**Question 1. When can I close out my Advance Planning Document (APD)
for a statewide child support system project?**

**Answer 1.** In brief, three factors affect whether a state must
continue to submit Annual APD Updates (AAPDU), and when necessary \"As
Needed\" APD for its statewide child support Personal Responsibility and
Work Opportunity Reconciliation Act of 1996 (PRWORA) automation
projects. These are:

1)  whether or not the State Automated Child Support Enforcement Systems
    (ACSES) is federally, unconditionally, certified as meeting the
    automation requirements prescribed by the PRWORA legislation,
    implementing regulations, and guidance documents incorporated in
    regulation by reference;

2)  whether any outstanding, significant software development efforts,
    projects, modules, activities and/or significant procurement actions
    remain to be completed as described in and funded through the
    respective AAPDU and,

3)  whether or not the State ACSES project has achieved cost/benefit
    "break-even" as quantified in the cost/benefit analysis presented in
    the AAPDU, and verified by the Federal agency;.

**Question 2. Relative to the \"break-even\" requirement for
cost/benefit analyses, my state initially developed a functional model
with intangible as well as tangible benefits that are now difficult to
quantify. Is there any easier way to demonstrate that my project has
reached break-even?**

**Answer 2.** In order to assist states in the historically difficult
task of measuring quantifiable benefits accruing to an automation
project as complex as those in the child support enforcement program,
our Office issued an alternative approach to conducting a cost/benefit
analysis. It is called the *Revenue Stream Model*. This second model,
different from the standard approach referred to as the *Functional
Model*, defined in ACF and OCSE guidance over the years, presents a
methodology found to be significantly easier to employ. Explanation on
the application of the *Revenue Stream Model*, as well as detailed
guidance on use of the *Functional Model,* can be found in OCSE's
publication [Companion Guide 3: Cost/Benefit Analysis Illustrated for
Child Support Enforcement Systems,]{.underline} 48 pp., September 2000.
In addition, automated tools supporting the use and production of these
two cost/benefit analysis models, including help guides, as revised in
March 2001, are available on OCSE's State and Tribal Systems' web domain
at: [http://www.acf.dhhs.gov/programs/cse
/stsys/!cse.htm](http://www.acf.dhhs.gov/programs/cse /stsys/!cse.htm).\
\
Again, a state's submission of its cost/benefit analysis within the
AAPDU must be approved by OCSE. An approvable cost/benefit analysis is
one that is fully documented, arithmetically measurable and repeatable,
and presents a reasonable mathematical argument that the basic
requirement of having achieved break-even in costs-to-benefits ratio is
met. Upon submission and acceptance by OCSE of such a cost/benefit
analysis, the state can subsequently consider whether to discontinue
AAPDU submissions for its ACSES project.

**Question 3. What does OCSE mean by outstanding software projects?**

**Answer 3.** The second prerequisite to close-out of a state's ACSES
project AAPDU is whether any outstanding, significant software
development efforts, projects, modules, activities and/or significant
procurement actions remain to be completed as described in and funded
through the AAPDU. Examples of these types of outstanding significant
events and actions are:

-   An outstanding, unresolved reconsideration request by the state
    under Action Transmittal OSSP-00-01, related to Federal disapproval
    of a procurement, including the resultant disallowance of Federal
    Financial Participation (FFP) in the contract's cost by the
    ACF/OCSE.

-   Significant application software changes are defined by three basic
    characteristics: level of effort, cost, and risk. These include
    software efforts like the replacement of an ACSES enforcement module
    or its document generation module, the development of significant,
    new electronic interfaces, the replacement of a character-based user
    interface with a graphical user interface (GUI), or migration of the
    main software application system from a mainframe-based platform to
    a client-server architecture. Because these types of software
    development efforts are most often labor intensive they are also
    usually costly endeavors (e.g., above the regular rate threshold for
    FFP). The complexity of such efforts, including the accompanying
    heightened risk, weigh against close-out of the APD. Certainly, the
    potential for cost or schedule overruns is a real risk factor due to
    the size and scope of such efforts. Other risks, such as
    interruptions of service of the existing on-line application being
    enhanced, also must be considered. For these reasons, the need for
    proactive Federal review and oversight dictates a state's APD remain
    open.

-   Outstanding federal PRWORA and/or FSA88 certification findings that
    have not been resolved unconditionally; and,

-   Outstanding procurement efforts (hardware, software, and/or
    services) as identified in the AAPDU for which final procurement
    costs (based on final contract execution) have yet to be determined.

Question 4. Could some of the software activities above be considered
"routine maintenance"?

**Answer 4.** Rarely. Routine software maintenance activities normally
reflect efforts not nearly as labor intensive, costly, or risk laden as
those discussed above in Answer 3. Examples of routine software
maintenance include: revising or creating new reports, making limited
data element/data base changes, making minor alterations to data input
and display screen designs, upgrading hardware, operating system and
Commercial-Off-The-Shelf (COTS) software, etc. If maintenance efforts,
similar in nature to those above, are the only activities that remain to
be performed in a state's ACSES project, and their associated
acquisitions are under the regulatory thresholds for submission of
regular rate FFP, then a close-out APD may be submitted to ACF/OCSE.

**Question 5. What is the format for a close-out request?**

**Answer 5.** The format and content of a final or "close-out" APD is
essentially the same as that described by Federal regulations and
guidance documents incorporated in regulation by reference, for any
AAPDU. The term "close-out" connotes only that its respective submission
represents the last APD required to fully and finally describe all past
project activities, cost, benefits, and functional-compliance with
applicable Federal certification requirements (PRWORA and FSA88). All
informational requirements for a fully approvable, ongoing ACSES project
APD must also be presented in the project's final "close-out" APD.

+----------+--------------+-------+-----------------------------------+
| **Requ   | **Regulatory | **    | **Information to Include --       |
| irements | Citation(s)  | Requi | Summary/Optional**                |
| for      | From\        | red** |                                   |
| "Cl      | 45 CFR       |       |                                   |
| ose-out" | 95.605       | *     |                                   |
| APDU**   | "Advance     | *or** |                                   |
|          | Planning     |       |                                   |
|          | Document     | **    |                                   |
|          | Update"**    | Optio |                                   |
|          |              | nal** |                                   |
+----------+--------------+-------+-----------------------------------+
| E        | None         | Opt   | Though not required, it is        |
| xecutive |              | ional | helpful for Federal reviewers to  |
| Summary  |              |       | have a summary in the APD of the  |
|          |              |       | significant project milestones    |
|          |              |       | achieved or requests being made.  |
+----------+--------------+-------+-----------------------------------+
| Project  | Project      | Req   | This section provides information |
| Ma       | status       | uired | on project tasks and milestones   |
| nagement |              |       | for which Federal funding has     |
| Plan     | 95.6         |       | been approved. For a "Close-out   |
|          | 05(3)(a)(ii) |       | APD", it is assumed all project   |
|          |              |       | tasks and milestones are now      |
|          | Deliverables |       | being reported as complete. For   |
|          |              |       | tasks reported in past APD's as   |
|          | 95.60        |       | completed, a brief statement to   |
|          | 5(3)(a)(iii) |       | that effect, or references to     |
|          |              |       | where in prior APD documents such |
|          | Schedule     |       | information may be found, is      |
|          |              |       | acceptable. For those remaining   |
|          | 95.6         |       | tasks finally being reported as   |
|          | 05(3)(a)(iv) |       | complete under this "Close-out"   |
|          |              |       | APD, a brief statement to that    |
|          |              |       | effect, including any             |
|          |              |       | deliverables produced, with a     |
|          |              |       | schedule showing when each        |
|          |              |       | outstanding task or milestone was |
|          |              |       | finished, is acceptable.          |
+----------+--------------+-------+-----------------------------------+
| Budget   | Expenditures | Req   | In a "Close-out" APD, this        |
|          |              | uired | section must essentially          |
|          | 95.605(a)(v) |       | reconcile all project costs from  |
|          |              |       | planning through full statewide   |
|          | Cost         |       | installation and final            |
|          | Allocation   |       | certification of the system. This |
|          |              |       | budget reconciliation will        |
|          | 9            |       | balance all approved Federal      |
|          | 5.605(a)(vi) |       | funding with all final, actual    |
|          |              |       | project expenditures. For         |
|          |              |       | tracking and consistency, data    |
|          |              |       | should be presented by Federal    |
|          |              |       | fiscal quarter, summed by Federal |
|          |              |       | fiscal year, and reflect all of   |
|          |              |       | the line items of cost (e.g.,     |
|          |              |       | staff, contracts, travel,         |
|          |              |       | training, operations, etc.) as    |
|          |              |       | presented and approved in         |
|          |              |       | previous Annual APD Updates. Note |
|          |              |       | that if any changes occurred to   |
|          |              |       | any approved cost allocation      |
|          |              |       | methodologies since the last      |
|          |              |       | approved APD, a narrative         |
|          |              |       | description of the change         |
|          |              |       | including any resulting budget    |
|          |              |       | implications, is also needed.     |
+----------+--------------+-------+-----------------------------------+
| Cost     | 95           | Req   | In a "Close-out" APD, this        |
| /Benefit | .605(a)(vii) | uired | section provides the final CBA    |
| Analysis |              |       | that establishes achievement of   |
| (CBA)    |              |       | the project's break-even point.   |
|          |              |       | Use of either the "Functional" or |
|          |              |       | "Revenue Stream" model formats is |
|          |              |       | acceptable.                       |
+----------+--------------+-------+-----------------------------------+

A few clarifications as to the breadth and depth of the information to
be provided in such a "close-out" APD follow:

1.  The project management plan in the AAPDU must summarize, in the same
    manner as defined in OCSE's APD guidance document, [Addendum to
    State Systems APD Guide for Child Support Enforcement
    Systems]{.underline}, 22 pp., March 1999, any outstanding ACSES
    project planning, design, development, test and/or implementation
    activities not cited as complete in past AAPDU's.

2.  The APD's budget must present all past, actual and expended, ACSES
    project costs from planning through ongoing operations and
    maintenance from the earlier of either Federal Fiscal Year (FFY)
    1991 or project inception, through to the end of the FFY in which
    the APD is being submitted. The beginning of FFY 1991 is usually
    chosen as the starting point for tracking state project costs due to
    the fact that all states were required by federal law and
    regulations to submit a full, initial IAPD no later than July 1,
    1991, reflecting the design, development and implementation of a
    statewide ACSES. When planning for such an effort is taken into
    consideration, the start of FFY 1991 becomes a reasonable point from
    which to begin budgeting. In some states, however, meeting the
    requirements of the FSA 88 meant enhancing an already operational
    system, thus a starting point earlier than FFY 1991 may be
    applicable.

3.  The AAPDU's cost/benefit analysis (CBA), as previously described,
    must be complete and thoroughly address all costs (as presented in
    the budget section) and quantitative and qualitative benefits data,
    including the following:

-   While not mandatory, OCSE suggests that a narrative summary be
    included providing examples of the quantitative (ex: increased
    collections year-to-year in dollars/percentages, collection
    increases by functional process/automated enforcement remedy, cost
    savings in reduced operations expenses, etc.,) and qualitative (i.e.
    user friendly, customer service, serves management needs for
    accessible information, etc.,) benefits attributable to ACSES
    automation. The narrative summary must also present a calculation
    presenting the total benefits-to-cost ratio for the full lifecycle
    of the ACSES based on the CBA data spreadsheet/tables below (this
    ratio presents a measure of cost-effectiveness of the automation) as
    well as identifying the month and year that costs-to-benefits
    breakeven was achieved;

```{=html}
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```
-   Presentation of the spreadsheets/tables that comprise a cost/benefit
    analysis. Please note that the cost/benefit analysis must calculate
    all actual and estimated costs and benefits attributable to the
    ACSES from the end of the "base year" (fiscal year preceding
    statewide ACSES operations) through the years in which the state has
    committed in the APD to operationally employ the ACSES (normally
    seven to ten years of operation.) This is addressed in the Revenue
    Stream Model mentioned in Question and Answer 2. ; and,

-   Presentation of the cost/benefit analysis break-even chart. This is
    also included in the Revenue Stream Model addressed in Question and
    Answer 2.

**Question 6. Can I obtain help from OCSE in developing a revenue stream
model, even if I choose to keep the project open?**

**Answer 6.** Yes. Explanation on the use of the *Revenue Stream Model*
and *Functional Model,* as well as the overall requirements for
approvable CBA's can be found in OCSE's publication, [Companion Guide 3:
Cost/Benefit Analysis Illustrated for Child Support Enforcement
Systems]{.underline}, 48 pp., September 2000.

OCSE has sponsored several training sessions on the use of the revenue
stream model for cost/benefit analysis. If there is sufficient interest,
we will schedule additional training sessions.

**Question 7. Why should I consider keeping my APD open, once it
qualifies for close-out?**

**Answer 7.** Careful consideration should be given to the determination
as to whether an APD should be closed. Obviously, submission of a final
or "close-out" APD for the ACSES project relieves the state of future
Federal reporting requirements relative to the ACSES. On the other hand,
rarely do such systems remain static in their operation, construction,
architecture or functional capabilities. Systems as complex and as
integral to successful operations as those mandated in the child support
enforcement program are extremely dynamic, as the power and capabilities
of hardware and software platforms continue to exponentially increase.
Likewise, new, enhanced, and increasingly complex but also increasingly
robust operating systems and programming languages, databases and tools
arrive with such frequency that all too often a computing platform has
little option but enhancement and upgrade to avoid architectural
obsolescence.

User communities also play an important role in the decisions affecting
ACSES enhancement and upgrade. Many of today's statewide ACSES rely on
platforms that employ character-based user interfaces that rely on
legacy programming languages.  It is increasingly difficult to find
qualified staff to maintain or enhance these interfaces, and there is
often little or no built-in support for newer, emerging technologies.
Also, our ACSES user communities today are more computer literate than
ever before, quite often using more advanced graphical operating systems
and applications than anything available in their business environments.
Add to that the accumulated knowledge these users now have with their
ACSES, which has enabled them to identify functional deficiencies and
needed operational enhancements, and we find numerous arguments of the
need for cyclical enhancements to our automated systems.

These enhancements and upgrades, however, on the scale of a statewide
ACSES, are rarely anything but complex, expensive, labor-intensive and
time-consuming. Federal funding thresholds for determining the need for
submission of an APD today, even at the regular rate of FFP, currently
stand at \$5 million. Such a threshold has in recent years proven to be
too low to avoid APD submissions for most, if not all, significant
enhancement/upgrade efforts to statewide ACSES. ACF has met with
decision makers from Food and Nutrition Services and Centers for
Medicare and Medicaid Services as well as state staff to discuss a wide
range of APD reforms, including raising the regulatory thresholds for
submission. Because the Federal regulatory process is lengthy, the need
for APD submissions will most likely be unavoidable in those states that
choose to conduct major overhauls or enhancement efforts of their ACSES
over the next few years.

An alternative to closing an APD, in light of the above issues, is to
maintain the document in an open, ongoing status. For example, by
keeping the APD open, the existing, still accruing benefits under that
APD can be used to offset the costs of any new, major (above APD
threshold) enhancement projects. This may be a much better option than
having to recreate a cost-benefit analysis from scratch as part of a new
AAPD for such an enhancement project. In other words, the state retains
a means to use continually accruing benefits as presented in the open
cost-benefits analysis to justify the costs associated with any new
development or enhancement effort.

By contrast, a state without an open APD, will have to "start over" in
that a new planning or implementation project must be initiated, with a
new cost/benefit analysis tied to the new/proposed functionality,
systems and/or services. The "old" ACSES, and by reference that
project's closed APD, continues to accumulate the benefits being derived
from and attributable to the successful installation of that system's
automation. These constantly accruing benefits, however, are not
transferable to the brand new project (new APD). This is essentially the
same situation a state would find itself in if it determines that a
"new" or "replacement" system is needed; a new Planning APD and/or IAPD
would be required which likewise would require a new cost/benefit
analysis, thus eliminating the application of the old ACSES system's
still accruing benefits. The use of accruing benefits in an open APD to
offset any additional project costs, such as those incurred by new
hardware, software, and services procurements and activities applies
only to projects where the existing system is the foundation platform
for the enhancements/upgrade project. Any completely new ACSES project,
such as one in which a brand new system is built or transferred in from
another donor state, will necessarily need to justify itself based on
its own attributable, quantifiable benefits as that system is able to
accrue them. These principles are consistent with industry standards for
cost/benefit analysis and the calculation of return on investment (ROI).

**Question 8. What are the benefits of closing the APD project?**

**Answer 8.** An obvious benefit to closing the APD project is the
reduced burden on state staff for maintaining and submitting annual and
\"As-Needed\" Advance Planning Documents to the federal government.
Another benefit may include the elimination of duplicative reporting
processes: the APD for Federal submission versus separate formats and
content for internal, state project reporting and tracking.

**Question 9. If my state closed our child support APD project before we
realized the implications or benefits of keeping the APD open, can we
reopen the \"closed\" APD?**

**Answer 9.** Yes. A previously closed APD can be reopened by the state
within 24 months of closure if the state updates the information in the
Advance Planning Document, including the cost-benefit analysis, from the
date of the last AAPDU to the current date.

**Question 10. If my state opts to close the APD project, when will the
state need to submit a new APD?**

**Answer 10.** If the state is seeking regular rate (66 percent) Federal
Financial Participation (FFP), including funding for operations, and the
total acquisition cost exceed \$5 million, then an APD is required. If
the state plans to obtain non-competitively from a non-governmental
source ADP equipment or services with a total acquisition cost that
exceed \$1,000,000, then an APD is also required. Please note that 45
CFR 95.605 indicates that *total acquisition* means all anticipated
expenditures for the project. The definition of total acquisition cost
is not based on any given contract or year.

**Question 11. If my state acquires its maintenance and operation (M&O)
support through a contractor and the acquisition exceeds the regular
rate threshold of \$5 million, can I ever close my developmental APD?**

**Answer 11.** The regulation governing cost-benefit analysis, 45 CFR
95.605, indicates that, \"*Once the state begins operation, either on a
pilot basis or under a phased approval, the cost-savings shall be
submitted 2-5 years after statewide operation until the Department
determines project cost savings have been achieved.*\" Therefore you can
request that your developmental APD, including future M&O costs, be
closed within 2-5 years after statewide operation, based on having
achieved \"break-even.\" Most states had systems that were operational
statewide several years before they were certified. If your maintenance
and operation support is provided through a service agreement from a
State agency, you may be able to close your APD earlier. See the answer
to question #14 for more detail.

**Question 12. If a particular APD section or an attachment was
previously submitted, and has not changed, we did not submit it in
subsequent AAPDU\'s. Does a close-out APD need a full copy of each
section and attachment of the APD?**

**Answer 12.** A close-out APD must present sufficient information on
the project in order for our Office to determine whether all of the
close-out criteria, as described herein, have been met (see Answers 1
and 5 above.) As described in the table in Answer 5 above, all sections
of the APD need to be reproduced in the close-out document, or in the
alternative, the close-out APD can affirm that there has been no change
to a specified section(s) of the APD since a previous AAPDU submission.
The state must reference where to find that section not included in the
document. For example, the name and date of the document in which the
section was submitted. (i.e. *Kansas IAPD, Fiscal Year 2000, Appendix A,
submitted September 13, 2000*.)

**Question 13. One reason my state was considering closing our APD
project was to have a higher threshold for submitting acquisitions.
Section D-6 of the *Addendum to State Systems APD Guide for Child
Support Systems dated March 16, 1999,* states: \"Once a project has been
funded at the enhanced FFP rate, it remains an enhanced project and is
subject to the enhanced rate thresholds, regardless of the FFP rate that
is being requested for a contract or task order.\" Is this policy still
in effect?**

**Answer 13.** No. For ACSES projects, enhanced funding legislation,
which provided such funding for ACSES expenditures until September 30,
2001, was enacted to assist states with certification requirements.
Therefore, once a state is certified for meeting PRWORA automation
requirements, then the acquisition threshold rates for regular rate FFP
projects apply, even if the state opts to keep its APD open. Once
PRWORA-certified, acquisitions need to be submitted for prior approval
only if they exceed \$1 million for sole source acquisitions or \$5
million for competitive procurements.

**Question 14. If I obtain my maintenance and operation (M&O) support
for my child support system in-house under a service agreement, from a
state agency, does it need to be submitted for prior approval?**

**Answer 14.** The state is not required to submit an APD for purely
operational costs obtained in-house under a service agreement from a
state agency, if that state agency does not acquire its services from a
commercial source. However, under 45 CFR 95.605, the definition of
\"service agreement\" indicates that prior approval is required for APD
equipment and APD services acquired by a state service agency if: 1) the
state agency acquires those services from commercial sources in excess
of the thresholds (see Questions and Answers 9 and12); and, 2) the state
agency bills more than fifty percent of total charges to all users to
Federal programs seeking matching FFP under 45 CFR Part, 95, Subpart F.

# Conclusion

Any decision to maintain or close-out an APD for the statewide ACSES can
have far-reaching effects into the future in terms of the
cost-justification for those future expenses. In addition, re-creating
such significant project management and tracking information as is
contained in an APD can require a substantial level-of-effort. OCSE's
Division of State and Tribal Systems staff can provide technical
assistance, as needed, to state projects considering these types of
decisions. We encourage you to continue to discuss and work with our
Office to address these and similar issues. Together, we can help to
ensure that Federal funding in any future enhancements of your ACSES
project proceeds in as uninterrupted and uncomplicated a manner as
possible.