The inquiry began with a tip that the Puerto Rican Action Board, a social service agency in Middlesex County, was "cutting corners" to meet enrollment quotas.
TRENTON -- A popular program that helps poor people pay their heating bills is easy to cheat because the state department running it doesn't keep close enough watch on the private agencies doling out the benefits, according to a report by the Office of the State Comptroller.
The state agency which oversees the federal Low Income Home Energy Assistance Program, or LIHEAP, refuted many of the comptroller conclusions, which are "based on a statistically invalid level of testing."
The $3 billion federal program spent $126 million to help New Jersey recipients in 2015, according to the report. The state Department of Community Affairs disburses the money to 17 private agencies who screen the applicants. People are expected to demonstrate their eligibility by providing their social security numbers and documents attesting to their income.
Investigators found:
- Some applicants submitted phony social security numbers or misleading income information. One social security number was for a dead person, and it had been used in 25 different applications.
- The state had used a quota system that required private agencies to approve three-quarters of all applicants. The comptroller notified the federal government of the quotas which have since ended.
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A manual explaining the rules of the program is outdated.
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The state "does not provide sufficient training, guidance or support" to the private agencies screening the applicants.
"People in need depend on LIHEAP to help pay for heat during cold weather. The weaknesses we discovered in LIHEAP need to be addressed so we ensure this vital funding is properly provided to those it is intended to help," said State Comptroller Philip James Degnan.
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The comptroller launched the inquiry into the program after it got a tip that the Puerto Rican Action Board, a private, nonprofit social service agency in Middlesex County, was "cutting corners" to enrollment quotas. Some applicants received benefit without having to documenting their income, the comptroller found.
The board's executive director, Jose Montesm declined to comment until he had more time to review the report, which he said he received Thursday.
The files of six people whom the comptroller determined had filed fraudulent applications were referred to the state Division of Criminal Justice for prosecution. One of the six includes a state worker who hid her annual salary of $90,000, according to the report.
The comptroller also ordered the state review the files of 34 people to verify their information.
Tammori Petty, spokeswoman for the Department of Community Affairs, defended the state's oversight of LIHEAP. Three training sessions were provided for all of the participating agencies, last year, and the updates to the manual are sent regularly she said.
The comptroller found just 54 instances "where social security numbers could not be verified at a single application agency," Petty said.
"DCA provided heating benefits to 292,430 applicants in FY2014. A finding of 54 discrepancies in a single agency with a non-random sampling methodology against hundreds of thousands of successful applications is no grounds for conclusions about program-wide susceptibility to fraud," she said.
Renters and homeowners may apply for LIHEAP assistance from Oct. 1 through April 30, 2017, through a network of local agencies. For more information or to apply for LIHEAP assistance, call 800-510-3102 or visit energyassistance.nj.gov.
Susan K. Livio may be reached at slivio@njadvancemedia.com. Follow her on Twitter @SusanKLivio. Find NJ.com Politics on Facebook.