $250 million from the state's In-Home Supportive Services program, Governor Schwarzenegger alleged that there was massive fraud in the program. KPBS reporter Amita Sharma discusses her investigation into the validity of those fraud accusations.

Video unavailable. Read transcript below.

Above: Gov. Arnold Schwarzenegger justified cuts to In-Home Support Services with claims of rampant fraud in the system. KPBS investigative reporter Amita Sharma said the actual fraud cases are much lower than the governor claims.

MAUREEN CAVANAUGH (Host): I'm Maureen Cavanaugh, and you're listening to These Days on KPBS. When Governor Schwarzenegger approved legislation to cut the budget and added a few cuts of his own this summer, he talked about shared sacrifice. After all, California is struggling out of a deep financial hole. This summer, the state ran out of cash and there was even talk of bankruptcy, so not many people are not shocked to hear that state agencies have been hit hard by budget cuts. But quite a few of us are shocked when we hear about the human impact of those cuts. This week, KPBS investigative reporter Amita Sharma has a two-part report on cutbacks to the In-Home Supportive Services program. One report addresses allegations that the program was rife with fraud and the other examines the affects the cuts will have on the people who need help. Amita, good morning.

AMITA SHARMA (KPBS Investigative Reporter): Good morning, Maureen.

CAVANAUGH: Now what does the state’s In-Home Supportive Services do?

SHARMA: In-home Supportive Services provides personal care for the disabled, the blind, the elderly. Caregivers basically help these people out in bathing, in cleaning, cooking, doing shopping for them, giving them their medication. And the goal is to offer these services so these people can continue living in their homes rather than being institutionalized.

CAVANAUGH: And that, in essence, saves the state money.

SHARMA: It does.

CAVANAUGH: Now, what kind of cuts are we talking about from this program?

SHARMA: $263 million are being cut from a $4 billion program that is only growing at this point. The cuts were made to help close a $24 billion budget deficit in the state.

CAVANAUGH: Now this was more than a budget cutting move, at least that was what it was presented by the governor. He said – he alleged that there was massive fraud in the program. Now can you tell us more about that?

SHARMA: He did. In July, Governor Schwarzenegger held a press conference during which he alleged widespread fraud, as you said, within the In-Home Supportive Services program and he said that fraud rate could be as high as 25%.

CAVANAUGH: And why? Why did he think there was so much fraud in the program?

SHARMA: Well, in recent years there have been about six county grand jury reports that have come out on In-Home Supportive Services and those reports cited anecdotal evidence of fraud but they didn’t offer any statistical evidence. And some district attorneys across the state believe there is poor fraud management, that there aren’t enough controls within the system. And since most of the people who provide the care in the program are either friends or relatives of the people receiving the care, they say that there is great potential for collusion for abuse within the system. And in San Diego, I should say, in the past couple of years, there have been three cases where the amount of fraud perpetrated on the system was over $100,000, and in one case, it was over $200,000.

CAVANAUGH: So, indeed, there have been instances of fraud but in your investigation did you find that it was as widespread as it had been characterized? Twenty-five percent of the budget fraudulent?

SHARMA: Well, the numbers, the straight numbers, don’t quite support the governor’s fraud claims. There are, statewide, 460,000 people within In-Home Supportive Services. From November – or July 2005 through November 2008, there were 5,000 complaints of fraud against the system and 1500 of those complaints were substantiated. That’s less than 5%. Last year in San Diego, where there are 25,000 people within the program, there were 42 complaints of fraud and there were 14 prosecutions. That’s less than 1%. In LA County the fraud rate is less than 1%. In San Luis Obispo County, the fraud rate is less than 1%. The same thing in Ventura County, the same thing in San Bernardino County.

CAVANAUGH: So did you compile these statistics from the District Attorney’s offices in those various counties?

SHARMA: Some from the District Attorneys’ offices, some from the counties. The overall state figures, I got from the California Department of Health Services which is responsible for investigating these complaints against IHSS.

CAVANAUGH: And what does the San Diego District Attorney’s office say about how fraudulent In-Home Supportive Services is?

SHARMA: Well, he – You know, he tried to – basically he said that the reason there’s a difference between the number of prosecutions and the amount of fraud that they believe is within the system is because there are poor management controls. But here’s more of what he had to say.

MICHALE GROSCH (sp) (San Diego Deputy District Attorney): What’s really been lacking in the program is the ability to hold people accountable and to investigate these cases and turn them into prosecutable cases which is why I think you’ve seen a disparity between the amount of fraud that we know and believe is in the system and the number of cases of prosecution for them.

SHARMA: And, Maureen, that was San Diego Deputy District Attorney Michael Grosch and he is the head of the Economic Fraud Crimes – Economic Crimes unit within the DA’s office.

CAVANAUGH: So where did the governor get this 25% figure?

SHARMA: It is not clear. It is not clear. I think that it was based on a variety of estimates that were given to him by deputy district attorneys.

CAVANAUGH: You spoke with a few social service representatives around the state who were quite agitated about the governor’s claim of widespread fraud in In-Home Supportive Services. Tell us about that.

SHARMA: Well, first I think it’s important to point out that the head of the California Department of Social Services, which oversees IHSS, you know, I think he believes that the 25% fraud rate is not exaggerated. I think he believes there is merit to what the governor has said. But if you talk to individual counties, they say that, yes, there is fraud within every government program, but the degree of fraud that the – that Governor Schwarzenegger is claiming is rubbish and that the allegations were made to justify the deep cuts that were made to the program. This is what Lee Collins, Director of the San Luis Obispo County Department of Social Services had to say about the fraud allegations.

LEE COLLINS (Director, Department of Social Services, San Luis Obispo County): If you’re going to cut a program to save money, then what you say is we’re cutting this program to save money. But what they’ve tried to do is to have their cake and eat it, too. To say we’re cutting the program because we think there’s a lot of fraud, that may buy some political points but I think it is its own brand of fraud, and it’s the worst, most cynical, ugly kind of politics because of who they’re targeting. These are, by definition, disabled persons who, without the kind of help that is provided under this program, would be placed at some kind of risk. It’s too easy a target to pick on folks who don’t have the ability to fight back.

CAVANAUGH: Now, we get – we move from the allegations of fraud to the people who will actually be affected by these cuts. And I’m wondering, Amita, how many people will be affected if, indeed, these cuts do go through and how will they be affected?

SHARMA: Well, 460,000 people in the program statewide, 100,000 people stand to be affected in some way, either by seeing their services diminished or by losing them altogether. In San Diego County, 25,000 people receive the care; 8,000 will be affected. 2,000 stand to lose the services entirely. And when we say how will they be affected, you know, I interviewed a woman who – her name is Nicanora Montenegro, she takes care of her 77 year old mother who has heart disease and diabetes and must use a walker in order to get around. She also takes care of her 40 year old sister who’s autistic and has the mental capacity of a 4 year old. These two women cannot take care of themselves. When I posed this question to her, you know, what will happen – She does stand to lose all of the money if the cuts take effect. Here’s what she had to say.

NICANORA MONTENEGRO (Familial Caregiver): What would happen to them? They will rot, they will smell and they would not be able to eat properly. Who’s going to clean the house? Who’s going to clean the toilet? Who’s going to help them bathe? That would be very difficult. I mean, with this situation, I’m already financially burdened and if that is removed, what will happen? What will they do?

CAVANAUGH: Why is she threatened to lose all of her benefits? Has the amount that a person is able to earn gone up? I mean, why is it – why would she fit into the criteria of losing all of her benefits?

SHARMA: Well, I think the way the cuts are being decided is, you know, they have a scale and, you know, if the people who are receiving the care fall – there’s a certain index that they have to meet and if they don’t meet that index then she would stand to lose the services but…

CAVANAUGH: Yes, go ahead.

SHARMA: …the point being is that she qualified for them before the cuts were made.

CAVANAUGH: Exactly. Now I’m wondering, what – what, indeed, are there any other places that people can turn if these cuts go through?

SHARMA: Well, you know, I spoke with the Department of Social Services spokeswoman Lizelda Lopez and I asked her this question and she said, you know, we’re hoping that friends and family will come forward and help these people out. We’re hoping that the community will help these people out. We’re hoping that churches will help these people out. If that doesn’t happen, you know, there is the likelihood that these people will end up being institutionalized, which will cost the state more. Right now, it costs about $12,000 per person to be – to receive In-Home Supportive Services a year. If they’re institutionalized, it can cost up to $55,000 a year. And, again, this is a cost that will be picked up by taxpayers.

CAVANAUGH: Now are there efforts underway to oversee this program a little bit better? Because even though there is not the kind of fraud, at least according to your report, that the governor alleges, there is some fraud, and because most of the caregivers are family or friends, there is that potential for fraud. So what is the state going to do to tighten that up a little bit?

SHARMA: Well, actually starting today, all new caregivers are going to be required to go through criminal background checks that are beyond the county in which they intend to serve. They will also have to put their fingerprints as well as the care recipients, will have to put their fingerprints on time sheets to ensure that the care, the hours of care, that they report are being provided are actually being provided. And this is going to work in such a way that if people who are checking the time sheets see that these fingerprints have been smudged over a period of time, then that’s a tipoff and maybe we ought to do a random check here. Maybe we need to look further into the possibility of fraud.

CAVANAUGH: Now as the governor said, he wanted to make this a shared sacrifice, these cuts and so forth. But as your report reveals, Amita, this is targeting people who really don’t have much to begin with so I wonder if there’s a sense that in highlighting this, it just really sort of makes the whole area – puts the whole idea of shared sacrifice in a sort of a question mark. Because the people who are really being asked to sacrifice don’t have much to sacrifice to begin with.

SHARMA: They don’t have much to sacrifice. I think that’s the point of a lawsuit that’s going to be filed today in federal court by the Disability Rights Coalition as well as two unions who represent some of the workers in this program. And they’re alleging that the state is really putting these people at risk because they will not be able to stay in their home and they will have to be institutionalized. And they’re also alleging that this violates the Americans With Disabilities Act.

CAVANAUGH: Now these cuts were supposed to go into effect today. Is the lawsuit prolonging that? When is this going to go into effect?

SHARMA: Well, actually the cuts will take affect – they – as you said, they were supposed to take effect today but they will – They’ve been delayed by one month. They’re supposed to now take effect November first. As to whether the lawsuit is going to delay the cuts, I’m not sure. That depends on the court.

CAVANAUGH: Well, thank you so much, Amita. I really appreciate it.

SHARMA: Thank you for having me, Maureen.

CAVANAUGH: We’ve been speaking with KPBS investigative reporter Amita Sharma. I want to let you know, you can hear Amita’s feature reports online at, and if you want to post a comment about what you’ve heard on These Days, Now, coming up, your questions for KPBS General Manager Tom Karlo. That’s when we return in just a few moments here on KPBS.


San Diego News Now podcast branding

San Diego news; when you want it, where you want it. Get local stories on politics, education, health, environment, the border and more. New episodes are ready weekday mornings. Hosted by Anica Colbert and produced by KPBS, San Diego and the Imperial County's NPR and PBS station.

  • Need help keeping up with the news that matters most? Get the day's top news — ranging from local to international — straight to your inbox each weekday morning.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Want more KPBS news?
Find us on Twitter and Facebook, or sign up for our newsletters.

To view PDF documents, Download Acrobat Reader.