c' 
I,,  " 
FICA TION 
ALIEN VERI 

ENTITLEMENTS 
FOR 
OFFICE OF INSPECTOR GENERAL

OFFICE 0' ANALVSI8 AND IN8PECTION8

FEBRUARY 1988
 ALIEN VERIFICATION FOR ENTITLEMENTS

A NATIONAL PROGRA INSPECTION 
RICHAD P. KUSSEROW 
INSPECTOR GENERAL  FEBRUARY 1988 
OAI-86-02-00003  ~\ 
TABLE OF CONTENTS

~ 
EXECUTIVE SUMY  i

INTRODUCTION 
1

FINDINGS 
3

A Majority Of Aliens Are Eligible For Benefits 
3

Most States Check Alien Status Manually 
4

INS Offers SAVE -- An Automated Alternative 
5

Extent Of The Problem Of Ineligible Aliens Not Clear 
6

State Responses To SAVE 
9

Advantages Of SAVE 
10

Limitations Of SAVE 
13

Why states Are Reluctant To Use SAVE 
17

CONCLUSIONS 
18

APPENDIX: Comments On Draft Report And OIG Responses 
19
 C\ 
EXECUIV SUMY 
Purcose And Background

This inspection resulted from the continuing interest of the

Office of Inspector General in encouraging automated front-end

eligibility verification for entitlement programs. The Inspector

General became concerned that few state human services agencies,

in their claims processing for this Department i s programs, were

availing themselves of an automated alien verification system,

known as SAVE (Systematic Alien Verification for Entitlement),

developed by the Immigration and Naturalization Service (INS) and

made available in the early 1980 IS.

The inspection sought to (1) obtain States i assessment of the 
strengths and weaknesses, as well as the advantages and

disadvantages of SAVE; (2) identify obstacles to the expanded use

of SAVE; and (3) provide feedback to the Department, INS and

other departments administering programs to which SAVE could be

applied as a voluntary verification system.

A check of alien status (whether done manually or by automated

techniques) is standard practice in the Aid to Families With

Dependent Children, Food Stamps, Medicaid and Unemployment

Insurance programs. Eligibility requirements for these programs

limit eligibility to aliens who are lawfully admitted for

permanent residence or classified as permanently residing under

color of law (PRUCOL).

The recently enacted Immigration Reform and Control Act of 1986

(IRCA) includes a provision requiring the use of SAVE by State

agencies administering six programs including those covered by

this inspection. Under certain circumstances, the law permits

State agencies to obtain a waiver allowing them to use an

alternative system.

Methodoloav 
Site visits were conducted in six States, (California, Colorado,

Florida, Illinois, New York and Texas), selected on the basis of

the estimated number of their illegal aliens and their experience

with SAVE. Two other States (Washington and Wisconsin) with SAVE

experience were contacted by phone. All but Wisconsin ranked

among the top 12 States in terms of undocumented alien

population. 
The study focused on four Federal entitlement programs

administered by state agencies: Aid to Families with Dependent

Children (AFDC), Medicaid, Food Stamps and Unemployment Insurance

(UI) . 
i  " 
In each of the visited states, discussions were held with: staff

of the Governor's Office, INS District Office, Federal Regional

Offices of the Departments of Health and Human Services (HHS) and

Labor (DOL), State and local agencies, and advocacy groups.

Findinqs 
o	 Most state agencies are satisfied with using their 
traditional manual methods of verifying alien status of 
human services and unemployment benefits.

applicants for 

They cited low quality control error rates as evidence of

success. 
o	 While states were slow to participate in SAVE, UI agencies 
in eight States and the District of Columia had early pilot 
projects as did human services agencies in five States. 
More recently, 13 other agencies in six more states and 
three jurisdictions have begun to participate, partly in 
anticipation of IRCA' s requirement to do so. 
o	 About half the agencies with early pilot projects have 
continued them. They cited as reasons quick response time 
for aliens in INS' data base, savings greater than costs and 
a deterrent effect on other ineligible applicants. Although 
most agencies with data on SAVE's cost and benefits reported 
that it saved more than it cost, the cost data were 
incomplete and savings were not compared to traditional 
manual methods. Consequently those agencies without SAVE 
experience, as well as a few with such experience, have been 
skeptical of the projected net savings reported by INS and
States. 
o	 Most officials pointed out weaknesses in the SAVE' data base. 
Those in human services agencies were particularly concerned 
that SAVE is not helpful in providing information to allow 
them to make determinations on those aliens classified as 
permanently residing under color of law (PRUCOL). 
o	 In a substantial numer of cases, the automated SAVE 
response is not sufficient, and agencies have to then resort 
to a time-consuming, manual secondary verification process. 
o	 Whether or not their State had experience with SAVE, it was 
the clear consensus of respondents that SAVE is a sound 
concept. with substantial improvements, many hoped it would 
save program dollars and speed up service. 
Conclusions 
As Federal and State agencies implement the SAVE provisions of

IRCA, an opportunity exists for them to work closely with INS to

enhance the SAVE system and make it more attractive to States.

ii
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, 
Contacts with INS officials during the inspection revealed a

'to make improvements to better meet user needs. INS

willingness 
has establ ished an interagency task force for that purpose.

Because the law is so new, no recommendations are included in

this report. However, it appears that Federal user agencies

would benef it from a review of their common information needs

relative to the SAVE system. Over time, an improved SAVE system

could be a useful tool for strengthening program integrity.

Comments From Federal Agencies

Comments on the draft report were received from the Assistant

Secretary of Planning and Evaluation (ASPE), the Administrator of

the Family' Support Administration (FSA), the Administrator of the

Health Care Financing Administration (HCFA), the Commissioner of

Social Security (SSA) -- all wi thin HHS; and outside the

Department, from the Inspectors General of the Departments of

Labor (DOL), Education (ED), and Housing and Urban Development

N(RaUDt);u anrd afrlomi tzhea Ctomimiossinon erS oef rthve iImcmiegra.ti on. a
 nd

Major comments by ASPE, DOL and FSA questioned the accuracy of

estimates of cost savings due to SAVE made by INS, the

Congressional Budget Office and some State agencies with SAVE

projects. They felt that data on costs were incomplete and that

savings from SAVE were not compared with savings from traditional

agency methods of verification. In response, we added a new

section qualifying the cost s~vings findings.

Conflicting comments by FSA and INS on the relevance of including

PRUCOL information in the SAVE response suggest that State

agencies and INS judge the effectiveness of SAVE by different

criteria. We did not change our finding that agencies saw the

omission of PRUCOL information to be a serious limitation.

Other comments related to problems and progress with secondary

verification, the adequacy of traditional agency verification

methods, and other experiences with SAVE. A number of

recommendations were made for increasing the utility of SAVE.

Details of the comments and of our responses are described in the

Appendix. 
iii
 INTODUCTION 
PurDose And Backaround

In recent years, the use of automated techniques such as computer

matches and screens to assure the integrity of payments has grown

steadily in state programs receiving Federal funds. Much of this

technology has previously been directed at preventing duplicate

payments or verifying income eligibility for means-tested

entitlement programs.

More recently, automated methods have also been applied to the

task of verifying eligibility based on alien status. In 1983,

the Immigration and Naturalization Service (INS), based on its

experiences in the early 1980's with pilot projects in,three

States (California, Colorado and Illinois), began promoting State

use of its automated system called SAVE (Systematic Alien

Verification for Entitlement).

Because few state human services agencies have utilized SAVE to

verify alien status of applicants for Aid to Families with

Dependent Children (AFDC), Food Stamps and Medicaid, the

Inspector General initiated this inspection to find out the

reasons. 
The inspection had three obj ecti ves: 
To gain a current overview of perceived strengths and

weaknesses, as well as advantageous and disadvantages,

of automated alien status verification systems;

To identify obstacles to human services agencies

establishing or expanding such automated systems; and

To give feedback to HHS, INS and other departments

administering programs to which SAVE is applicable.

While completion of this inspection was pending, the Immigration

Reform and Control Act of 1986 (IRCA) was signed into law as

Pulic Law 99-603. One of its provisions to control illegal 
immigration is a requirement that State agencies verify with INS

the immigration status of alien applicants for AFDC, Medicaid,

Food Stamps, UI, and Housing and Educational Assistance benefits.

This is to be done through an "automated or other system

(designated by the Service for use with States)..."

The Secretary responsible for any of these programs may grant

States a waiver permitting them to use an alternative to such an

automated or manual version of SAVE if one of the following

conditions are met: (a) an equally effective and timely 
1  " 
" 
alternative system exists; or (b) the costs of administering the

SAVE system ex~eed the estimated savings.

These recent developments provide a new context for reviewing the

resul ts of this inspection.

Methodology 
Site visits were conducted in six States (California, Colorado,

Florida, Illinois, New York and Texas) selected on the basis of

the estimated number of illegal aliens and experience with SAVE.

Two other states (Washington and Wisconsin) with SAVE experience

were also contacted by phone. All but Wisconsin ranked among the

top 12 states in terms of undocumented alien population.

Prior to formal data collection, discussions were held with

Federal officials from INS, HHS, the Departments of Labor (DOL),

Agriculture (USDA), and Education (ED), and with advocacy groups

to iqentify the issues. The data collection instruments were

pre-tested with State and local officials in Connecticut and New

York. 
The study focused on four Federal entitlement programs

administered by State agencies: two are HHS programs - AFDC and

Medicaid; one' is a USDA program - Food Stamps; and one is a DOL

program - Unemployment Insurance (UI). While the IG' s primary

concern was with AFDC and Medicaid, USDA's Food stamp program was

included because its State administration and local eligibility

determination process is frequently linked to AFDC. DOL's UI

program was included because it has had wider experience with

SAVE . 
In each of the States visited, discussions were held with: a 
representative of the Governor's Office, INS District Office

staff, Federal Regional Office staff in HHS and DOL, State and

local agency officials and eligibility workers in UI and. human

services programs, and with representatives of one or more

advocacy groups. 
A total of 328 respondents were contacted in the capital cities

of the eight states, and in Los Angeles, San Francisco, Houston,

Dallas, Chicago, Miami, Atlanta, New York City, Washington, D. C. , 
cando Hanrtfdordu ancd Btriedgedpor.t , .C onnecticut. A special sub-study of

l4 additional advocacy groups in New York City was also

2
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FINDINGS 
A MAORITY OF ALIENS AR ELIGIBLE FOR BENEFITS

Prior to 1972 i no Federal eligibility requirements based on

citizenship or alien status. existed for AFDC, Medicaid, Food

Stamps and UI programs. Between 1972 and 1976, however, laws

bearing on alien eligibility were enacted for all these programs,

except Medicaid. While alien eligibility regulations were

adopted for Medicaid in 1973 without a statutory basis, the

recent IRCA legislation established such requirements by statute.

The requirements established in the 1970' s for the AFDC, Food

Stamps and UI programs each identified two categories of aliens

who, if otherwise eligible, are entitled to benefits:

. 

immigrant aliens lawfully admitted for permanent

residence; and,

aliens "permanently residing under color of law"

(PRUCOL) . .

All other aliens are considered ineligible. They include

nonimmigrant (i.e., tourist~, students and others lawfully

admitted on a temporary basis) and those undocumented aliens who

do not' qualify "under color of law." 
Most aliens in this country are eligible for benefits, since a

majority (about three-fifths, according to recent studies) are

immigrants lawfully admitted for permanent residence. Aliens in

the category of "permanently residing under color of law," or

PRUCOL, are'also eligible for benefits. This category, however,

is open to interpretation and is confusing to eligibility workers

and aliens alike. Although originally defined by the four

programs in nearly identical terms, PRUCOL has since come to be

defined differently for each program. According to agency

officials; this makes it difficult for local eligibility workers,

more than

especially those in human services agencies who handle 
done perograpm, too detrermitnea PRUCtOLi eloigibinlity.. I n g.en eral though,

PRUCOL includes those .in the u.s. since January 1, 1972 (updated

from 1948 by IRCA), those designated as refugees, parolees and

asylees, and certain persons for whom INS has withheld

Over the last 8 years, a series of Federal and State court cases,

aimed at clarifying the definition of PRUCOL, have further

complicated the question of who is eligible. For example, in

response to a 1984 Federal court order in Berger v. Schweiker,

the Social Security Administration (SSA) developed an even longer

list of aliens falling within an expanded definition of PRUCOL

for the Supplemental Security Income (SSI) program. These

include undocumented aliens in the U. S. with the knowledge and

3
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" 
the INS and whose departure INS does not

pceromisnsiotne ofm 
 plate enforcing. 
While these cases have usually expanded the definition to make

more aliens eligible for the various programs, they have resulted

in differences among the programs. Until January 1987, HHS' HCFA

(Heal th Care Financing Administration) even had two different
definit~ons of PRUCOL eligibility for Medicaid depending on

whether an applicant'~ eligibility derived from the alien's SSI

or AFDC eligibility. However, as tne result of the Omnibus

Reconciliation Act of 1986 (OBRA-86) which permitted Medicaid

eligibility for PRUCOL applicants, HCFA has applied the broader

SSI categories of PRUCOL to all Medicaid applicants since January

1987. Aiiens legalized under IRCA will also be eligible for

Medicaid after 5 years. There are two exceptions to the 5-year

ban: (1) those under 18, Cuban-Haitian entrants, or aged, blind

and disabled, and otherwise eligible, may receive all Medicaid

services right away; and (2) others legalized but not in these

groups may receive emergency services or services for pregnant

women. 
MOST STATES CHECK ALIEN STATUS MAALLY 
All legal aliens are required to carry documentation issued by

INS. Persons lawfully admitted for permanent residence are 
generally issued a "green card" (Form I~151 or I-551), bearing an

"A" (.alien) number. Nonimmigrant aliens and other lawfully

admitted aliens, such as refugees, are generally required to

carry an arrival and departure record, Form I-94. Some other

aliens known to INS may be required to carry special INS

documents such as letters.

Intake or eligibility workers in public assistance agencies

gerierally accept any "green card" which looks legitimate as 
evidence of alien status. Other INS documents, especially the

I-94, are reviewed according to written procedures prescribed by

Federal and State agencies. If unable to produce an acceptable

document ~ the al ien is either sent home or to INS to get it.

agencies not using the automated SAVE system nevertheless

Many 
have some contact with INS, either by phone or by mail. This

varies greatly by locality and often depends on the relationships

which individual workers or supervisors have with INS. Although

only INS is authorized to determine whether or not an applicant's

claim to legitimate alien status is valid, it is the state

agency's responsibility to make the decision on alien eligibility

using all data available.

4  INS OFFERS SAVE -- AN AUTOMATED ALTERNATIVE

since the 1970's, INS has been developing automated systems to

manage its data on aliens, and has given a high priority to

making part of its alien data base available to State or local

agencies for use in verifying the eligibility of alien

applicants. Since the early 1980's, INS has succeeded in getting

some State, city and county agencies to undertake pilot proj ects . 
To encourage more State entitlement agencies to use its alien

data base, INS formalized these automated verification activities

in 1984 under the heading of SAVE (Systematic Alien Verification

for Entitlement). SAVE involves the systematic use of a

terminal, either in an INS District Off ice or in a State agency,

to access the INS alien file to determine an applicant's alien

status. 
Under a model SAVE project, prior to IRCA, a State agency entered

into a formal agreement with INS and installed in its office a

terminal hooked up to INS' computer system. Using this, the data

entry worker then keyed in an "A-number" (INS' alien registration

number) and, in a matter of seconds, received a response on the

Alien Status Verification Index (ASVI) display, which includes

fields: 
the following limited number of data 

o  A-number 
o  Last and first names 
o	 Social security number (not currently used because many 
SSNs are not in the data base) 
o  Date and country of birth 
o  Date and port of entry 
o  File control office 
o  Class of admission (e.g., refugee) 
o  Date file opened 
o  Alien'status (e.g., lawful permanent resident 
employment authorized) and action needed, if any

(e.g., institute secondary verification) .

The SAVE system can only be accessed by the A-numer listed on

the green card or on some I-94s. If the response shows that INS

has no record of the A-number, or that the alien is not listed as

a lawful' permanent resident, it indicates that a secondary

verification should be initiated. The agency then fills out INS'

Form G-845 (Document Verification Request) and mails it, together

with photocopies of the applicant's immigration documents, to the

nearest INS District Office. After INS staff review the

documents, make a computer check against the more comprehensive

Central Index (with its 108 data elements) and/or institute a

manual check against paper files, the results are mailed back to

the State agency. If the data do not support the status claimed

5
 by an applicant, the alien may present his/her case to the

entitlement agency before a final determination is made.

Most existing SAVE projects in state or local agencies do not

conform entirely to this model. The three maj or variations are:

( 1)  The state or local agency mails a list of alien 
applicants to the INS District Office for automated 
, .
by INS staff, and the results of automated 
verification 
verification are mailed back to the agency.
INS picks up aiien applicant lists from the agency for 
( 2) 
automated verification by INS staff. ' 
(3 )  A State or local agency staff person sits at an INS 
District Office terminal and verifies alien status 
through an INS computer. 
Since IRCA was enacted, INS' has designated six options for State

agencies to consider in implementing the Act's requirement that

they verify each alien's immigration'status through an INS

designated system. These options' range from various automated

techniques nsing either a computer terminal or a touch-tone

telephone ,to manual or mail methods in limited circumstances. 
EXTENT OF THE PROBLEM OF INELIGIBLE ALIENS ,NOT CLEAR

Most Sav Ineligible Aliens Are Not A Bia Problem

A significant majority (84 percent) of the State and local

officials contacted expressed the opinion that paying benefits to

ineligible aliens was not a big problem. Half the local

eligibility workers and virtually all officials in INS' District

Offices, on the other hand, did believe it to be a big' problem.

State and local officials offered as evidence low' quality control

(QC) error rates due to citizenship (including alien status).

Rates were available (although for different periods) for three

human services programs in four States. These States, shown in

Chart 1, all used manual verification methods for these programs.

These, consistently low QC error rates suggest that the numers of

ineligible aliens who slip through current verification

procedures may be small. This interpretation, however, is

questioned by INS based on its view that low QC error rates

reflect inadequate manual verification in the QC, as well as in

the regular eligibility procedures. '

6
 '-, 
" 
Chart 1

Oualitv Control Error Rates Related To citizenshiD/Alien status

PROGRA 
STATE  AFDC  FOOD STAMPS  MEDICAID 
%  %  % 
Illinois 
0.14  0.8  0.1 
10/84-3/85) 
New York
 0.0  0.1 
0.01 * 
(10/83';9/84 ) 
Texas  0.04  0.08  0.09 
(10/84-9/85) 
Washington 0'.04  ' 0.04  0.0 
(7/84-6/85) 
*  includes a category of "other errors" as

wThis efiglulre 
 as citizenship errors. 
Ineliaibles Seen As UnlikelY To Apply

Three-quarters of the State and local officials said they were

aware of no evidence that illegal aliens are likely to apply.

All the INS officials, plus a handful of others, disagreed. Most

evidence cited by both sides was anecdotal or based on personal

experience. However, to support their belief that illegal aliens

were likely to apply, officials from INS and agencies using

automated methods cited rates of denials for ineligible alien

status. For example, local officials in two States using SAVE

reported 5 percent and 6 percent denial rates among alien

applicants, for UI and AFDC respectively. These rates, ho~ever,

were based on the percent of denials' among alien applicants only.

The denial rates are much smaller when based on total number of

all applicants as shown below.

Chart 2 presents data provided by UI agencies in eight States and

human services agencies in six States which show the percent of

their denials based on alien status. Al though data were not

available for comparable time periods, these denial rates are

listed to show the range of rates for these two types of

programs. All data are based on using SAVE, except those for

for Texas and New York AFDC and Medicaid. All

California UI and 

these rates are consistently low and appear to support the view

that ineligibles are not likely to apply.

7  '\ 
Chart 2

Percentaae Of All UI ADDlicants And AFDC Or Medicaid A~plicant

Denied Becaulse- Of Alien status In Eight States*

% AFDC Or Medicaid 
STATE  Applicants Denied  Appl icants Denied 
California 
0.38% **	 0.12%
Colorado  .58	 .01
Florida .71	 N.A.
illinois 
.19	 .01 
New York  .05  .01** 
Texas  .31  .04 ** 
Washington .02	 .00 
Wisconsin  .02	 N.A. 
*	 Time periods varied from one month to one year during 
1984, 1985 and early 1986. All Washington data and 
Texas UI data are for local projects. 
**	 These denial rates are not based on using SAVE. 
Based on experience in Illinois with the UI program, INS has

estimated that once SAVE is in operation, .69 percent of

applicants will be "illegal" aliens, compared to an estimated 2.5

percent before SAVE is used. All but one of the above denial

rates are substantially lower than the. 69 percent estimated by

INS as the proportion applying after SAVE is implemented. This

is true whether or not SAVE was used. The range of denial rates

for human services is even lower than the range for UI which also

has a very low upper limit of less than one percent. In the

absence of evidence that SAVE is less efficient in screening out

ineligibles among human services applicants, this suggests that

the problem of ineligible alien applicants may be even smaller

for these agencies than for UI agencies.

State trend data which would permit comparison of denial rates

after SAVE are not available. It is, therefore, not

before and 

possible to gauge the effect of SAVE on denial rates.

INS Officials See Big Problems In Terms Of Dollars

INS officials emphasized that the size of the problem can also be

measured in terms of dollars. One described it as one of the

major problems in the united States today. Based on its

statistical proj ection that 2.5 percent of recipients of benefits

are illegal aliens, INS believes that SAVE would result in $2.8

billion in cost avoidances if various agencies in all fifty

States participated. The estimate by INS of the proportion of

8
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~ 
illegal aliens among beneficiaries is based on the assumptions

that 2.5 percent of the population are illegal aliens and that

illegals will apply for and successfully receive benefits at the

same rate as all other groups. These assumptions have been

questioned by various Federal and state officials.

, during congessional

The Congressional Budget Office (CBO) 

consideration of IRCA, estimated annual savings to the Federal

government for 1989 of $25 million (less $10 million or more

annual costs) resulting from mandating SAVE in all states. This

is significantly lower than INS' estimate of savings. However,

the estimated savings for several UI agencies with SAVE projects

suggest that the problem of inappropriate dollar payments may be

substantial at least for UI. It should be noted, though, that

denials for UI are not based on alienage alone, but on current

authorization to work. If the alien is eligible under PRUCOL,

but is not currently authorized to work by INS, the UI claim is

denied. In Florida, a u.s. District Court ruled in a class

action suit that many denials for UI were based on improper

termination by INS of work authorization, triggered by SAVE

inquir ies . 
Savi~gs proj ected by one state i s human services program suggest a 
less significant problem in terms of dollars for human services.

Savings for various programs are shQwn, together with estimated

costs of implementing and/or operating SAVE, in Chart 4 on page

1i. 
Comparsion of how SAVE vs. traditional manual verification

methods address the problem of ineligible alien applicants is a

discussed under cost benefits below.

STATE RESPONSES TO SAVE

sixteen States Have Used SAVE

In the last 4 years, INS staff have actively promoted SAVE as a

way to save money by reducing the number of ineligible aliens

receiving benefits and as a, way to remove the "magnet of

benefits" which is said to attract illegal aliens to this

country. INS appears to have first targeted UI agencies in

States with large alien populations; human services agencies have

been a second target in the same States.

Resul ts of these efforts in the eight States contacted are shown

in Chart 3 below, including State and local pilot proj ects and

extended SAVE projects by type of program. In addition to these

eight early States, eight others have also used some form of

SAVE. These include Virginia and the District of Columbia (D. C.)

which have had UI pilots for several years and more recently,

according to INS, UI agencies in Idaho, Indiana, and Montana, and

9
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" 
both UI and human services agencies in Hawaii, Louisiana and

Mississippi. The three jurisdictions of Puerto Rico, Virgin

Guam are also participating. Twenty-seven agencies

Islands and 

in these states and jurisdictions have had SAVE projects.

. Chart 3 
Dates Of Earlv pilot Or Extended SAVE Projects Bv TVDe

Of Program In States Contacted *

Human Services (AFDC

UnemDlovment Insurance  Food StamDs. Medicaid) 
Pilot 
Extended  Pilot 
Extended 
Illinois 
pre-10/83 10/83-present 11/85-present
Colorado
1983  7/84 -present  5/83-6/83 7/84-present
California 
pre-1983  1983-present 
Florida  6/84-9/85 10/85-present
Texas  10/85-11/85 7/86-present**
New York  4/85-6/85
Washington 10/85-12/85** 8/85-9/85
Wisconsin  l/85  l/86-present 
2/85-3/85 
*  Pilots are defined here as initial projects to try out

INS' automated verification, either on-line or through

harid delivery or mail. Extended SAVE projects are'

expanded or continuing efforts on a more formal basis.

** 
Projects limited to selected cities or offices.

These projects include some using an on-line system connected to

INS' SAVE data base and many using hand delivery or mail to INS.

Aaencies Slow To Use SAVE: Half With Pilot Projects Continue Them

States have been generally slow to use SAVE. This has been

especially true for human services agencies. The fact that only

five human services agencies in the States contacted have had

pilot projects reflects, in part, ,INS' early focus on UI

agencies; that only two of these States have continued them

suggests that human services agencies have had less positive

experiences with Save than UI agencies. By contrast, INS

succeeded in getting UI agencies in eight States and D.C., to

participate early in pilot SAVE projects.

Once States tried SAVE, about half continued to participate,

usually in their UI agencies. Of the 12 agencies in the eight

contacted States which have tried some version of SAVE, seven

agencies extended their proj ect beyond the pilot phase. They

10 
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included UI agencies in Colorado, Florida, Illinois, Texas and

Wisconsin, and human services agencies in California and

Colorado. The UI agency in Texas has extended its pilot beyond

Houston to E1 Paso, Dallas, Fort Worth and San Antonio, despite

some conCerns over continuing litigation.

ADVANTAGES OF SAVE

Respondents in agencies which have continued their use of SAVE

were generally satisfied, citing such advantages as the quicker

response of an automated system, as well as its cost savings and

deterrent effect. One State UI official said, "Why drive a Ford

when a Cadillac is available."

Users, Li~e Ouick ResDonse For Those Aliens In The System 
Respondents noted that if the A-number is in the SAVE data base,

INS' response is virtually inst~ntaneous. Transmittal of ,the INS

response by the state agency to its local requesting office can,

however, take a few minutes or several days, depending on the

tape of communication used, e.g., computer, telephone, hand

delivery or mail. In, any case, services are expedited when SAVE

in its automated form can verify an alien's legal status more

quickly than manual methods. Five agencies using SAVE and two

INS District Offices report, however, that computer downtime

occurs occasionally. .

Cost Benefits Of SAVE Claimed. But Data Are IncomDlete

Savinas A Ma;or Sellina Point For SAVE. A key argument in INS'

efforts to promote SAVE among the States has been to point out

that it saves more money than it costs. An INS analysis

estimates the initial costs of installing SAVE at about $2,500,

with annual maintenance costs near $25,000. INS projects that

annual data processing costs, if all 50 States were using SAVE,

would come to only about $l.35 million. This would be '

insignificant compared to INS' estimate of $2.8 billion in

savings from SAVE, if both estimates are based on reasonably

complete and accurate information. But INS i cost estimate did 
not include labor costs. Also, its estimate of savings is partly

which do not identify how much of their

based on State reports 

savings from SAVE would have also resulted from traditional

manual methods which require no additional costs.

The Congressional Budget Office (CBO) estimated that SAVE would

cost at least $10 million to run annually. By their 
calculations, a net savings of $15 million in 1989 and $10

million annually thereafter might still result from implementing

SAVE in the fifty States. But CBO points out that the cost of

anticipated litigation was not included in the calculations. Nor

11  '\ 
,~ 
did CBO include the labor costs of running SAVE. Consequently

CBO called its estimates of $10 to $15 million savings "very

uncertain. " 
Estimates Based On incomplete Data. The available data on costs

attributed, to SAVE are incomplete in that they often do not

incl~de costs af labor and never include the costs of litigation.

The data on sa,vings  are in,complete in that they do not show what

savings resulting from the use of SAVE are above and beyond the

savings that would have been, achieved by the use of traditional

manual methods.
One of the' few studies, if not the only one, comparing the

relative successes of SAVE and manual methods of alien

verification was conducted by the Illinois Department of Pulic

Aid. After a 6-month study of AFDC applicants at four local

offices with many foreign born applicants Cook County, the agency

concluded that the small additional savings which would have

resulted from using SAVE, rather than manual methods did not

warrant the diversion ,of staff from larger sources of error.

Best Available Data Presented With Oualifications. Despite the

serious limitations of most of the estimates, they are presented

as the best, avaiiable information. This is the same information

which INS and some states use to support SAVE and other States

use to question it. The estimates require careful qualification

so they are not misleaQing.

As shown in Chart 4, eight of ten agencies for which saving and

cpst estimates were available reported savings greater than

costs. Reported gross savings ranged from $29,080 for five UI

centers in Washington to $4.2 million for Illinois UI.' Estimated

costs ranged from $5,694 for Wisconsin UI to $1,13,000 for Florida 
UI in its start-up year. The cost estimates by some of these

State agencies, however, apparently did not include labor costs.

Data processing as well as labor costs may vary by type of

project. Also, the costs of litigation, which as the CBO report

indicated are ~ifficult to determine, are not included.

On the basis, of these limited data, eight of the agencies,

including one human services agency, estimated savings greater

than costs from the use of SAVE ranging from $13,000 to just over

$4 million. Two State UI agencies, on the other hand, said that

SAVE had not been cost beneficial for them. Washington UI

reported that the small savings achieved in its pilot were more

than offset by the estimated costs of detection and collection.

New York'UI, based on its pilot SAVE'project, judged the use of

SAVE would not be cost effective for its program, although it did

not make its figures available.

12  " 
" 
Chart 4

Estimated Annualized Savinas And Costs, Associated 
with SAVE ReDorted By State Aaencies

Est. Savings
. Less Est. Costs 
Est. Costs 
Est .  savings 
Colorado UI  $  279,700 $ 13,200 $ 265,SOO
" Human Svcs.  33,000 20,000, 13, 000
Florida UI  7S0,000* 113,000 667 ,000*
4,200,000 30,000  4,170,000 
Illinois UI 
New York UI	 N.A.  N.A.  (judged ineffective)
Texas (Houston) UI 666,000  100,000	 666,000 
Washington: 5 UI 29,OSO  15,70S plus (net loss estimated)
Centers	 collecticmcosts 
Wisconsin UI  52,000  5,694	 46,306 
*	 These figures do not include a retroactive reduction in savings 
based on a recent court ruling that 140 claims were 
inappropriately denied due to INS actions. 
In summary, those estimates have two weaknesses: the, SAVE cost

data are usually incomplete, and comparable estimates of costs

and savings for traditional manual methods are not provided.

~AVE Deters some, Ineliaible ApDlicants

INS believes that SAVE also deters illegal aliens from applying

for 'benefits, and thereby reduces losses. According to -INS, the

rate of illegal alien applicants will drop from a level of 2.5

percent to 0.69 percent once the word gets out. Several States

agreed that SAVE was a deterrent, but data on any incremental

deterrent effect of SAVE over and above the deterrent effect of

tradi tional methods were lacking. Other agency and advocacy

group offi~ials reported their belief that some eligible ~liens

are also deterred from applying f~r benefits out of fear.

One potential result of deterrence, acknowledged by INS, is that

some ineligible aliens may avoid a SAVE check by claiming

citizenship. This points to the need for a parallel effort by

those user agencies which require proof of citizenship, to

prevent the use of fraudulent birth certificates.

13
 \ 
LIMITATIONS OF SAVE

States Report Many Aliens Are Not In The Data Base

A major problem for states is the common perception that' many

aliens are not included in SAVE's data base. Nearly four-fifths

of all respondents saw the lack of accuracy and oompleteness of

INS' data as an obstacle to its use by more agencies. INS

officials indicated that recent entrants, as well as persons who

entered the U. S. prior to 1956, will not be in the SAVE system.

However, various States report that the SAVE file is incomplete

for other aliens later determined to be legal residents. An

agency worker expressed a common view that the SAVE information

should be taken "with a grain of salt." States also noted that

the status of certain categories of aliens are recorded or

updated very slowly. 
It should be noted that most illegal aliens are not in the SAVE

data base. By definition they are undocumented. Since some

undocumented aliens who become PRUCOL are still not entered into

the system, SAVE provides no immediate help in such cases.

SAVE Lacks PRUCOL Information

A major concern, especially of human services agencies and

advocacy groups, is that SAVE does not assist agencies in making

eligibility determinations based on PRUCOL. The primary

verification data provided by SAVE includes the limited

information listed on page 4, but does not indicate whether the

alien has a status which helps the agency determine whether

he/she is permanently residing under color of law. Similarly,

INS' secondary verification response categories on its Document

Verification Request Form (G-845) are oriented to UI agencies

rather than to human services agencies: three of the six response

categories have to do with employment authorization but

none of them have addressed PRUCOL questions directly. Recently,

however, new G-845 Forms have been prepared which will provide

additional boxes indicating whether or not INS anticipates

actively pursuing expulsion of the alien at the present time.

Nevertheless, for many aliens who apply for AFDC, Medicaid or

Food stamps, SAVE is relatively useless. Information on PRUCOL

status is also likely to become more important to UI agencies as

court challenges to UI determinations result in further

clarification of "who is eligible as PRUCOL."

Al though some keys to a PRUCOL determination are displayed on the

SAVE screen, the many possible combinations of these data

elements make it virtually impossible for a State worker to make

PRUCQL decisions. In response to a question about the

feasibility of adding a specific PRUCOL data field on the ASVI

screen, INS officials said that INS could create a "formula"

14  'l 
based upon country of birth, entry date and admission class that

caouliled nindsic.a.t e.  the PRUCOL status for about 80 percent of such

Secondarv Verification Is Freauently Reauired

If SAVE cannot find the alien's record 'and/or confirm the alien's

status in the data base, the screen indicates that a secondary

verification is needed. When SAVE shows no record of' the A-

number provided by the State or local agency, the complete INS

data base could be further checked by name and date of birth, but

INS does not permit State and local agency workers to do this.

Some agency workers object to this limitation, but INS says that

broader access violates the alien's right to privacy. The most

disturbing fact about secondary verifications is the large number

that must be requested. In the eight States queried, six 
agencies were able to provide' information on their secondary

verification rates. Rates for these State and local agencies

ranged from 11 percent to 75 percent of alien applicants for whom

check beyond the initial SAVE query was necessary.

a secondary 

Tahree r aatses  froeplolrotwed sb:y  .t he agencies for different periods of time

Secondary 
Verification Rate

(By % )

CA C Orange Co. Human Services) 
75%

CO (UI)
11

FL CUI) * 
43

IL CUI) 30

NY (UI)
11
WA (UI) 
38 ' 
* Verifies only aliens without "green cards. It 
While the rates vary considerably, most of the agencies reported

that 30 percent or more ,or their initial inquiries to INS

required secondary verification. For human services programs in

Orange' County, the secondary verification rate was a reported 75

percent. However, the Government Accouting Office (GAO) has

recently reported lower rates for human services in Colorado and

Puerto Rico of 24 percent and 9 percent respectively for the 6

month period from October 1, 1986 to March 31, 1987 (Systematic

Alien Verification System Could Be Improved, September 1987). It

also reported rates of 69 percent, 19 percent and 9 percent for

UI programs in Florida, Illinois and Colorado respectively.

Three main reasons for doing a secondary verification are:

1.  There is no record of the alien's A-numer in INS i data 
15  " 
-', 
" 
base ( e . g., the al ien entered the country many years 
ago or very recently and an A-number was not entered);

2.	 There is an A-number in INS' 'data base, but the SAVE 
display shows "nstitute Secondary Verification"; 
3 ..	 There is an A-number in the data base, but there is a
discrepancy between the information submitted 'by the 
agency and information sent back by INS via the SAVE

display.. These discrepancies are usually due to one of

the following: 
inaccurate information is submitted

inaccurate information is sent back

outdated information is sent back

information sent back by INS is insufficient for

the agency to determine if the alien is eligible

under PRUCOL

GAO also reported on the reasons why secondary verifications of

93 eligible aliens were made at Denver and Miami INS offices,

They included the need for a special code for Cuban-Haitian

entrants 'authorized to work (47 cases), incomplete SAVE data (28

cases), additional data needed for UI (7 cases), clerical errors

(7 cases) and PRUCOL could not be determined (4 cases).

Some of these problems may be more easily corrected than others.

For e~ampie, INS intends to make a one-time update of its data

base to add a code for Cuban-Haitian entrants. In the case of

PRUCOL there is often more, information in' the data base' than is

currently shared with the State through SAVE.

Because the secondary verification is done by mail and may

include a manual search of hard copy files by INS, it generally

took 2 weeks and, sometimes, up to a 'month or more. This ha~ 
caused concern among some State UI agencies which are required to

pay claims within 14 days in many cases. In its september 1987

notice of verificatio~ procedures, INS states that response to

secondary verifications should be returned within 7 to 10 days

and no later than 21 work days. INS has also 	 commented that

these procedures ensure that no eligible applicant is denied

benefits. 
In sum, many state agencies ~ere concerned about secondary

verification for three reasons: first, it converts a purportedly

automated process into another resource-consuming paper process;

second, it adds weeks to the eligibility determination pr9cess at

a time when agencies are being pressed to speed it up; and last,

it raises ,further questions about the quality and completeness of

data in the INS data base.

16  '\ 
.~ 
WHY STATES WERE RELUCTANT TO USE SAVE

Aaencies Were Supportive Of SAVE ConceDt But Preferred Current

Manual Methods

Nearly everyone agreed that the SAVE concept is a, good one and

has the potential for reducing inappropriate payments. However,

most respondents from, agencies and advocacy groups saw maj or

problems in its implementation. Respondents in general and State

agencies in particular preferred to see traditional, non-

automated methods continued. Four-fifths of all respondents,

contacted before IRCA was enacted, opposed making SAVE mandatory.

Most agency respondents felt that the mere fact that they ask

applicants for documentation is enough of a deterrent. The low

QC error rates were also cited as a reason for satisfaction with

non-automated procedures. 
Many state Aaencies Were Concerned About Costs And Liability

Under SAVE

Another important reason States were cautious 
about changing to

automated methods was concern that automation 
would cost more

than INS says; some doubted also that savings 
would be as great

as estimated.

It was pointed out by UI officials that any savings derived from

using SAVE will accrue to a state's UI Trust Fund and will not

offset cpsts to the State. Other concerns included the costs of

co~rt suits brought by advocacy groups on behalf of applicants

wsho ufeecl thhey  weres wruongfiullty desnie.d be nef'its.
  The States know

that they, and not INS,' are potentially liable for the costs of

Also, despite INS' explanations of how it has computed its cost

savings estimates, some agencies in large States are not yet

convinced of the accuracy of these estimates. Unemployment

agencies in Washington and New York States and ,the human services

agency in Illinois have been concerned that results of their

pilot proj ects failed to show the expected savings. Agencies in

several States have encountered adverse publicity because of

SA VE . 
Since the new immigration law provides for 100 percent Federal

reimbursement for costs to State agencies of implementing and

operating a SAVE system, concerns about program costs should be

less of an issue for States but a continuing one for Federal

programs. Costs to the State of litigation resulting from

challenges to denials of benefits based on alien verification

through SAVE, however, would not qualify for Federal

reimbursement. 
17  ~ 
CONCLUSIONS 
This inspection found that most state agencies contacted were

satisfied with their manual methods of verifying alien

eligibility' and believed they were effectively coping with what

they see as a relatively minor problem of ineligible aliens.

While some state agencies which have tried SAVE like it, most

states, regardless of their SAVE experiences, perceive major

problems with INS' alien data base, including incomplete

information' and the absence of PRUCOL data from the SAVE

response. These and other concerns have made many agencies, .

especially human services agencies, reluctant to participate in

SAVE. While data provided by most SAVE projects suggests'that

SAVE is cost-beneficial, the cost data are incomplete and many

State agencies are not convinced that savings from SAVE' are much

different than savings from traditional methods.

The new Immigration Reform and Control Act of 1986 has added, a 
new dimension to the findings of this inspection. INS pad until

October 1987 to make a verification system available to' States,

and States have until October 1988 to begin complying with the

requirement to use a SAVE system (or justify a waiver). This

allows time for INS and the affected Departments (HHS, Labor,

Agriculture, Housing and Urban Development and Education) to work

toward developing a system that will most effectively meet the

needs of user agencies. INS has establ ished an interagency task 
force for that purpose. HHS and Food stamp agencies are

assessing their quality control methods in six large States and

will provide INS with information on SAVE to help them increase

the utility of SAVE.

18
 " 
" 
APPENDIX 
COMMENTS ON DRAFT REPORT AND OIG RESPONSES

HHS comments on the draft report were received from the Assistant

Secretary of Planning and Evaluation (ASPE), the Administrator of

the Family Support Administration (FSA), the Administrator of the

Health Care Financing Administration (HCFA), and the Commissioner

of Social Security (SSA) ~ Also, comments were received from the

Inspectors General of the Departments of Labor (DOL), Education

(ED), and Housing and Urban Development (RUD); and from t~e

Commissioner of the Immigration and Naturalization Service.

More comments were addressed to the issue of cost-benefits than

to any other issue. Cost-benefit data were deseribed 'by ASPE and

FSA as incomplete due to the lack of labor costs, and by FSA and

DOL as inconclusive due to the lack of any comparison with the

savings and costs of traditional manual methods. According to

DOL, State Emplqyment agencies indicated that ~... in most cases

normal UI integrity operations, i.e., benefit payment control,

eligibility review program, etc., would have detected such alien

documents. II Both ASPE and FSA noted a lack of critical

discussion of INS' cost savings estimate. They were joined by

DOL in cautioning against misleading with incomplete, information.

OIG reSDonse. We agree that the data is incomplete and have

included a new section detailing the gaps in the evidence on

cost-benefits and have deleted the term, "net savings".

The effectiveness of manual verification systems used by State

agencies was'the subject of differing views. According to :SSA,

IRCA requirements that SAVE be used should not affect the low QC

error rates currently reported. These low error rates were seen

by INS as a reflection of ineffective manual verification. INS

notes that"... the variety of INS documents in' use, coupled with

the availability of fraudulent or counterfeit documents, demands

that INS r,emain a vital screen in any verification procedure."

OIG reSDonse. W~ have noted the paucity of data on which to

compare the relative accuracy of agency methods of verification

with INS' SAVE methods. ' We have also noted INS i view of the

relationship between agency methods and their low QC error rates.

Several comments questioned which State agencies actually had

SAVE pilot projects. The DOL advised that the California UI

agency never implemented its pilot project plan. It expressed

the view that the draft report appears to confuse SAVE with

secondary verification. ASPE commented that Florida had no pilot

UI proj ect . 
19.
 " 
," 
OIG response. We checked with UI agencies in the two states and,

as a result, deleted California from the list of UI pilots, while

retaining the Florida UI pilot. We clarified further that the

SAVE pilots indeed included both automated projects and manual

versions similar to secondary verification. Moreover, INS at the

time viewed these manual projects as SAVE pilots.

A comment by ASPE questioned the use of preliminary data from

Florida UI to suggest a deterrent effect on applicants.

OIG res90nse. We deleted the Florida data because of a court

decision that UI claimants had been denied when INS improperly

terminated their work authorization.

The inability of ASVI to provide PRUCOL information was the

subject of several comments. "The utility of the SAVE system for

human services agencies," FSA commented, "will depend largely

upon securing timely information about this group of aliens...".

According to INS, it has"... never been required to def ine and

does not provide PRUCOL to represent a class of alien or alien

status. For this reason, the status verification system should

not and cannot identify these types of aliens. This issue

requires careful consideration by the agencies concerned, but is

not a basis on which to judge the efficacy of the SAVE program."

A change in wording was suggested by SSA to show that individual

programs and not INS have the responsibility to make a PRUCOL

determination. It was pointed out by HCFA that there is now only

one definition of PRUCOL for Medicaid, the same as the one for

SSI. 
OIG reSDonse. We are making no change in our finding that many

State agencies felt the lack of PRUCOL information in AS 
 VI to be

a serious limitation. It is clear to us that state agencies use

different criteria for judging SAVE than INS does. We did change

our wording to show that Medicaid now used only the SSI

definition and that the responsibility for PRUCOL decisions is

the State agency's.

Several comments focussed on the process of secondary

verification. Concern with the timeliness of secondary

verification responses was expressed by DOL which noted that, as

a result of a court case, any and all initial UI claims for

benefits must be paid within 14 days of an eligible claimant's

first compensable week. On this point, INS noted that "secondary

verifications are a priority of the Service and the time required

to conduct these checks is always within an acceptable window

period. These procedures also ensure that no applicant is denied

benefits who is eligible."

20  , , 
'.  .  1',",\ 
OIG resDonse. We have included a reference to INS i notice of 
verification procedures of September 1987 which states that

responses to secondary verifications should be returned within 7

of these procedures. ' 
to 10 days and no later than 21 work days. We also noted INS'

view that no eligible applicant should be denied benefits because

Adverse publicity about using SAVE was pointed out as a possible

disadvantage of SAVE nQt included in the draft report. . It was

noted by DOL that California UI did not implement its SAVE pilot

because of threatened legal action and adverse publicity, and

that Florida also experi~nced adverse publicity after denials of

UI claimants were reversed by the' court. 
OIG reSDonse. 
We included a reference' to adverse publicity. 
HFCA, noting that the draft was silent on specific remedial

actions to increase the accuraay and comprehensiveness of SAVE,

recommended SAVE, be expanded to include certain persons who

receive ,amnesty and thus become eligible for partial Medicaid

benefits. . HCFA and FSA both urged that Social Security numers

be included on the AsvI display. HCFA also believed "that a

thorough and careful evaluation of the SAVE system must be

undertaken to determine whether it is indeed cost effective and

efticient, especially in States with small numbers of aliens".

OIG reSDonse. We are including these recommendations in our 
comments. Due to the recency of IRCA, the report contains no 
recommendations other than to encourage dialogue between INS and 
other agencies to increase the utility of SAVE by more closely 
'the users' needs. 
meeting 
INS comments that it "has been working closely with

representatives of the five affected entitlement disbursing

agencies to develop a systematic approach to the required

expansion of an alien status verification program, and to refine

the technical requirements to met these agencies' needs."

OIG reSDonse. We reiterate our support for interdepartmental

cooperation to increase the utility of SAVE.

21 
i