A Colorado program designed to help low-income elderly and disabled residents pay their property taxes and heating bills has been underpaying qualified applicants while paying others who aren’t eligible for the program, according to a new state audit.
The program has also flat-out denied benefits to applicants who should have been approved.
Forty percent of the applications reviewed by auditors — some 7,000 participants in the program — were paid less than they were qualified to receive, resulting in more than $165,000 in underpayments. More than 100 applicants who qualified for the program were denied altogether, meaning they didn’t receive any assistance for heating costs and property tax bills. That’s an average loss of $370 per person.
And nearly 500 applications that should have been denied rebates were approved instead, resulting in more than $200,000 in payments to people who didn’t qualify for them.
The problem, according to the audit, stemmed from income-calculating software that wasn’t updated to account for changes in income thresholds, inflation and costs of living increases. The Department of Revenue’s Taxpayer Services division, which runs the program, said it has corrected the problem and will ensure the software is updated properly in the future.
Though the dollar amounts aren’t particularly huge, auditors noted, rebates “represent a significant financial benefit to program participants,” who earn less than $12,481 for individuals and $16,476 for married couples.
Some applicants were wrongly denied rebates for reasons that auditors said were capricious. Some were denied because the address on their applications didn’t match that on motor vehicle records or because their expenses exceeded their incomes. Neither is a valid reason under Colorado statute to deny the benefits.
Auditors also found that some department staff denied applications based on a person’s heating source, wrongly approving only those who use natural gas to heat their homes. There is no such requirement in the law.
“[B]ecause Department staff improperly disallowed participants who claimed heat sources other than gas from applying,” the audit reads, “some applicants may not have applied for up to $192 in heat rebates they could have received and may not apply for heating rebates in future years because of the incorrect information they received.”
The audit found that the program was so poorly administered that it recommended moving it from the Department of Revenue to the Department of Human Services, which has more expertise in administering complicated programs. That, however, would incur “significant” upfront costs and require action by the state legislature.
Both agencies agreed to explore the possibility.
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