Tracking Welfare Overpayments

Eighteen California counties have signed on to an automated welfare overpayment tracking and collection system.

by / June 30, 1996
In 1986, the computer system -- used by the Ventura County Public Social Services Agency to collect welfare overpayments -- crashed.

This event marked the beginning of a long and frustrating search for a system that could efficiently recoup overpayments for the county in the Aid to Families with Dependent Children (AFDC), Food Stamps, Foster Care and General Relief programs.

No other county had a system that could be modified for use by Ventura. Bill Armstrong, the agency's system administrator for fiscal collections, searched for solutions at technology conferences. All of the software packages he explored would have required extensive programming changes to minimally meet the unique needs of welfare overpayment collections. In the meantime, the agency limped along with a manual system.

Finally in 1993, Public Social Services and the Treasurer/Tax Collector's Office agreed to work with the Information Systems Department to develop a collections system that could meet their respective needs. When it was determined that their needs were too dissimilar, separate systems were developed.

Staff members from both Information Systems and Public Social Services developed the Ventura Automated Collections System (VACS) with approximately $250,000 in federal, state and county funds. The system, which automated the maintenance of much of the information necessary to pursue the collection of receivables resulting from welfare overpayments, went online in November 1994.

VACS provides a comprehensive view of debt status, including case, debtor and payment plan information. The system also provides complete information about financial and collection activity regarding overpayment debts. A collection officer work loading function is incorporated to notify collectors and other users regarding priority actions to be taken in pursuing the collection of debts.

The system produces demand for payment letters in both English and Spanish and monthly statements to clients and deposit reports reflecting financial activity which must be periodically reported to external accounting systems. For management, the system provides workload reports with a graphical view of collection activity performed by system users.

Armstrong was actually co-located in the Information Systems Department for much of the project's 12-month development period and created most of its standard reports. This arrangement provided him with the knowledge and insight to function effectively as Public Social Services' VACS administrator and first line of support.

In addition to Armstrong, three Information Systems staff developers and a project manager were assigned full time to the project. Jo Edna Smith, Public Social Services' fiscal officer, served as the end user project manager. An outside consultant was also utilized to assist in defining requirements and ensuring that the delivered product met those requirements.

VACS has dramatically increased the amount of overpayments collected by Ventura County, according to Public Social Services Agency Chief Deputy Director Barbara J. Fitzgerald. Since the first automated statements were sent in April 1995, collections have increased by 23 percent.

"Ventura County accounted for all collections activity manually during the eight years from the time the previous system became completely dysfunctional to the time VACS came online," Fitzgerald said. "So far, only 42 percent of the active cases have been entered into the system. As more cases are entered into the system, monthly collections payments should continue to increase."

Designed from the start with the goal of multicounty use, VACS is being marketed by the Information Systems Department to other California counties.

With the help and strong backing of the state Department of Social Services Fraud Bureau, the California VACS Association (CVA), a county consortium, was formed in August, 1995. The association currently consists of 18 counties. Information Systems serves as contractor to the association, maintaining and upgrading a single, common version of VACS software for all CVA counties.

An automated interface between the Statewide Automated Welfare System is currently under development. Automated interfaces between VACS and the California Case Data System have already been developed, including one interface for converting historical data and another for ongoing data.

The CVA has budgeted the equivalent of one full-time position in the Ventura County Information Systems Department to provide ongoing maintenance, enhancements and telephone support for all 18 counties. The position is comprised of multiple individuals, most of whom helped develop the original system.

This support level will be reviewed annually by CVA. The cost of this support ranges from $80,000 to $90,000, including salary, benefits, department and county overhead costs.

Counties join CVA by signing a standard memorandum of agreement developed by the charter members. The cost of membership covers ongoing maintenance, enhancements and telephone support provided by Ventura County.

The cost for the first year of CVA membership is $7,500, including installation, and $2,500 the second year. The cost was determined by dividing the number of anticipated members into the annual cost of the full-time position. The cost for the third and subsequent years will be determined in a similar manner and is anticipated to decrease significantly as the number of members increase.

San Benito was the first CVA member to implement VACS, and Marta Denice, administrative services manager of the San Benito County Health and Human Services Agency, is the association's first chair. Denice learned about VACS when Ventura County demonstrated it at a County Welfare Directors Association Fiscal Committee meeting.

"We see VACS as the means to increase the effectiveness of overpayment collections," she explained. "San Benito County does not have data processing staff available to provide the technical expertise necessary to independently develop an overpayment collection system. VACS allows San Benito County to have an effective system."

Denice, who described VACS as "user friendly," emphasized that tracking welfare overpayments is an extremely complicated process. AFDC, Food Stamps and General Assistance not only have regulatory differences, there are different types of overpayments: administrative, intentional program violation and inadvertent household error. There also are different methods for payment: cash collection, grant adjustment (AFDC only) and allotment reduction (Food Stamps only).

"In the private sector, goods or services are purchased by customers," she said. "The customer is billed for the goods or service. When the customer makes a payment on the bill, payment is applied and the amount owed by the customer is reduced or eliminated. If the customer does not make payment, collection procedures begin to recoup the amount owed for the purchase of the goods or service.

"Imagine the complexity in the private sector if payment collection procedures differed for every purchase made by a customer. This is the reality in recouping AFDC/FS/GA overpayments. Remember that one client can have more than one overpayment of more than one type in more than one assistance program."

J. Matthew Carroll is division manager of applications development in the Ventura County Information Systems Department.


In Ventura County, VACS runs on a combination of LAN-attached, Microsoft Windows-based personal computers and a central IBM RS-6000 database server hosting the county's central Sybase database product. VACS data are stored and updated centrally on the RS-6000/Sybase database service, while the actual application modules/executable files reside on the local personal computers.

California VACS Association (CVA) members have the choice of implementing VACS in any environment supporting Microsoft Windows and Sybase's relational database product. This ranges from a stand-alone personal computer running Windows NT to a Novell or Windows NT-Server LAN to a UNIX-based database server, such as in the case in Ventura County. Which hardware configuration a county selects depends on the volume of debts and anticipated number of simultaneous users.

Each member is currently independent, although Ventura County provides the option of hosting the databases of other counties at its data center. In the near future, a central database at the state Health and Welfare Agency Data Center in Sacramento may also be available to counties not wishing to support their own database environment for VACS.