Welfare Programs:

Ineffective Federal Oversight Permits Costly Automated System Problems

IMTEC-92-29: Published: May 27, 1992. Publicly Released: Jun 29, 1992.

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Pursuant to a congressional request, GAO assessed the effectiveness of the Departments of Health and Human Services' (HHS) and Agriculture's (USDA) oversight of states' efforts to automate eligibility determinations for the Aid to Families with Dependent Children (AFDC), Medicaid, and Food Stamp programs.

GAO found that: (1) Congress authorized HHS and USDA to pay most of states' costs to acquire and operate automated eligibility determination systems to help them reduce errors and process applications faster; (2) the federal government has provided more than $950 million to states to develop and operate these systems; (3) although numerous federal laws and regulations require HHS and USDA to monitor states' development of automated eligibility systems, neither agency has effectively monitored the states' systems; (4) the agencies have conducted only limited reviews of states' initial or updated system plans, have rarely conducted on-site reviews, and have not assessed key system development documents; (5) inadequate monitoring has allowed several states to develop costly integrated systems that did not work or did not meet the requirements; (6) although both HHS and USDA recognize that their monitoring needs improvement, the agencies cite their belief that they should not have a dominant oversight role and insufficient staffing as barriers to better monitoring; (7) HHS and USDA do not consider the assessment of states' operational systems a high priority, even though the agencies do not know whether state systems are providing the projected benefits; and (8) neither agency knew whether states' upgrades of automated systems produced the expected results.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: The Secretaries of Health and Human Services and Agriculture directed administering agencies for AFDC, Medicaid, and food stamps to work with OMB, state representatives, and the National Association of State IRM Offices to develop better ways to monitor development of state systems.

    Recommendation: The Secretaries of Health and Human Services and Agriculture should direct the administering agencies for AFDC, Medicaid, and Food Stamps to develop an interagency agreement that calls for effective, complete, and coordinated monitoring of each state's system under development for each phase of the system development process, including: (1) progress assessments; (2) evaluations of key system development documents; (3) on-site inspections; and (4) determinations of whether full federal funding is warranted on the basis of program and financial risk assessments.

    Agency Affected: Department of Agriculture

  2. Status: Closed - Implemented

    Comments: The Secretaries of Health and Human Services and Agriculture directed administering agencies for AFDC, Medicaid, and food stamps to work with OMB, state representatives, and the National Association of State IRM Offices to develop better ways to monitor development of state systems.

    Recommendation: The Secretaries of Health and Human Services and Agriculture should direct the administering agencies for AFDC, Medicaid, and Food Stamps to develop an interagency agreement that calls for effective, complete, and coordinated monitoring of each state's system under development for each phase of the system development process, including: (1) progress assessments; (2) evaluations of key system development documents; (3) on-site inspections; and (4) determinations of whether full federal funding is warranted on the basis of program and financial risk assessments.

    Agency Affected: Department of Health and Human Services

  3. Status: Closed - Implemented

    Comments: The Department did not agree to develop an interagency agreement but stated that it would take other actions to ensure that states' systems are cost-effective, such as requiring states to report cost and benefit data when systems become operational. The Department will also evaluate whether predicted benefits have been realized.

    Recommendation: The Secretaries of Health and Human Services and Agriculture should direct the administering agencies for AFDC, Medicaid, and Food Stamps to develop an interagency agreement that calls for evaluating whether predicted benefits have been realized for states' operational automated systems. In those instances where the actual benefits achieved are significantly less than originally projected and lower than total project costs, a reduction of further federal funding of the state's operational system should be considered until the state demonstrates how its system is cost-beneficial.

    Agency Affected: Department of Agriculture

  4. Status: Closed - Implemented

    Comments: HHS disagreed with this recommendation, stating that, for those systems failing to achieve projected cost-benefit ratios by a significant margin, it would continue working with the state to overcome obstacles to the efficient and effective use of automation. However, it has agreed to evaluate whether predicted benefits have been realized for those states having operational automated systems.

    Recommendation: The Secretaries of Health and Human Services and Agriculture should direct the administering agencies for AFDC, Medicaid, and Food Stamps to develop an interagency agreement that calls for evaluating whether predicted benefits have been realized for states' operational automated systems. In those instances where the actual benefits achieved are significantly less than originally projected and lower than total project costs, a reduction of further federal funding of the state's operational system should be considered until the state demonstrates how its system is cost-beneficial.

    Agency Affected: Department of Health and Human Services

  5. Status: Closed - Implemented

    Comments: USDA disagreed with the recommendation because it believed that establishing a single program office to implement the recommended interagency agreement was not administratively viable. However, the Department did form a joint task force with HHS to address and implement needed changes.

    Recommendation: To implement the interagency agreement efficiently and effectively, the Secretaries of Health and Human Services and Agriculture should establish a joint program office to provide leadership and management of the oversight of state automated welfare systems. Such an office, to be jointly funded by HHS and USDA, would have the responsibility, authority, and accountability for overseeing the development and implementation of states' welfare systems and determining whether such systems are providing anticipated benefits. Further, to help ensure that these responsibilities be effectively accomplished, the joint office should be given the authority to hire or contract for the technical expertise necessary to monitor the development and operation of automated welfare systems.

    Agency Affected: Department of Agriculture

  6. Status: Closed - Implemented

    Comments: The Department generally disagreed with the recommendation. HHS stated that implementation of the recommendation would create further inefficiencies in the system review process. However, HHS did state that it would reestablish an interagency task force with USDA to improve coordination.

    Recommendation: To implement the interagency agreement efficiently and effectively, the Secretaries of Health and Human Services and Agriculture should establish a joint program office to provide leadership and management of the oversight of state automated welfare systems. Such an office, to be jointly funded by HHS and USDA, would have the responsibility, authority, and accountability for overseeing the development and implementation of states' welfare systems and determining whether such systems are providing anticipated benefits. Further, to help ensure that these responsibilities be effectively accomplished, the joint office should be given the authority to hire or contract for the technical expertise necessary to monitor the development and operation of automated welfare systems.

    Agency Affected: Department of Health and Human Services

 

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