"'.
IMPLEMENTATION OF THE STATE

LEGALIZATION IMPACT ASSISTANCE

GRANTS UNDER THE 
IMMIGRATION

REFORM AND CONTROL ACT OF 1986

TEXAS
STA TE  OF 
VIC'SO 
'0 
"dla 
OFFICE OF INSPECTOR GENERAL 
OFFICE OF ANALYSIS AND INSPECTIONS 
OCTOBER 1989  . "
OFFICE OF INSPECTOR GENERAL

The mission of the Offce of Inspetor Genera (OIG) is to promote the effciency, effective
ness, and integrty of progrs in the United States Deparent of Health and Human Ser
vices (HS). It does this by developing methods to detet and prevent fraud, waste, and 
abuse. Create by statute in 1976, the Inspetor General keeps both the Secreta and the Con
gress fully and curently informed about programs or management problems and recommends
corrtive action. The OIG perform its mission by conductig audits, investigations, and in
sta 
spections with approximately 1,300  strategicaly located around the countr. 
OFFICE OF ANALYSIS AND INSPECTIONS 
This report is produced by the Offce of Analysis and Inspetions (OAl, one of the thee 
major offces within the OIG. The other two are the Offce of Audit and the Offce 
of Investi
gations. Inspections are conducted in accordace with professional stadads develope by
OAI. These inspetions 
ar tyically short-tenn studies designed to determe program effec
tiveness, effciency, and vulnerabilty to frud or abuse. 
This study was conducted to determne the effectiveness of Texas 
' implementation of the State 
Imgrtion 
Legalzation Impact Assistace Grats funds awarded under the  Refonn and Con
trl Act of 1986. 
The report was prepar under the dition of Don McLaughlin, the Regional Insptor Gen
eral, Office of Analysis and Inspections, Kansas City Region. Parcipating in this project
were the following people: 
Kansas City  San Francisco 
Hugh Owens,  Project Leader  Apryl Wllliams 
Raymond Balandron 
James Wolf 
Alicia Smith 
Headquarters 
New York 
Albert 1. N ace  Lucile M. Cop 
Debra Robinson  7 I 

IMPLEMENTATION OF THE STATE

LEGALIZATION IMPACT ASSISTANCE

GRANTS UNDER 
THE IMMIGRATION

REFORM AND CONTROL ACT OF 1986

TEXAS 
STATE  OF 
Richard P. Kusrow 
INSPECTOR GENERAL 
OAI-07-800 
OCTOBER 1989
 EXECUTIVE SUMMARY 
PURPOSE 
The purse of this inspetion was to determe how effectively Texas implemented the State 
progr, 
Legalzation Impact Assistace Grats (SLIAG)  to identify potential problems early 
in the proess, and to identify goo practices which 
al States could shar. 
BACKGROUND 
progr 
The SLIAG  was established under the Imgration Refonn and Contrl Act (IRCA)
of 1986 to reuce the fmancial burden of providig public assistace, public health assistace, 
and educational services to eligible legalize aliens. In Fiscal Year (F) 1988, $928.5 milion 
progr 
in  funds were alocated to States, and funds will continue to be alocated thugh FY 
adistrtive 
1991. These funds also cover  costs for implementing SLIAG at the State and 
local levels. Payments are made for public assistace activities generally available to all 
neey 
individuals and public health assistace services offere under the States' public health 
progrs. The payments also cover educational services designed to assist eligible legalize 
aliens to attain a satisfactory level of performance in school and to achieve English language 
necessar to beome 
proficiency and citizenship skils  pennanent residents. The Famly
Support Admnistrtion (FSA) is responsible for adnistering the program. 
Because SLIAG was a new progr, FSA realze that problems would surace early in its 
implementation. In addition to the norm diculties encountere in creatig new processes 
and proedures, FSA recogniz that SLIAG would have unique problems. Some of these 
issues include the diversity of programs which SLIAG encompasses, cultu and language
barers associated with the servce population, maintaning confidentiality of informtion, and 
tie fres 
the extremely short  for the  process. 
grt award 
METHODOLOGY 
In response to the anticipated diculties with implementing SLIAG, FSA requested that the 
Ofce of Insptor General (OIG) conduct reviews in 10 States to determne the progress of 
States ' implementing this progr. The FSA selected nine States and the Distrct of Columbia 
beause of the varety of program they offere, the number of eligible legalize aliens in the 
population, or the amount of the grant. The nine States ar Arzona, California, Colorado, 
Florida, llinois, Massachusett, New York, Texas, and Washington.  . .
strctu 
Interviews based on  discussion guides for each major program 
ara, as well as 
documentation fuished by FSA and State and local offcials, built the base of infonnation for 
ths repol1. This report represents the review conducte in the State of Texas and reports on its 
progr 
implementation of the SLIAG  as of August 1988. 
Both FSA and Texas were commtted to identifying problems and developing innovative and 
effective solutions for them. Immedately following our on-site visits, FSA was given an 
outline of the State concerns identied in this report 
FINDING: Since  1987, FSA ha held national conferences and issued informtion to States 
on implementing the SUAG program. 
The FSA held several national conferences beginning in 1987 to share 
information with States on SLIAG legislation, the implications for States, the 
cdsts. 
application process, and the documentation of 
The FSA also provided States with "Question and Answer" issuances and 
demographic data from the Immgration and Naturalization 
Servce (IS). 
FINDING: Texas established a strture to identify organizational and program needs. 
The Executive Dirtor of the Texas Health and Human Services Coordinating 
Council is the single point of contact. This council is the grtee agency for 
SLIAG fundig purses. This argement works very well for a State in 
which none of the parcipating agencies for SLIAG is the grntee agency. 
FINDING: Tex also took steps to docwnent  control disbursemenrs. 
exenditues and 
Planed modfications to the State s computerized systems provide for the 
captu of SLIAG-related costs under distinct SLIAG expenditue codes. 
One county we visited during the inspection maintaned 
eligibilty data on the 
mai computer at the county auditor s offce. Once eligibilty infonntion has 
ben obtaned on an eligible legalized alien, this process wi facilitate venfymg 
the status of the applicant and reportng costs for SLIAG- funded service s,  1 . 
Verifyng eligible legalize alien status for educational programs will be though 
reviewing the 1-688, TemporaResident Car, issued by INS. A continual 
verification process is made to assure that only the intended population is using 
the SLIAG-funded educational progrms. 
The Texas Education Agency has modfied the Stadad Application Form for 
Adult Education to include the costs considere allowable for SLIAG funding 
areas identified on this application for providers of educational 
puroses. The 
servces ar salar costs, contracted servces, supplies and materials, trvel, and 
capita outlays.

Neverteless, there are some funds contrl vulnerabilties. 
FINDING: The FSA's definition of public assistance includes some public health activities 
which created administrative and service delivery problems for 
Texas public health agencies. 
The reclassifcation of public health and menta health programs is 
important as 
it requires identifying individuals reeiving servces in order to document 
SLIAG-related costs. In adtion, asking patients about their legal status may 
adversely influence their wilingness to access public health and mental health 
servces. 
FINDING: The FSA application review process created a numer of signifcant 
problems for 
Texas. Also, the FSA's application review process interfered with the State s abilty to plan for 
services. 
Delay in FSA issuing the implementing regulation resulted in the State 
inabilty to properly plan for SLIAG. 
Numerous policy misinterpretations and disagreements resulted 
beause FSA 
did not provide definitive wrtten instrctions to assist Texas in understanding 
SLIAG application requirements. 
The time frames were too short for submittg the initial SLIAG application 
FSA review and comment, and revisions of the application. 
implementing SLIAG-funded programs was delayed beause of a significant 
delay in notifying Texas of the 
grt awar.  progrs 
No formal appeals process exists if  or costs ar denied in the fIrst level 
reVIew. 
FINDING: Conflicting interpretations of the term "public charge" ha caused uncertainties 
in the alien population as to what services they are entitled to receive without fear of 
deportation. 
FINDING: State guidelines are needed to determine allowable costs in public assistance and 
public health assistance. 
As mentioned earlier, FSA and Texas have alady initiate action on some of the 
recommendations made in this report. Steps have ben taen by FSA to provide States with 
more speifc, fonnal guidelines for identifying and documentig actual program and 
admnistrative costs. However, adtional actions ar necessar in other aras on the par of 
FSA and Texas. 
RECOMMENDATION: The FSA should reconsider its position to 
classif certain public 
health services as public assistance and make appropriate adjustments to this position. 
RECOMMENDATION: The FSA should mae its application and grani process more 
orderly. Specifcally, FSA should 
provide definitive wrtten instrctions on the SLIAG application requirments 
and establish a dialogue with Texas on SLIAG policy, compliance, and reportng 
issues to minimze the confusion that occured in the initial application process; 
tie 
ensur that suffcient  is allotted to the application proess including Texas 
intial application, FSA ' s review and fonnal commnt, Texas' consideration of 
FSA comments and negotiation of disputes, and its submission of the revised 
application for FSA approval; 
develop an appeals process to use if program or costs assoiated with providing 
servces ar denied in the initial application process; and 
ensur that the grant award proess for approved applications is timely to permt 
implementing planned SLIAG programs. 
RECOMMENDATION: The FSA and the INS should fuher clarif what is meant by 
public charge" and widely disseminate this informtion to the alien populatin who have 
raised concerns about its resident statu.  , . 
RECOMMENDATION: The Texas Departent of Humn Services should develop a 
methodology to identify allowable public assistance program costs. Also, the Tex 
Department of Health should develop guidelinesfor all providers of public health assistance 
services indicating those costs that are allowable for SUAG purposes. 

COMMENTS 
drt 
The FSA and the State of Texas both commnted on the  report. They generaly agree 
with our fmdings and recommndations. Both reported having taen a number of steps to 
improve implementing SLIAG. Their comments 
ar include as Appendices B and 
respetively.  ....... ............ . ........ ................ . ....... ......... ...  .........................   ............. ........  ..... ......... .... ...... ... .... ......... ........
..... ......................... .... ...... 
TABLE OF CONTENTS 
EXECUTIVE SUMMARY 
I NTRO D U CTIO N 
....................................................... ................................................ 1

TEXAS' ORGANIZATIONAL STRUCTURE 
............................................. 3

FINDINGS AND RECOMMENDATIONS .................................................................. 5

Pu bl i c Assistance............................. ............................................. ............ 6

Pu bl ic Health Assistance ...  ..................... 8

Mental Health.... ......... 

Ed ucation ....... ........  ................................................. 13

Crosscutting Issues ... 
................... .... ............ ... 15

OIG RESPONSE TO COMMENTS ........................................................................

APPENDICES 
APPENDIX A: Good Practices............................................................ .

APPENDIX B: FSA's Comments 
.......................................................... B-1

APPENDIX C: Texas' Comments........................................................
 INTRODUCTION

PURPOSE 
The Famly Support Admnistrtion (FSA) reuested that the Offce of Inspetor General 
(OIG) conduct an inspection in nine States and the Distrct of Columbia to determe how 
effectively the States implemente the State Legalzation Impact Assistace Grts (SLIAG) 
progr 
awarded under the Imgration Refonn and Control Act (ICA) of 1986. The 
inspection included reviewing mechanisms in place to identify these funds and determning
whether present or projected policies and proedures adere to FSA guidelies. The FSA also 
was interested in identifyg potential problems early in the process and any goo practices 
which all States could shar. This report presents the results of the inspetion perting to the 
State of Texas. 
BACKGROUND 
Under IRCA, eligible legalize aliens may apply for permanent residency within a I-year 
period after they are ftrst eligible (Le., by the 31st month after they receive temporar resident 
status) . 
This new population will increase the demand for State public assistance and public health 
assistace services significantly. It wil also increase the demand for State educational 
services as these new residents obtan English language and civic skills neeed to become 
S. citizens. 
To help States defray many of the costs of providing public 
assistace, public health 
assistace, and educational servces to eligible legalze alens, IRCA authorize $1 bilion 
each year from Fiscal Year (F) 1988 thugh 1991 for SLIAG grts, less an amount 
identied as the "Federa offset." With few exceptions, eligible legalize aliens 
are ineligible 
progrs 
for federaly funded public assistace  such as Aid to Famlies with Dependent 
Childrn (AFC), foo staps, and Medcaid. The "Federal offset" is the estimated cost to 
the Federal Government of providig these services or benefits to those few legalized aliens 
who ar eligible for them. In FY 1988, the law alocated $928.5 millon to States. 
To receive SLIAG funds, States must apply to the FSA Division of State Legalization 
Assistace, which is responsible for approving applications and adnistering 
the program. 
The application must be approved in tota for a State to reeive any SLIAG funds. The FS,\ 
also provides States with tehnical assistance on policy issues and on the methods used to 
determne costs and verify actual costs.  . .
The basic reuirment for States to claim reimburement is that costs must be alowable, 
reasonable, and allocable. State public assistace and public health assistace program must 
be the same ones available to the general public. States cannot create new program in these 
areas speifcaly for eligible legalize aliens. However, States may create new or addtional 
progrs 
education  for eligible legalize aliens. States may also clai reimbursement for 
progr 
admnistrtive and SLIAG adistrative costs. 
Reimburement for public assistace and public health assistace is limite only to the amount 
of State and local funds expended for SLIAG-related costs. The maimum SLIAG 
reimbursement for educational services is an average of $500 per year per eligible legalized 
alien. Determning progr adnistrtive costs is made in accordace with the fmal 
regulation at 45 CP 402.22. 
The FSA is responsible for admnistering the program Because SLIAG was a new program 
FSA realiz that problems would surace early in its implementation. In addition to the 
norm dificulties encountered in creatig new processes and proedures, FSA recognizd 
that SLIAG would have unique problems. Some of these issues include the diversity of 
progrs 
which SLIAG encompasses, cultural and language baners 
associated with the 
service population, maintaiing confidentiality of information, and the extrmely short time 
fraes for the grant award process. 
METHODOLOGY 
The FSA selected nine States and the Distrct of Columbia for the inspetion beause of the 
varety of program offered the number of eligible legalize aliens in the population, or the 
amount of the  nine States are Arona, 
grt. The  California, Colorado, Florida, llinois, 
Massachusetts, New York, Texas, and Washington. This report reviews Texas 
progr 
implementation of the SLIAG  as of August 1988. 
strctu 
Pror to conducting the inspetion, the OIG develope  discussion guides for each 
major program activity at the State and local levels. Interviews were held in 
Austi with 
appropriate sta, includig the single point of contact and State representatives from public 
assistace, public health assistace, and education. In adtion, appropriate staf were 
interviewed in Travis County agencies. Also intervewed were sta frm providers of 
services in health and education. The purse of these local contacts was to obtan 
information from local governing boes as to their planned implementation of the SLIAG 
progr. 
The informtion obtaned from using discussion guides and documentation furished by FSA 
and State and local officials create a base of information as to implementing the SLIAG 
progr. Information-gathering included reviewing policies and procedurs established by 
the State for adnistering SLIAG funds, and compilng SLIAG application data and 
progr 
information on  parcipation.  , .
TEXAS' ORGANIZATIONAL STRUCTURE

Each State designated a single point of contact.to adnister and coordnate the SLIAG 
progr. 
For the State of Texas, the contact is the Executive Director of the Texas Health and 
Human Servces Coordiating Council. The State legislatu has designate the council to 
the State agency to apply for SLIAG funds. The council is chared with applyig for these 
funds and distrbutig them to agencies responsible for providing servces to newly legalized 
aliens in accordce with IRCA. The coordiating council is also responsible for coordiating 
State initiatives, application development, continuing oversight, and drwdown of Federa 
funds. 
In Texas, the program components adnistering the SLIAG progr, and their 
responsibilties, ar as follows: the Deparent of Human Services (public assistace), the 
Deparent of Health and the Deparent of Menta Health and Mental Retadation (public 
health assistace), and the Texas Education Agency (education). The inspetion revealed that 
the counties exercise signicant autonomy and control over programs and other matters within 
their respetive jursdictions. 
PUBLIC ASSISTANCE 
The Deparent of Human Servces is responsible for State adistrative functions 
progrs 
associated with effectively implementing public assistance  to be funded by SLIAG. 
An assistat commssioner of the Famly and Childrn s Services has ben appointed to 
admnister functions funded by SLIAG. This sta is respnsible for the agency s support of 
emergency assistace programs admnistere by local agencies. The deparnt, thugh the 
county strctur, wil grt benefit payments to eligible legaliz aliens for emergency relief. 
This includes providig utiities, foo, housing, and clothing though vouchers and purhased 
services. 
PUBLIC HEALTH ASSISTANCE 
dit 
The Deparent of Health is responsible for the  adnistration of SLIAG funds for 
general public health assistance. This responsibilty rests in four offces in the deparnt: 
Community and Rural Health, State Health Data and Policy Analysis, Grats Management, 
and Budget A coordnator wil be responsible for SLIAG activities. A data analyst will 
provide data analysis of reimburable costs and the eligible population. Financial coordnators 
will prepare and approve contrts with providers, prepar report for the coordiatig 
council, and monitor individual providers to valdate SLIAG fundig.  pp 

'" 
and 
orantion 
Ret 
prde 
progr Tdhe iS.LI AG fnncnos 
EN,.AL HEAL,.H  Menta  heth  ser  The 
Depar  of Menta Hceaoltht ainod n of menta  seces to 
an 
he  diti  of the Budget and Faisscsaul rce. and suppovehealth 
,rocgortaitCe d iuntdie  athden  iusti  oversght. quality  an cmnunity menta 
provide  by State faciliti
depar 
prgr opte
the menta health  centers. 
menta retadati 
funde educati 
adisteg the SLlG- nate those 
agenCY to 
EOUCA110N 
Educati  A'gfen c ipso rseitsiponnss ihbalvee f orn atOdre iss isgun ate in thbaeyt  oa.n  Eelleemmeennttaa aanndd
The -rxas  education is 
prgrs in the State. 
SLIAG. A SLIAG c

functions relat to  oonato andr nanY ad utlth eoduugcba lto cal scbool distrcts. Adult 

seonda educati  ar prvide p contives

senda educati 
adult education 

thugh 63 
prvided 
 FINDINGS AND RECOMMENDATIONS

Both FSA and Texas were commtted to identifying problems and developing innovative and 
effective solutions for them. Immedately following our on-site visits, FSA was given an
outle of the State concerns identied in this report 
Since 1987, FSA has held national conferences and issued information to States 
FINDING: 
progr. 
on implementig the SLIAG 
The FSA held several national conferences begining in 1987 to shar 
infonnation with States on SLIAG legislation, the implications for States, the 
application process, and the documentation of costs. 
The FSA also provided States with "Question and Answer" issuances and 
demographic data from the Immgration and Natuzation 
Service (INS). 
FINDING: Texas established a structure to identify organizational and program needs. 
The Executive Director of the Texas Health and Human Services Coordinating 
Council is the single point of contact. This council is the grtee agency for 
SLIAG funding puroses and is the coordinating and oversight entity for all 
State agencies involved in health and human servces. This argement works 
well for a State in which none of the parcipating agencies for SLIAG is the 
have goo rappon with the varous agencies 
grantee agency, and the staf 
involved in SLIAG. 
FINDING: Tex 
also took steps to document expenditures and control disbursements. 
Planned modcations to the State s computerized systems provide for the 
captue of SLIAG-related costs under distinct SLIAG expenditu codes. 
One county we visited durng the inspection maintaned eligibilty data on the
mai computer at the county auditor s office. Once eligibilty informtion has
ben obtained on an eligible legalized alien, this process will faciltate veriying 
the status of the applicant for SLIAG-funded servces. Weekly reports are  prepared for the auditor s offce on the servces and benefit dollars involved. 
futu 
For  reference, the local welfar offce can obtan information readly on 
each eligible legalize alien for which eligibilty has been determned. 
Verifyng eligible legalize alien status for educational programs will be though 
reviewing the 1-688, Tempora Resident Cad, issued by INS. Eah student 
signs in for each class attended using the assigned "A" number frm the card. A 
continual verication process is made to assur that only the intended population 
is using the SLIAG-funded educational programs. 
The Texas Education Agency has moded the Stadad Application Form for 
Adult Education to include the costs considered allowable for SLIAG funding 
purses. The areas identied on this application for providers of educational 
services ar salar costs, contracted servces, supplies and materials, trvel, and 
capita outlays.

Neverteless, there are some funds contrl vulnerabilties. Findings and reommendations 
concerning these vulnerabilties follow under major topic areas. 
PUBLIC ASSISTANCE 
Assistance or Service Activities 
Public assistace services to be funded by SLIAG include Medcaid health car services, 
Medcaid foster car assistace, the Early Periodc Scrning and Diagnostic Treatment 
progr, the Famy Planning Title XI program, the Vendor Drg progr, the Emergency 
Nutrtion Tempora Emergency Relief program, and the local pass-though program. The
deparent also admisters the Famly Planning Title XX progr as a public health program 
for SLIAG. 
No new progrs have ben established. Famly Planning is provided diectly by the State. 
progr ar 
Other  provide thugh counties or providers. The Emergency Nutrtion 
Tempora Emergency Relief program is adnistere by the counties and community action 
agencies jointly. 
A local county offce indicated that services provided ditly by the county or under contrJ(( 
are nutrtion, utiities, renta assistace, and mecal servces, which include hospitaIJphY"l(l. 
services, denta car, transporttion, the battered womens' program, and indigent burials The 
local welfar offce has access to the county auditor  ma computer data base for eligl  lIlty 
information.  Documentaton of Eligible Legalized Alien Stats 
Eligible legalize aliens will be identified generally in the sam maner as they ar identified 
for al other progrs. A few adtional questions wil be asked and the INS car information 
wil be obtaned. Periodc reviews wil be made at the counties and providers to assur the 
intended population is getting SLIAG-funded services. At the county level, scrning and 
in-depth application forms wil be use to obta necessar information. 
Program Costs 
The State intends to develop guidelines to capture program costs expended for services at the 
servcing level. The State wil identify the eligible legalize alien and then tabulate costs 
expended for services rendere. When services ar fuished under contrct, quarerly reports 
incur. 
wil be submitted by providers reuestig payment from the State for costs  Periodc 
sampling wi be conducted at these providers to assur the costs ar correct. Submitted 
invoices will be valdated on a sample basis. Two object expenditue codes will be added to 
the systems for controllng costs. 
At the tie of ths inspetion, the State had provided no guidace to the counties for 
determning allowable program costs. However, one county we visited durng the inspection 
had initiate action on its own to identify program costs by establishing cost centers, 
identiying foo vouchers for eligible legalize aliens, workng with the county auditor 
offce which reords costs and pays bils, setting up line item accounts for each 
category-SLIAG-Foo, SLIAG-Rent, and SLIAG-Utilities, and staping "SLIAG" on each 
voucher identied for eligible legaliz aliens going to the auditor s offce for payment. This 
problem is adessed in grater detal in the section dealng with crosscuttng issues. 
Administrative Costs 
To identi adistrative costs, the State wil determe the tota number of persons receiving 
the service at the county or community action agency. Then the State wil determne the 
number of eligible legalize aliens out of that tota. Finally, the State wil tae that ratio and 
multiply it by the tota adistrative cost to determne the shar pertnent to SLIAG. The
deparent has an indit cost allocation rate established by the Deparent of Health and 
Human Servces (HS). While the FY 1988 application only include State costs, the FY 
adistrtive 
1988 updte and the FY 1989 application adde local pass-though  costs, 
which had previously ben overlooked (only State costs had ben include not county costs).  These costs are to be reimbured by SLIAG. The costs were based on data from eight 
counties and then projected to all counties. 
At the county level, adnistrtive costs will be determned on the basis of a sample. The 
SLIAG usage wil be determned as a  adnistrtive costs. There is no 
percentage of the tota 
indict cost rate at the county level for public assistace. 
Drawdown of Funds and Cash Balances 
The procedurs for drawdown ar being worked out by the coordnatig council. Generaly, 
the State does not make cash advances to counties or providers. However, if cash balances 
were create at the counties or providers, then subseuent paymnts would be reuced. 
PUBLIC HEALTH ASSISTANCE 
Assistance or Service Activities 
The Deparent of Health provides or contracts for a wide range of public health services, 
includig: 
health protection; 
health promotion/health education; 
prevention, detection, and referral of diseases and disabilties; 
ambulatory car/emergency medcal servces; 
short-term institutional care;

long-term institutional car and alternatives;

health care costs and health professions;

statistics buraus; and 
maternal and child health.  . .
Other public health progrs have ben designate as public assistace progrs for puroses 
of SLIAG. These ar: 
chronically il and disabled children;

habiltation and rehabiltation (kidney health car);

health car costs and health professions (primar car); 
University of Texas system professional services; 
Texas Tech Health Science Center professional servces; 
women, infants, and children nutrtion; and

maternal and child healthfamly planning.

progrs 
No new  have ben added beause of SLIAG fundig. The State furishes services 
though its public health hospitas, and contract services are 
furished though the varous 
county health deparnts. The same services offere by the State ar generally offere at the 
county level. Whether a county contrcts with the deparent depends upon the servces
rendere. Some servces ar also provided thrugh contrct with other than county providers. 
Documentaton of Eligible Legalized Alien Stats 
For public health servces, the percentage method is use to determne the ratio of eligible 
legalize aliens to the population served. Data from the HHS ar use to determe the 
number of eligible 
legalize aliens and speial agrcultura workers. 
progr 
For public health assistace  considere public assistace, an individual eligible 
legalize alien determnation must be made. Varous INS documents ar being considered for 
use in veriying eligible legalze alien status. 
FINDING: The FSA' s definition of public assistance includes some public health activities 
which created adinistrative and service delivery problems for Texa public health agencies. 
Severa program adnistere by the Deparent of Health ar considered public assistance 
progrs 
for SLIAG reimbursement purses. The distinction is importt beause 
incur 
identiying a servce as public assistace requirs documenting costs  for individual 
eligible legalize aliens served. If a program or servce is considere public health, the 
population ratio method for establishing costs can be used. Applying ths method, costs are 
determned by comparng the percentage of eligible legalze alens using the service to the  percentage of the general population using the sam servce. This percentage is applied to
tota program costs to determne how much can be reimbursed with SLIAG funds. 
While there is no quarl with the logic of FSA's defiition of public assistace versus public 
health, the distiction created serious adnistrtive and servce delivery problems for public 
health agencies. These agencies, not the public assistace agencies, must develop and 
implement new processes for identiying individual eligible legaliz aliens in order to 
document costs. Public health offcials in Texas ar concerned that asking patients about their
legal status wil seriously impact the willingness of patients who ar ilegal residents to access 
public health services. These peple often enter the countr with highly contagious diseases
and nee tratment immately. The effect of this policy on the public health in general is 
not known at this time. 
RECOMMENDATION: The FSA should reconsider its position to 
classif certain public 
health services as public assistance and make appropriate 
adjustmnts 10 this position. 
Program Costs 
The State wil use a cost allocation method to determne actual costs. This wil allocate all 
pertnent, allowable costs to arve at an average cost per client for those public health 
progrs 
considere public 
assistance. For public health assistace, the percentage or ratio 
method wil be used. To arve at actual costs for the 130 public hospitas (public is defined 
where ownership is by a county or city or hospital distrct), the State intends to use the 
followi  g methods: 
For Inpatients - The State wil use cost and  frm 
bilng information  these 
hospitas to obtan a daly rate. This rate wil be use to identify the cost of 
servces for an eligible legalized alien. 
For Outpatients - At the time of the dn-site review, the State planned to use 
actual charges for servces to eligible legalize aliens. 
The reports submitted by providers of servces (e.  , famly planing servces) will list all 
revenue sources. This information will enable the State to assur agaist duplicate fundig. 
Desk audit proedures wi be instituted to verify that services were 
rendere and payment 
would match the servces rendered.  " .
No guidelines had ben reeived at the county level on determing actual costs. The 
Deparent of Health was workig on them at the tie of this review. 
Administratve Costs

A ratio of eligible legalze alens to the tota State population wil be use to arve at 
admnistrtive cost. The ratio method descbe above would keep the admistrative costs 
separate. 
For one county health deparent, an indiect cost rate of 23 percent had ben established. 
Puhase orders and invoices (vouchers) will also be use to identify SLIAG adnistrative 
costs. 
Drawdown of Funds and Cash Balances 
The drawdown function is the responsibilty of the coordnating council. The State s policy is 
progr 
to issue a 2-month advance to get a new  underway. Large cash balances could occur 
when SLIAG funds are requested, reeived, and not spent. If such cash balances ar identified 
and the cause is related to SLIAG, subsequent SLIAG funds would be reuced. 
MENTAL HEALTH 
Assistance or Serve Activitis 
The activities of the Deparent of Menta Health and Menta Retardation to be rendered and 
funded under SLIAG are client and famly support services, hepatitis-B screening and 
vaccination, and genetics screening servces. No new progrs have been established by the
deparent. Plans ar to clai only those costs for services classified as public health 
assistace. 
Other services are provided by the deparent thugh menta hospitas, nonprofit commun1!)' 
menta health centers, and State mental health centers. The deparnt did not apply for 
approval of these services for SLIAG funding beause the services according to FSA 
POlll:Y 
are considere as public assistace. The deparent either did not want to or could not 
identiy eligible legalze alens seking these services. By law, the deparent is requ1I"d II)  furish these services. If the services were classifed as public assistance, deparent 
personnel were concerned that some persons would not apply for menta health services 
beause the deparent would have to seek personal data to obtan SLIAG-related eligibilty 
information. 
Also, if the deparent would choose to claim costs for these services on each of the 
approximate 200,00 persons now receiving services, the State estiates that it would be 
tie. 
necessar to add 55 persons to conduct an additional half hour of intervew 
Documentation of Eligible Legalized Alien Stats 
The Deparent of Menta Health and Menta Retadation plans to use a ratio or percentage of 
the eligible legalze alens to total service population which is to be consistent with the 
SLIAG regulations. No distinction is made between eligible legalize aliens and special 
agrcultur workers. Both alien categories ar base on data frm HHS, but no effort is made 
to separte them. 
Program Costs 
Actual costs wil be based on budgeted costs and then corrted by actual cost outlays at the 
end of the State s fiscal year (August 31, 1988). Vouchers are sent in for payment and 
checked to determine if categories of services have been rendered. The proess involves 
allocation of costs to each service, number of clients proposed to be served, quarerly reports, 
fis. 
and yearly audits of units (e.g., regional clinics) by certfied public accountat 
Modfications wil not be made to the accountig' system as there wi be no diculty 
identiying the SLIAG-related services. 
Administratve Costs

A ratio of eligible legalze alens to the tota Texas population wil be use to determine 
indit 
admnistrative costs for SLIAG purses. For  costs, the deparnt wil use the rate 
assigned by the cognizt agent.  DrawtWwn of Funds and Cash Balances 
The drawdown function wil be the responsibilty of the coordnatig council. The deparent 
wil obtai SLIAG funds thugh the interagency voucher system. As reimburement is made 
for expenses, there should not be cash balances for SLIAG. 
EDUCATION 
Assistance or Serve Activities 
The Texas Education Agency will reeive SLIAG funding for two tyes of educational 
progrs:  seonda 
elementar and  education and adult education. 
Eligible legaliz aliens in elementa and seonda schools will reeive the following 
supplementa and basic 
instrctional services: 
special language programs; 
remedal programs in the 
basic skils; 
guidance and counseling services; and

special materials and supplies.

wi 
Adult education  include English, language instrction, and citizenship traiing. 
Documentaton of Eligible Legalized Alien Stats 
The norm enrllment proess will be used for eligible legalize aliens entering elementar 
and seconda schools. For adults, the Texas Education Agency wil reuest the 1-688, 
Tempora Resident Cad, and the "A" number be obtaned. The fIrst surey for data on 
eligible legalize aliens in elementa and seonda schools was taen in May 1988 (an 
update was planned to be conducted in August/September 1988). The agency had to wait for 
enrllnts 
August/September 1988  to obtan adtional inormation. The surey showed 
38,00 eligible legalize alens; FSA then reuced that number to 32 00 and then to 13,00.  , . 
The reason for this reduction was that most school distrcts could not meet the statutory and 
00 
regulatory requirements for funding. The agency estimated about 390, adults wil qualify 
for enrllment by 
October 1988. 
At the provider level, the documenting involves verifying eligibilty status thugh the 1-688 
card issued by INS. All students will sign into each class using their assigned "A" number. 
Program Costs 
For eligible legalize aliens at the elementa and seonda levels, the State wi use the 
progr  sta 
average cost per student ($2,500) per year to document  costs. The agency 
indicate that this is the only Federa program where an average cost has ben use. The 
agency is concerned the Fedral Government wil not allow an average cost, forcing them to 
identiy actual cost. In adtion, a student neeng bilingual training wi cost about $700 
more. For adults, the cost of education is about $3 per hour, and using tutors would incrase 
this figu. Any program income would be deducte from SLIAG paymnts. Invoices 
Stada 
submitte by contrctors would also be reviewed by fISCal agents. The  Application 
Fonn for Adult Education contans information covering allowable 
costs such as salar, 
contrcted services, supplies and materials, travel, and capita outlays. Al costs must be 
reasonable, alowable, and allocable to SLIAG. 
Administrative Costs

Dirt adnistrtive costs will be determned by using time sheets designed to captur 
expended time on a day, weekly, or monthly basis. For indict costs, the deparent wil 
use the rate assigned by the cognizat agency. Using time studies is consistent with existing 
procedurs for other progrs adnistere by the deparent. 
Drawdown of Funds and Cash Balances 
The drawdown functions ar performed by the coordnating council. The deparent can 
advance up to 25 percent of the estimated cost for the school year at the beginnig of the year 
to some school distrcts for elementa and seonda educational servces to eligible 
legalize aliens. Cash advances ar also made to providers of adult education services. No 
request must be made for this advance. Information on cash balances at providers and 
educational institutions would be included in their regular monthly or quarerly reports. If  large cash balances were noted, the next alotment to the provider would be reuced. The 
incur. 
SLIAG funds wil be expended on the basis of costs ,
CROSSCUTTING ISSUES 
The lateness in issuing the final regulations has caused problems for the State. The State 
could not awar contracts until the regulation proess was finalize. This has reuced the 
durg 
period of retroactivity  which providers would clai SLIAG funds. 
FINDING: The FSA application review process created a nuer of signifcant problems for 
Texas. Also, the FSA's application review process interfered with the State s abilty to plan for 
services. 
Delay in FSA issuing the implementing regulation resulted in the State 
inabilty to properly plan for SLIAG. 
Numerous policy misinterpretations and disagrments resulted beause FSA 
did not provide definitive wrtten instrctions to assist Texas in understading 
SLIAG application reuirments. 
The time frames were too short for submitting the initial SLIAG application, 
FSA review and comment, and revisions of the application. 
Implementing SLIAG-funded progrs was delayed because of a delay in 
grt 
notifying Texas of the  award. 
No formal appeals process exists if progrms or costs ar denied in the first level 
review. 
Accordig to fial regulations published Marh 10, 1988, States had to submit the FY 1988 
application no later than May 16, 1988. Revisions to the application had to be 
submitte by 
July 1, 1988, and the FY 1989 application had to be submitt no later than July 15, 1988. 
Applications were to conta brief descrptions of the States  progrs  estiates 
or services, 
progr 
of the States' SLIAG-relate costs for each  or activity for that parcular fiscal year 
(includig information on the number of eligible legalze alens residing in the State), and a 
brief explanation of the methodology used to estimate these costs.  Due largely to these short ti fres, FSA provided no fonnal feeback on revisions 
necessar in the Texas FY 1988 application. The informtion was transmitted by telephone or 
fres 
in meetings. The time  to make necessar revisions did not accommodte the 
organzational strctu or the nee to communicate with or sek approval from the progr 
components impacted by revisions reuested by FSA. The Texas grant awar was delayed 
approximately one month due to an errr by the Grants Admistration sta in sending the 
award to an incorrt addrss. 
The FSA would not  funding nor would FSA conditionally approve applications. 
grt paral 
If changes were not made in accordace with FSA suggestions, the enti application was 
disapproved. In adtion, FSA did not provide Texas with an appeals process when programs, 
costs, or methodologies were not approved. Texas had no reoure other than to delete the 
progr entily 
from its application or forfeit all of the SLIAG funds for that fiscal year. 
RECOMMENDATION: The FSA should mae its application and grant process more
orderly. Specifcally, FSA should 
provide definitive wrtten instrctions on the SLIAG application reuirments 
and establish a dialogue with Texas on SLIAG policy, compliance, and reporting 
occur 
issues to minimize the confusion that  in the initial application process; 
tie 
ensur that sufficient  is allotted to the application proess including Texas 
initial application, FSA' s review and formal commnt, Texas' consideration of 
FSA comments and negotiation of disputes, and its submission of the revised 
application for FSA approval; 
progr 
develop an appeals process to use if  or costs associated with providing 
servces ar denied in the initial application process; and 
grt 
ensur that the  award proess for the approved applications is timely to 
permt implementing planned SLIAG programs. 
FINDING: Conflicting interpretations of the term "public charge" ha caused uncertainties 
in the alien population as to what services they are entitled to receive without fear 
deportation.  State and local offcials report that the alien population often misconstre the term "public 
progr 
charge." These alens ar afaid that accepting certn alowable SLIAG  benefits ,. 
could subject them to possible deporttion. To compound this problem, State program 
managers indicate that some Texas counties have reeived conflcting information from local 
INS offces on the subject of "public chare." This has cause varous interpretations of what 
constitutes "public charge" by different counties. 
RECOMMENDATION: The FSA and the INS should fuher clarify what is meant by 
public charge" and widely disseminate this informtion to the alien population who have 
raised concerns about its resident statU. 
FINDING: State guidelines are needed to determine allowable costs in public assistance and 
public health assistance. 
At the time of this inspection, the State had not inform the counties of FSA guidelines for 
determning allowable costs in public assistance program under the SLIAG program. 
However, since the State had not issued any guidelines, the county visited durg the 
inspection was moving ahead to develop its own guidelines for determning these costs. 
Also, guidelines had not ben reeived at the county level covering determing actual public 
health assistace program costs. County health sta indicate that they were told the 
Deparent of Health was working to draw up these guidelines. 
ar 
The State of Texas should recognize that there  limitations on the diection that FSA can 
provide which wil cover the varous internal processes and operations of every State. 
Guidelines must be flexible enough to accommte varations in State systems and internal 
processes. Ultimately the State, as the grantee, is responsible for development and 
progr 
implementation of SLIAG  activities, and for the fiscal documentation of costs and
expenditurs. 
RECOMMENDATION: The Texa Departent of Humn Services should develop a 
methodology to identif allowable public assistance program costs. Also, the Texas 
Department of Health should ensure that all providers of public health assistance services are 
informed of FSA guidelines  costs. 
for identifing allowable  OIG RESPONSE TO COMMENTS 
drt 
The FSA and the State of Texas both commnt  on the  report. 
THE FSA 
agr 
The FSA has generally  with the OIG report findings and reommendations. The FSA 
progr 
has taen a number of steps to improve implementig the SLIAG  including 
clarfyig program policies and proedures. The State had severa concerns about how FSA 
admnistered the program. We have moded certn aspets of the report base on FSA' 
comments. 
The FSA questioned the statement that the new population would significantly incrase public 
assistace and public health assistace servces. Early estiates indicated that large numbers 
reogni 
of aliens would qualy to access the SLIAG program. The report  that inonnation 
obtaned durg the review determned that substatial incrases in workoads and 
expenditurs could occur in these aras as well as in education. However, we understad from 
reent discussions with States' offcials that demand for services nationaly is faling behind 
earlier projections. 
The FSA's definition of public assistance included some public health activities which crated 
admnistrative and service delivery problems for Texas public health agencies. The OIG 
recommended that FSA reonsider this position. 
priary 
The FSA replied that they se this position  as an issue of identifying costs and that 
they will work with the States to develop method ,of docume,ntig costs which ar consistent 
with FSA's respnsibilties as stewars of public funds. We believe that FSA's actions to 
identiy alternative method is responsive to our concerns. 
We contiue to believe that a strct interpretation which permts public health costs to be
clai 
only for speifc eligible legalze alens is burdensome to the States. In many cases, 
the interpretation would reuir considerable revisions to the States' system or statutory 
agr 
requirments. However, we do  that FSA's use of alternative systems, such as the Cost 
Documentation System and a revise population ratio method system which reflects usage, 
would be a positive effort to enhance cost effectiveness without reuirg States to develop 
new systems or make considerable revisions to present systems. The population ratio method 
could be revise to consider not only eligible legalize aliens in the servce population but 
also usage of those servces by these aliens based on information alady obtaed from 
progr 
experience. Where appropriate, other alternatives might be use which would  produce a more effcient system for the States and addess congrssional intent that 
the States 
would not be required to establish new or elaborate systems. 
progr 
We report that no fonnal appeals proess exists if  costs ar denied in the ftrst level 
agr 
review. We  with FSA's statement that the Grat Appeals Boar does have jursdction 
over matters for withholdig and repayment of SLIAG funds. However, it was the States 
concern that an effective appeals mechanism be in place for issues involving program or 
costs at the ftrst level of FSA' s review in the application proess. 
The FSA made numerous comments to clarfy certn matters of fact, policy, or procedure. 
We have included these comments verbati in Appendix B. 
The Stae of Texas

The State has generaly agree with the OIG report findings and reommendations. Their 
comments are included verbatim in Appendix C. Since the time of the on-site review
, the 
State has taen significant steps to effectively implement the SLIAG program thugh 
procedur and system changes.

The State commnts indicate that guidelines have ben develope for determning allowable 
progr 
costs for use by county agencies and providers of servces. In adtion, Texas has 
clarfted State organizational responsibilties concerning implementig the SLIAG progrm 
where several State agencies are involved. 
Recognition is made of the State s concern regarding classifying some public health assistace 
activities as public assistace. Reference should be made to our comments above concerning 
this issue as adssed to FSA.  APPENDIX A

GOOD PRACTICES
 A number of practices have been identified that other States could shar. 
The Executive Director of the Texas Health and Human Services Cordnating Council 
is the single point of contact. This council is the grtee agency for SLIAG fundig 
purses and is the coordnating and oversight entity for al State agencies involved in 
health and huma services. This argement works well for a State in which none of 
the parcipating agencies for SLIAG is the grante agency, and the sta have goo
rapport with the varous agencies involved in SLIAG. 
The Travis County Welfar Offce maintaned eligibilty data on the main computer at 
the county auditor s offce. Once eligibilty information has ben obtaed on 
eligible legalized alien, this process wil faciltate veriying the status of the applicant 
for SLIAG-funded servces. Weekly repons ar prepared for the auditor s offce on 
the services and benefit dollars involved. For futu reference, the local welfare offce 
can obtan information readiy on each eligible legaliz alien for whom eligibilty has 
ben determed.

Verifying eligible legalizd alen status for educational program wil be though 
reviewing the 1-688, Tempora Resident Car, issued by INS. Each student signs in 
for each class attended using the assigned "A" number from the card. A continual 
verication process is made to assur that only the intended population is utilizing 
progrs. 
SLIAG-funded educational 
The Texas Education Agency has moded the Stadad Application Form for Adult 
Education to include the costs considered allowable for SLIAG fundig 
purposes. The 
areas identied on ths application for providers of educational services 
ar salar 
costs, contracte services, supplies and materials, trvel, and capita outlays. 
Planned modfications to the State s computerize systems provide for the capture of 
SLIAG-relate costs under distinct SLIAG expenditu codes.  APPENDIX B

FSA' S COMMENTS
 : .
,-

"-'"
APPENDIX B

DEPARTMENT Of HEALTH & HUMAN 
SERVICES 
Family Support Adminislraliol1
f" 
Memorandun 
June 27. 1989 
Dale: 
From:  cting Assistant Secretary

f or 
Family Support

Draft Report: 
Subject: OIG 
Implementation of the State Legalization
Impact Assistance Grants Under the Immigration Reform and Control

Act of 1986 - State of Texas 
(OAI-07-88-00449)
To: 
Richard 
P. Kusserow 
Inspector General

At tached are the Family Support A

above draft report. Many  inistration comments On the 
of our comments are tech 
due to the complexity of the legislation and the fact that r.a tU 
ical
SLIAG program was very new at the time of the  the
review. 
We appreciate the assistance and cooperation we have received

from you in response to our request to conduct this round of

rev iews of 
the SLIAG program. 
The reports we received are very
useful to us in understanding how States are implementing the

program. 
De Bert

l: t tachren t  OIG DRA 
REPORT: Implementation of the
state Legalization Impact Assistance Grants
Under 
the Immigration Reform and Control Act of 1986 
state of Texas 
The Family Support Administration' 
three sections:  s comments are divided into
Comments on background information and other
narrative material that does not relate directly to the draft
report' 
s findings, comments on the 
findings, and responses to the
draft report's recommendations.

Narrative: 
Page 1 (Background) -- The draft report says, "This new

population will increase the demand for state public assistance

and public health assistance services significantly.

The draft

report isn't clear whose conclusion this is or upon what data and

analysis the conclusion is based. The final report should

clarify these points.

In the course of implementing SLIAG, we have discovered that

neither state and local public health programs nor, with few

exceptions, public assistance programs, inquire about legal

status. 
This suggests . 
that at least Isome , aliens were using these
services before legalization and that newly legalized aliens do
not represent a "
new population" for public assistance and public 
heal th assistance services. 
Preliminary cost data from States
suggests that newly legalized aliens are accessing public

assistance services at rates far lower than the general

population. 
There are indications that a backlog of public
heal th needs 
existed and was identified during the medical
examinations required of all applicants for legalizations.

However, there is no data to suggest 
that, other than this

temporary bulge in demand for public hea'
lth services, newly

legalized aliens will generate a significant increase in demand

health assistance or public assistance 
for publi'c  services. 
Page 2 (Background) -- The draft report says, "states must

develop a method acceptable to FSA for determining administrative

costs. " We note that several methods for determining the share

of administrative costs in ongoing programs that are allocable to

SLIAG and which are acceptable 
 a priori are specified in the

regulation at 45 CFR 402.
administrative costs  22 (b) . The process of determining  LIAG
(those costs incurred in administering the
SLIAG grant itself), like all costs associated with administering
HHS grants, is governed by 45 CFR Parts 74 and 92 and relevant
OMB circulars.
 Page 12 (Education -- Documentation of Eligible Legalized Alien 
status) -- The draft report says that the State survey of 
eligible legalized aliens in elementary and secondary schools
showed 38, 000 eligible legalized aliensl "FSA then reduced that 
number to 32, 000 and then to 13, 000. The reason for this 
reduction was that not all eligible legalized aliens in 
elementary and secondary schools will need the services funded by 
SLIAG. 
That statement is incorrect in several respects. Not all school 
districts or all eligible legalized alien children within a 
school district are eligible for funding. Therefore, Texas'
ini 
tial estimates were unrealistically high because they failed 
to consider the statutory and regulatory limitations on the use 
purpose. 
of SLIAG funds for this  Because it applies the 
definitions and provisions of the Emergency Immigrant Education
Act 
(EIEA) to use of SLIAG funds for educational services, IRCA 
stipulates that SLIAG funds may be expended for educational 
services only on behalf of eligible legalized alien students who
have attended U. S. schools for fewer than three complete academic
years. 
Additionally, to receive any SLIAG funding for elementary 
and secondary education, a school district must have 500 eligible 
legalized alien students with fewer than three complete academic
years in u. 
s. schools, or such students must make up 3 percent of 
students in the school district. 
In evaluating the State's estimated number of eligible legalized

alien students, the only factor we considered was the likelihood

that the estimated number was a reasonably accurate reflection of

the number of students that could be expected to meet the above

requirements. We used this criterion because, under the SLIAG

allocation formula, a State's estimates of its costs directly

ffect the amount of money that it and every other state
receives. 
(Half of funds are allocated on the basis of costs. 
Thus, we had a responsibility to ensure that estimates were 
reasonable, and to apply the same criteria to all states. The 
criteria employed in our review are specified in the SLIAG 
regulation at 45 CFR 402.44. 
The state education agency's approved FY 1988 application 
estimated that there would be 14,808 "countable" eligible 
legalized alien children in Texas elementary and secondary 
school. This number represented one-third of 44,425, the total 
number of eligible legalized alien children 6-17 in the state of
Texas. 
(Subsequent information from the Texas Education Agency 
indicates that this estimate, in fact, was mucb too high.

Page 13 -- The draft report says that the lateness of issuing

final regulations (which were published March 10, 1988) "has

reduced the period of retroactivity during which providers would

claim SLIAG funds.
 The SLIAG regulation was delayed because we received so many

comments on the proposed rule
, which was published in August

1988. The comments were far-reaching, and deserved full and.

careful consideration. This 
process took time, but we believe

the final product was Duch improved as a result. 

activities for which SLIAG funds could be used was ehxep arnadnegde
 of

. dramatically in the final 
rule, as a result of our analysis and

consideration of comments we 
received. The 
final rule also

opted a more equitable method for allocating 

funds. 
We do not bel 
ieve that the timing of the final regulation'
publ ication adversely affected States' ability to claim 
costs.
SLIAG funds are available for public assistance and educational

services costs incurred from October 

1, 1987, for public health

assistance costs incurred from May 
5, 1987, and for SLIAG

administrative costs incurred after November 

6, 1986. The

methodologies for establishing 
costs did not change from the

proposed to the final rule. We have worked extensively with

States to help them establish costs for periods during which they 
did not have tracking systems in place. 
Findings: 
Finding:	
Since 1987, FSA has held national conferences and 
issued information to States on implementing the SLIAG 
program. 
Comment:	 Since the OIG's onsite visits in August 
1988, we have
continued to provide assistance to States. 

We have
conducted several more workshops and meetings to assist

states in implementation. In October 

1988, we issued a

compendium incorporating the extensive formal guidance

previously provided to States on methods of cost

documentation. We also 
have provided assistance to

individual States in the form of correspondence,
telephone consultation, and onsi 
te technical
assistance. We 
are in the process of conducting
initial program reviews of the major States, including

Texas, which we visited in April 
1989. We 
request that

the final report reflect this continuing dialogue with

States. 
Finding:	
Texas also took steps to document expenditures and

control disbursements.

Comment:	 On page 6, the draft report lists Family Planning under
the Public Assistance category. 
Family Planning is
included in the statutory and regulatory definition of 
health 
public  assistance, and is included under the 
public health assistance category in 

Texas' approvej
 application.
The final report should correct this
statement. 
Page 8 of the draft report says, "For public health

assistance programs considered public assistance, an

individual eligible legalized alien determination must

be made.  That statement is incorrect and should be

corrected in the final report.

The regulation allows costs for public assistance

programs to be established by 
(1) establishing costs

associated with identified eligible legalized aliens,

(2) using a statistically valid sample of the program'

(3) "
caseload, or  any other reliable method of cost 
calculation, subject to Federal review" 
(45 CFR
402. 21). We are making available to states a Cost 
Documentation System, initiated by HHS, which will 
enable them to establish costs based on a blind match 
of social security numbers of program participants. 
have worked with States to develop other alternative 
methods that do not involve inquiring into the 
immigration status of any individual. 
We have 
distributed information on these alternative methods to
States. 
Finding: 
The FSA' s definition of public assistance includes some 
public health activities which creates administrative 
and service delivery problems for Texas public health
agencies. 
Comments:  The draft report is in error in saying that the

definitions of pUblic health and public assistance

create service delivery problems for Texas public

health agencies. By law and regulation, all programs

or activities under both categories must be generally
available. In practice, this 
means that SLIAG funds 
are available only to reimburse costs in on-going,
generally available programs. In 
most programs,
immigration status is not a condition of eligibility.
If the alien is eligible for services, he or she would 
receive those services, regardless of whether the costs
were reimbursed under SLIAG. 
The final report should
clarify this point. 
The draft report notes that "there is no quarrel with

the logic of FSA's definition of public assistance

versus public health, " but does not explain that logic.
The final report should explain that the regulatory 
definitions of public assistbnce and public health are 
based directly on IRCA.  Programs of public assistance are defined as programs
that "
provide for cash, medical or other
assistance.. . 
designed to meet the basic' subsistence Ot 
heal th needs of individuals" (section 204 
emphasis added). Con  istent with IRCA's eCxj)p l(i2)c i(tA)
inclusion of medical assistance under the public 
assistance category, State or locally funded programs 
that provide medical treatment to needy individuals are
public assistance. 
IRCA defines programs of public health assistance as

programs which "provide public health services,
including immunizations for immunizable diseases,

testing and treatment for tuberculosis and sexually-

transmitted diseases, and family planning services"

(section 204 (j) (3) (A) ). These statutory definitions

and the legislative history indicate that Congress

intended to allow certain traditional public health

functions under the public health assistance category

and medical assistance to the needy under the public

assistance category. In 
implementing SLIAG, we have
followed that statutory framework. 
We have defined
public health assistance as, among other things, 
programs or activities that "
are provided for the
primary purpose of protecting the health of the general
2). 
public" 
(45 CFR 402. The scope of programs included
in that regulatory definition of public health

assistance goes far beyond the specific activities

listed in the Immigration Reform and Control Act of

1986 
CIRCA), which created SLIAG. 
Regarding the draft report's concern that aliens "often
enter the country with highly contagious diseases and 
need treatment immediately,
. the final report should
note that the treatment of dangerous contagious 
diseases, including tuberculosis and sexually 
transmitted diseases, is included in the statutory and 
regulatory definition of public health assistance. 
The public assistance/public health assistance 
categorization issue is primarily one of cost 
documentation requirements, not the allowability of 
costs associated with any particular health program. 
Texas would like to use the population ratio method to 
establish costs for all programs run by the Department
of Health. Implicit in this 
method is the assumption
that eligible legalized aliens will access programs in 
the same frequency and at the same cost as the general 
population. We do 
not believe this assumption to be

appropriate for medical assistance programs that 
provide treatment to needy individuals. To the
contrary, the information that we have to date  . .
indicates that allowing Use of the population ratio 
method for these programs generally would overstate
costs 
, dramatically in some cases. However
be willing to allow Use of the population ratio method

, we would

for any program for which there is an 
 empirical basis
to indicate that doing so would not overstate costs.

The regulation also permits establishing costs Using

any other reliable method of cost calculation, Subject

to Federal review.

We have continually offered to

work with States
, including Texas, to devise acceptable

alternative methods.

FSA realizes that many public assistance and public 
heal th programs don't routinely collect information on
immigration status 
collect social secu, ribtuyt ,n uwme hbaevres .f ound that many do
and devoted substantial staff resouTrhcaets  itso  wdheyv ewleo pfiunngd ead 

system that will match the social security numbers of 
program participants with those of newly legalized
aliens. 
This system will give States information on
the number of newly legalized aliens participating in a

program and the cost of services to them. 

available and allows States to establish costs for FY

It is now

1988 as well as current and future years. 

sent State SLIAG Single Points of Contact suggestions

Recently, we

for other Possible methods for establishing costs.

None of these alternative methods would require setting

up new administrative mechanisms or checking status of

all program participants.

We have worked closely with Texas to develop 
methodologies to document costs for all programs in the
State' 
s approved application. 
Finding: 
The FSA appl 
ication process created a number of
significant problems for Texas. Also

application review process interfered with the State' 
, the FSA'

ability to plan for services.

Comment: 
The draft report says that the time period for

sUbmission, review

, revision and approval of the

initial application was too short. 

would have been preferable to have haWde  aa glroeneg etrh apte riito
 d

of time between the PUblication of the final regulation

and the deadline for submission and approval of FY 1988

and FY 1989 applications. 

should note that However, the final report

, because of the way IRCA set up the

allocation formula, one major reason for the compressed 
timeframe  as that we could not award funds to any
State until all States' applications had been 
In order for us to run the allocation formula approved. 
, which  IRCA requires to include estimates of costs, we must

have approved estimates for all States before we can

calculate States' allocations. 
The draft report says that "numerous policy
misinterpretations and disagreements resulted because 
FSA did not provide definitive written instructions to 
assist Texas in understanding SLIAG application
requirements. 
Had there been more time, we would have 
communicated more extensively in writing. 
However, the
final report also should note that some of Texas' 
misunderstandings resulted from the State's failure to 
provide us initially with complete information about 
the programs and activities included in its 
application. The lack of adequate information required 
extensive dialogue and subsequent revision of the
State' 
s application. 
The report says no formal appeals process exists if

programs or costs are denied. The Grant Appeals Board

has jurisdiction over issues related to the withholding

and repayment of funds. For other matters, the State

may follow normal procedures for disagreeing with an

agency finding. 
ecom."tendations : 
Thr  e of the draft report' s recommendations propose action on the 
part of FSA:

Recommendation:	 The FSA should reconsider its position to 
classify certain public health services as 
public assistance and make appropriate 
adjustments to this position. 
Response:	 As discussed above, the," 
primary issue relating 
to the definitions of public assistance and 
public health assistance is one of cost 
documentation. Texas wants to use the 
population ratio method for all programs run by 
its Health Department. The final report should 
clarify whether the OIG is recommending that we 
allow use of the population ratio in programs 
where, as discussed above, its use would likely
overstate actual costs. 
We believe that using the population ratio

method for all heal th depar ment programs would

be inconsistent with our responsibility to

exercise fiscal responsibility in administering

SLIAG funds. However, we recognize that some

States may encounter difficulties in
 establishing actual costs
, especially where ELAs

are a small percentage of a State'
s population

or for programs that few ELAs access. 

We will

continue to work with States to ensure that a 
method is available to allow them to establish 
actual costs for each program in their approved
applications 
, consistent with our 
responsibilities as stewards of public 
funds. 
Recommendation: 
The FSA grant process should be made more

orderly. 
Response: 
The draft report'
s recommendation refers to the

FSA grant process
, but the specifics indicate

that it is referring to the SLIAG application

and grant award process. 
The language of the

recommendation should be more specific.

We agree that the application process should be

conducted in a more orderly fashion than was the

case for the initial sUbmissions. 

As the draft

report indicates, the time frames for the FY

1988 and FY 1989 application processes were

necessarily short. 
In effect, the States and we

had to complete two appl 
less than a year.  ication processes in

We do not expect similar

problems for the FY 1990 and FY 1991 application

processes. 
To ensure that States have adequate time to

prepare their FY 1990 applications based on

empirical data, we have extended the deadline

1. 
from July 15 to October 
Additionally, we

have encouraged States to submit as early as

possible any new programs

, questions, or issues

and have advised them that they may submit all

or portions of their applications at any 
time.

In order to reduce the possibility of

misunderstanding, we have advised States that we

will communicate all substantive questions and

concerns on their FY 1990 applications in

wri ting, as was done for States' end-of
 year
reports. We 
issued extensive written guidance

on the FY 1990 application process and the

standards we will apply.

The draft report also recommends that we develop 
an appeals process to use if programs or costs 
associated with providing services are den 
i ej
the initial applications process. 
We do not

believe such a process is 
necessary. The
 Department' 
s Grant Appeals Board has
jurisdiction over cases involving the repayment

or withholding of funds. Normal.

the Department are open to States cthhaantn edliss awgirtehei
n

with decisions made during the Course of 

application review.

, Recommendation:

The FSA and the Immigration and Naturalization
Service 
(INS) should further clarify what is
meant by "
public charge" and widely disseminate
this information to the alien population who

have raised concerns about its resident 

status. 
Response: 
Under IRCA and the Immigration and Nationality
Act 
, the INS alone is responsible for 
determining whether individuals are likely to

become public charges. 

FSA cannot establish

policy on this issue. 
Nor can FSA disseminate

information directly to the alien population.

INS is precluded by IRCA from providing names

and addresses of eligible legalized aliens to

outside agencies.

However, we agree that it is important that all 
concerned know INS policy on the public charge
issue. 
INS representatives have made
presentations at virtually all of our workshops

and conferences. At these meetings

been able to ask questions and recei,v eS tdaitreesc th
ave

information from the INS. 

We have communicated

to States all information provided to us by INS

on this and other pertinent issues

continue our policy of disseminatin,g  aanndy 
will

relevant information that we receive.

The Department also has indicated its support

for a legislative change to allow States to use

a small portion of their SLIAG grants to inform

temporary residents of the requirements for

adjustment to lawful permanent resident status

and of the rights and responsibilities of lawful

temporary residents. 
Such Use is not perri 
under current law.  tted . .
APPENDIX C

TEXAS' COMMENTS
 . . .. '
APPENDIX C

TEXAS HEALTH AND HUMAN SERVICES 
COORDINATING COUNCIL

311-A EAST 14TH ST. 
AUSTIN. TEXAS 78701 
July 
18, 1989 
Mr. Richard P. Kusserow

Inspector General

Office of Inspector General

Department of Health and Human
Services

Washington, D. C. 
20201 
Dear Mr. Kusserow:

Thank you for the opportunity to review and comment on the

entitled "Implementation of the State Legalization Impact  report

Assistance Grants Under the Immigration Reform and Control

1986 - State of Texas.  Act of

The report findings are based on a program inspection by the

Office of Inspector General conducted in August

SLIAG program was still in the early development, 1988, when the

phase. 
then, the state agencies have developed and refined prograSmin
 ce
rules 
, procedures, provider manuals, and contracts among service
providers. Our 
comments thus include updated 
well a  corrections of facts reported.
 information, as 
The comments correspond to the sections contained in the 

report.
xecutive 
ecommendatio 
4. 
Page ii and page 
Administration  The finding that the Family Support
is true.  (FSA) held conferences and issued information
However, the timing gf the conferences and
issuance of information limited their usefulness. 
example  For 
, FSA held a conference in October, 
states in establ  1988, to assist 
ishing costs for the end-of-
December 31, 1988. Two  year reports due

months was not adequate time to

establish costs for most programs

, particularly since many

programs were relying on the anticipated Use of the Cost

Documentation System
this month.  , which only became available to states

Similarly, FSA did not provide demographic data
needed to establish end-of

year costs for public health 
programs until March, 
1989.  Mr. Richard P. Kusserow

July 18, 1989

Page 3

Page iv and page 9. The state strongly supports' the 
OIG
recommendation that FSA reconsider its position to classify

certain public health services as public assistance and make

appropriate adjustments to this position. 

The state

believes the recommendation to be in line with the original

intent of the congressional legislation implementing 

SLIAG. 
Texas' Organi zational structure

Page 3, "General.  , The various categories 
of SLIAG funds
are not administered by single agencies
, as indicated in the
report. The Department of Health, the Department of Human
Services 
, and the Department of Mental Health and Mental 
Retardation each administer public health assistance and 
public assistance programs under SLIAG. 
The Texas Education
Agency administers the educational component of SLIAG. 
The
Texas Health and Human Services Coordinating 

Council, is

responsible for the overall state administration and

implementation of SLIAG in Texas. 
Page 3, "Public Assistance. 
The Department of Human

not 
responsible for state administrative
Services is 

functions associated with effectively implementing public 
assistance programs to be funded by SLIAG. 
Each of the
heal 
th-related state agencies participating in SLIAG have 
programs classified as public health assistance and public 
assistance. Each 
agency is responsible for effectively

implementing rules, procedures
, and provider manuals for

their respective programs.

Department of Human Services staff in the Emergency

Assistance Programs branch are directly responsible for the

implementation of the City/County Pass Through and the

ENTERP/SLIAG programs. 
They are also responsible for

coordinating the overall Department of Human Services

implementation of other SLIAG public assistance programs

including Medicaid Heal th Care Services, Early Periodic

Screening Diagnosis and Treatment 
(EPSDT) program, the
County Indigent Health Care program, the Vendor Drug 
program, Medicaid Foster Care Assistance program, and Family
Planning Title XIX program. 
The Department of Human
Services does not, through the county structure, qrant 
benefit payments to ELAs for emergency 
relief. The agency
will, however, work with local government agencies to 
obtain
SLIAG reimbursement for their expenses in serving 
ELAs.  Mr. Richard P. Kusserow

July 
18, 1989 
Page 4

Page 3, "Public Health Assistance.  The Department of
Heal th  not  responsible for the direct administration of
is 
SLIAG funds for general public health assistance. 
Each of
the health-related state agencies participating in SLIAG 
have programs classified as public health assistance and 
public assistance. Each 
agency is responsible for

effectively implementing rules
, procedures, and provider

manuals for their respective programs. 
Assistance 
Publ ic 
Page 6, "Assistance or Service Activities. 
The Texas
Department of Human Services public assistance services that 
are eligible for SLIAG reimbursement include Medicaid Health
Care Services 
, Medicaid Foster Care Assistance program,
Early Periodic Screening Diagnosis and Treatment 

program (EPSDT)
, Vendor Drug program
, Family Planning Title XIX
program, the Emergency Nutrition/ Temporary Emergency Relief

(ENTERP) pr gram, City/County Welfare Public Assistance Pass

Through program, and the County Indigent Health Care

program. The Department of Human Services also administers

the Family Planning Title XX program as a public health

program under SLIAG.

Page 6, "Program Costs. 
The Department of Human Services

has now established multiple object expenditure codes for

audi t purposes. The agency has also provided complete and

detailed guidance to city and county public assistance

agencies on how to identify ELAs
, determine allowable

program costs, and submit claims for reimbursement.

Page 7, "Drawdown of Funds and Cash Balances.

The state

administers the SLIAG program on a reimbursement basis

e., funds are only drawn down once documented expenditures
have been made. 
Adult education funds are disbursed on a 
thirtY-day advance basis. 
There are no cash balances. 
Coordinating Council has establ ished  The
reimbursement/payment
procedures for state agencies contracting with the 
Council.
The fOllowing cost documentation must accompany each request 
for reimbursement: 
- Drawdown Program Cost Summary

- Request for Reimbursement/Cash Management Report

- Self-Monitoring Checklist

- List of Subcontractors 
(associated with the drawdown)
 Hr. Richard 
P. Kusserow

July 18
, 19

Page 5

Public Health Assistanc,

Page 7
, "Assistance or Service Activities.

assistance and public assistance programs at the Department

Public health

of Health have not been correctly classified in the 
The following programs are public health assistance 
report.
programs: 
- Health protection

- Health promotion/health education

- Prevention, detection, and referral of diseases

and disabilities

- Ambulatory care/emergency medical services

- Short-term institutional care

- Long-term institutional care and alternatives

- Health care costs and health professions

- Statistics bureau

- Maternal and child health

Other public health programs have been designated as pUblic

assistance programs for purposes of SLIAG

These are: 
reimbursement. 
- Chest hospitals

- Chronically ill and disabled children

- Habilitation and rehabilitation 

- Health care costs and health prof(eksisdinoenys  h(epalrtihm acrayr
 e)

care) 
hospitals
- Publ ic 
- University of Texas System professional services

- Texas Tech Health Science Center professional

services 
- Women, infants

, and children nutrition

- Certain maternal and child health programs

paqe S
, "Assistance or Service Activities.

should read: 

No new programs have been added Tbheec apuasraeq roafp
 h

SLIAG funding. The 
state furnishes traditional public

health services through its regional public health clinics

and contract serVices are furnished through the various

county health departments. 
. state are generally offered Tahte  tshaem ec osuenrtvyi cleesv eolf.f er
 ed by the

county contracts with the department depends upon services

rendered.  providers.  Whether a
with other S"olomec asle"r vices are also provided through contract
Page 9
, "Program Costs.

public health assistance The paragraph should read: 

For
, the ratio method will be used to
 - , 
Mr. Richard P. Kusserow

July 18
, 1989

Page 6

determine costs. 

For public assistance programs within the
Department of Health, actual costs will be determined.
arrive at actual costs for the public hospital (public is

defined as ownership by a county or city or hospital

district), the State intends to use the fOllowing 

methods: 
For Inpatienti 
- The state will Use cost and expense

rinaftoerm. ation from these hospitals to obtain a daily expense
This rate will then be used to determine the cost of 
services for an eligible legalized alien.

Outpatients 
For  - The Department reimburses the billed
amount for an outpatient visit multiplied by each hospital'

Medicaid outpatient interim 

Ratio of Cost to Charges"  rate, often called a hospital'

actual charges to reimburse outpatient hospital services

indicated in the report.  (RCC). (The State does
 Dot  Use
, as 
The Department of Health has established and distributed 
quidelines  to counties for determining costs. 
Page 10
, "Drawdown of Funds .
and Cash Balances.
administers the SLIAG program on a reimbursement basis

i. e.  The state

, funds are only drawn down once documented expenditures
have been made. 
Adult education funds are disbursed on a

thirtY-day advance basis. 

Coordinating Council has estTahbelries haerde  rneoi mcbausrhs ebmaelnatn/cpaeysm.e
 nt 
The
procedures for state agencies contracting with the 
The following cost documentation must accompany each request
Council.
for reimbursement:

- Drawdown Program Cost 
Sumary
- Request for Reimbursement/Cash Management Report

- Self-Monitoring Checklist

List of Subcontractors 

(associated with the drawdown)

Kental Healtb

Page 10
, "Assistance or Service Activities.

passisrtaonce agnd prublaic amssistansce :pro grams at the Department

Public health
of Mental Health and Mental Retardation are not accurately

. classified. The 

following are public health assistance

- Hepatitis-B screening and vaccination

Genetics screening

- Mental health program administration

- Central administration

C-6  Mr. Richard P. Kusserow
July 
18, 1989 
Page 7

Other public bealth programs bave been designated as public

assistance programs for purposes of SLIAG

These are: 
reimbursement. 
- Campus-based residential treatment and habilitation

- CommunitY-based services

- Facility management and support

- Community MH 
centers residential services 
- Community MH 
centers management and support
- Case management services

- Client and family support services

- Autism services

The agency will Use the POpulation ratio method to claim

costs for public health assistance activities. 

will claim costs for pUblic assistance programs Using the

The agency

FSA Cost Documentation System when the system becomes fully

operational and available to the 

state. 
Page 10, "Assistance or Service Activities. 
apply for approval of all programs listed aboveThe agency did
the programs classified as public assistance 
, including 
1988 and FFY 1989 state applications. 
, in the FFY

activities were approved by HHS and listTehde  apsu b"l
ic assistance

programs until such time as the agency could accpoluancte hfoolrd etrh"e

costs of services to eligible legalized 

intends to Use the FSA Cost Documentationa lSiyesntse.m  Tthoe
  
agency
establ ish costs 

for these programs when the system becomes

fully operational and available to the state.

Page 11, "Documentation of Eligible Legalized Alien Status.

The Department of Mental Health and Mental Retardation plans

to Use the population ratio method to claim costs for public

bealth activities. The 

Use of this method does not require

that the agency distinguish between individuals who applied

under Section 245A and Section 

210. 
amnesty applicants are considered eligBiobtlhe  claetgeagloirzieeds  aolfiens

once they have received temporary resident 

status. 
The agency will claim costs for public assistance programs

using the FSA Cost Documentation System when the system

becomes fully operational and available to the 

state.
Page 11
, "Program Costs. 
the Department of Mental HeaAltt ht haen dt iMmeen toafl  tRheet airndtaetrivoine wwsa
 s

uncertain about how to identify and document SLIAG-related

costs for mental bealth programs in the public assistance

category. The 
description of program costs in the report
 Mr. Richard P. Kusserow

July 
18, 1989 
Page 8

applies to the usual procedure for disbursement of state

funds to community MH centers, and n2 to SLIAG '
reimbursement procedures. 
The agency intends to claim costs for public assistance 
programs using the FSA Cost Documentation System when the 
system becomes fully operational and available to the state. 
The statement that modifications will not be made to the

accounting system is incorrect. The state agencies

participating in the SLIAG program account for SLIAG-related

reimbursements under distinct internal cost centers or

program activity codes.

Page 11, "Administrative Costs. 
The statement regarding
administrative costs is correct as it applies to program 
administrative costs under public health activities. 
this time the agency does not identify SLIAG administrative
costs. 
The agency may claim administrative costs related to 
use of the FSA Cost Documentation System. 
Education 
Page 12, "Documentation of Eligible Legalized Alien Status. 
The normal enrollment process will be used to identify 
eligible legalized aliens entering elementary and secondary
schools. In 
SLIAG adult education classes, the adult 
education directors will request documentation of resident 
status and will accept students with I-688A or 1-688 cards. 
Adult education directors will only request SLIAG 
reimbursement for costs incurred by students who have 
temporary resident status, i.e., students with 1-688 cards.

The Texas Education Agency reduced the estimated numbers of 
eligible legalized aliens in elementary and secondary 
schools for purposes of estimating costs in the FFY 
1988 
state application at the request of the FSA. The reason for 
not 
because the services were not needed 
the reduction was 

by eligible legalized alien students in elementary and

secondary schools. Rather, most school districts could not

meet the FSA requirement that school districts 
identi fy 500

students or 3 percent of the student population as el 
ig ible 
and  the requirement that no eligible
legalized aliens 

legalized alien student who had received more than three
years of educational instruction in u. 
S. schools be counted 
toward the 500 student/3 percent threshold requirements. 
Four school districts qualify for SLIAG reimbursement for 
FFY 1988 and FFY 1989.  Mr. Richard P. Kusserow

July 18, 1989

Page 9

Texas has enrolled approximately 111,000 eligible legalized
alien students in adult education classes as of March, 
1989. 
Page 12, "Program Costs.  The description of program costs

for elementary and secondary school students is basically
correct. 
Since the average cost per year of education for 
eligible legalized aliens at the elementary and secondary 
levels exceeds the $500 average limit, school districts will 
request $500 per eligible student. 
The average cost of education for adults varies by region of 
the state and depends on local costs for teacher salaries,
materials and supplies, and other related costs of service. 
Page 13, nDrawdown of Funds and Cash Balances. 
The 
procedures outlined for drawdown of funds accurately 
describe the Texas Education Agency policy for reimbursement
under the Adult Basic Education program. This procedure for
disbursement of SLIAG funds was under consideration at the

time of the August interviews, but was not the established

funds distribution policy of the Council. 
In December,
1988, the FSA sanctioned the advance of funds equal to 
thirty-days anticipated disbursements for the cost of 
education services. The Texas Education Agency adjusts each 
adul t education cooperative' s request for thirty-days
advance funds based on the previous month' 
s actual cost
documentation. There are 
no cash balances. 
Cross-Cutting Issues 
Page 13. '
inding that the
The state concurs with the 
lateness in issuing the final regulations has caused 
problems for the state in implementing SLIAG. The 
FSA 
issued a policy change in september, 1988, to permit service
contracted providers to claim costs of services for the 
period before the issuance of federal regulations provided 
that costs are fully documented and reasonable, allowable,
and allocable to SLIAG. 
However, providers continue to have
difficulty identifying and documenting costs for the period 
before the issuance of the federal regulations. 
Page 14. The state strongly supports the recommendation

that the FSA grant process be made more orderly, including

the development of an appeals process to use if program or

costs associated with providing services are denied in the

initial application process.
 . . 
, "

'1i 
Mr. Richard P. Kusserow

July 
18, 1989

Page 10

Page 15. The 
state endorses the recommendation for the FSA

and the INS to clarify what. is meant by "public charge" and
widely disseminate this information to the alien population 
who have raised concerns about resident status. 
Two of the stated purposes of the inspection were to identify

potential problems early in the process and to identify good

practices which could be shared with all states. 

agrees with the intent of these purposes and wishesT hteh astt atthee
  
ereasrullites ro.f  the inspection could have been accomplished much
Problems continue to be identified by the state and by
FSA, leading to delays in claiming FY 1988 

practices" from other states have yet to be csohsatrse.d  Ailns aon y kgionodd of

useful format.

Again, we appreciate the opportunity to provide comments. 
need further clarification or  If you

information, please contact me or

Marguerite Rivera directly at, (512) 463-2195. 
Sincerely, 
ff'l 
Patrice Thomas

Executive Director

cc:	
Governor William P. Clements

Lieutenant Governor William 
Hobby

Speaker Gib Lewis

Representative Debra Danburg

Polly Sowell

Gloria ROdriguez