State plan requirements: A State plan under title I, IV-A, X, XIV, or XVI of the Social Security Act must provide:

1. (a) That the State agency will establish and maintain:

   1. (1) Methods and criteria for identifying situations in which a question of fraud in the program may exist, and

   2. (2) Procedures developed in cooperation with the State's legal authorities for referring to law enforcement officials situations in which there is valid reason to suspect that fraud has been practiced.

      The definition of fraud for purposes of this section will be determined in accordance with State law.

2. (b) For methods of investigation of situations which there is a question of fraud, that do not infringe on the legal rights of persons involved and are consistent with the principles recognized as affording due process of law.
3. (c) For the designation of official position(s) responsible for referral of situations involving suspected fraud to the proper authorities.

[36 FR 3869, Feb. 27, 1971]