IMPLEMENTATION OF THE STATE

LEGALIZATION IMPACT ASSISTANCE

GRANTS UNDER THE 
IMMIGRATION

REFORM AND CONTROL ACT OF 1986

STA TE OF ILLINOIS 
'!IlVICE$. 
'0 
1f"dIa 
OFFICE OF INSPECTOR GENERAL 
OFFICE OF ANALYSIS AND INSPECTIONS 
OCTOBER 1989  " -
OFFICE OF INSPECTOR GENERAL

The mission of the Offce of Inspector General (OIG) is to promote the effciency, effective
progrs 
ness, and integrty of  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. Created by statute in 1976, the Inspector General keeps both the Secreta and the Con
gress fully and curently informed about programs or management problems and recommends 
corrctive action. The OIG performs its mission by conducting audits, investigations, and in
spections with approximately 1,300 staf strategically located around the countr. 
OFFICE OF ANALYSIS AND INSPECTIONS 
This report is produced by the Offce of Analysis and Inspections (OAI), 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 accordance with professional 
stadards developed by 
OAI. These inspections ar tyically short-term studies designed to determe program effec
tiveness, effciency, and vulnerabilty to fraud or abuse. 
This study was conducted to determne the effectiveness of Ilinois ' implementation of State 
Imgrtion 
Legalzation Impact Assistace Grats funds awarded under the  Reform and Con
trol Act of 1986. 
The report was prepard under the diction of Don McLaughlin, the Regional Inspector Gen
eral of Region VII, Offce of Analysis and Inspections. Parcipatig in this project were the 
following people:

Kansas City  San Fransisco 
Project Leader  Apryl Willams 
Hugh Owens, 
Raymond Balandron 
James Wolf 
Alicia Smith 
Headquarters  New York 
Albert J. Nace  Lucile M. Cop 
Debra Robinson  IMPLEMENTATION OF THE STATE

LEGALIZATION IMPACT ASSISTANCE

GRANTS UNDER THE IMMIGRATION

REFORM AND CONTROL ACT OF 1986

ILLINOIS
STATE  OF 
Richard P. Kusserow 
INSPECTOR GENERAL 
OAI-07 -88-00446  OCTOBER 1989  EXECUTIVE SUMMARY 
PURPOSE 
The purose of ths inspection was to determe how effectively ilnois implemented the 
State Legalzation Impact Assistace Grants (SLIAG) program, to identi potential problems 
early in the process, and to identiy goo practices which al States could share. 
BACKGROUND 
progr 
The SLIAG  was established under the Imgration Reform and Control Act (IRCA) 
of 1986 to reuce the fmancial burden of providig public assistace, public health assistace, 
and educational servces to eligible legalze alens. In Fiscal Year (F) 1988, $928.  mion 
in progr fuds were alocated to States, and fuds wi contiue to be alocated thugh FY 
1991. These fuds also cover admstrtive costs for implementig SLIAG at the State and 
local levels. Payments ar made for public assistace activities generally avaiable to 
needy individuals and public health assistance servces offered under the States' public health 
progrs. The payments also cover educational servces designed to assist eligible legalze 
alens to attai a satisfactory level of performce in school and to achieve English language 
proficiency and citizenship skis necessar to become permanent residents. The Famy 
Admstrtion  admsterig  progr. 
Support  (FSA) is responsible for  the 
Because stIAG was a new progr, FSA realze that problems would surace early in its 
implementation. In addition to the norm diculties encountered in creatig new processes 
recogn 
and proedures, FSA  that SLIG 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, maintaing confdentialty of informtion, and 
tie fres 
the extremely short  for the  process. 
grt award 
METHODOLOGY 
In response to the anticipated diculties with implementing SLIAG, FSA reuested that the 
Offce of Inspector General (OIG) conduct reviews in 10 States to determe the progress of 
States ' implementing ths progr. The FSA selected nine States and the Distrct of Columbia 
because of the varety of program they offere the number of eligible legalized aliens in the 
population, or the amount of the grant awar. The nie States ar Arzona, California, 
Ilois, 
Colorado, Florida,  Massachusetts, New York, Texas, and Washington. 
strctu 
Intervews 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 information for 
ths report. This report represents the review conducted in the State of llinois and reports on 
progr 
its implementation of the SLIAG  as of August 1988.  commtt 
Both FSA and ilnois were  to identiying problems and developing innovative and 
effective solutions for them. Imedately following our on-site visits, FSA was given an 
outle of the State concerns identied in this report 
FINDING:  FSA ha held national conferences and issued informtion to States 
Since  1987,
on implementing the SUAG program. 
The FSA held several national conferences beging in 1987 to share 
inoration 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 Imgration and Natuzation Servce (IS). 
FINDING: Illnois established a structue to identify organizational and program needs. 
The Deparent of Public Aid has been assigned overal responsibilty for 
SLIG plang. The Deparent held numerous meetigs with State and local 
obta 
agencies to  their input on SLIAG implementation. 
Chicago established an overa planng and coordiation agency to develop. 
SLIAG-related programs and operations and to share inormation with other city 
and State agencies on policy, procedures, and statistical data. 
FINDING: Illnois also took steps to document exenditures and control disbursements. 
fi 
The Deparent of Public Aid has contracted with a consulting  to evaluate 
the State s systems and determe what modcations of present systems or 
expanded systems ar needed to implement SLIAG. 
To faciltate progrm implementation and monitoring, the State Board of 
Education established a policy limitig the amount of educational expenses. At 
the tie of the review, the amount was lited to a maximum of $4 per hour. 
Neverteless, there are some funds contrl vulnerabilties.  FINDING: The Illnois Departent of Public Health was unsure about its responsibilities for 
implementing SUAG and the amount of funding available for SUAG purposes. 
FINDING: The FSA applicatin review process created a numer of signifcant problems for 
Illnois. Also, the FSA's applicatin review process interfered with the State s ability 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 because FSA 
Ilois 
did not provide defmitive wrtten instrctions to assist  in understadig 
SLIAG application requiements. 
The tie fres were too short for submittg the intial SLIAG application 
FSA review and comment, and revisions of the application. 
review. 
progrs 
No formal appeals process exists if  or costs ar denied in the fIrst level
FINDING: The State was unale to access minimal eligible legalized alien informtion in 
INS files. 
In many cases, State records did not provide 
fle information for specifc 
identication of eligible legalze alen status. Although INS fles conta 
identier inormation, procedurs did not exist to permt access to that fIle 
inoration which would alow Ilois to retractively identiy servces to 
eligible legalzed alens. 
FINDING: State systems to identify eligible legalized aliens and associated costs were not 
operational at the time of this review. 
FINDING: The FSA's definition of public assistance includes some public health activities 
which created adinistrative and service delivery problems 
for Chicago. 
As mentioned earlier, FSA and llinois have aleady initiated action on some of the 
recommendations made in this report. Steps have been taen by FSA to provide States with 
more specifc, formal guidelines for identifying and documentig actual program and
adstrative 
costs. However, additional actions ar necessar in other areas on the par of 
FSA and llliois.  . .
RECOMMENDATION: The Illnois Departent of Public Aid should provide fuNher 
guidance to the Illinois Departent of Public Health regarding the functions exected of the 
Illnois Department of Public Health and the funding available under the SUAG program. 
Departent of Public Health needs to understand how to monitor and report 
Also, the Illnois 
program and adinistrative costs  program classifed as public health. 
for health 
RECOMMENDATION: The FSA should make its application and grant process more 
orderly. Specifcally, FSA should 
provide defitive wrtten instrctions on the SLIAG application requirments 
and establish a dialmoguei weit h Ilois on SLIAG policy, compliance, and 
reportg issues to  the confsion that occured in the initial application 
process; 
tie  alott 
ensur that sufficient  is  to the application process includig ilnois 
intial application, FSA' s review and formal comment, llliois' consideration of 
FSA comments and negotiation of disputes, and its .submission of the revised 
application for FSA approval; and 
progr 
develop an appeals process to use if  or costs associated with providing 
servces are denied in the initial application proess. 
RECOMMENDATION: The FSA should coordinate with INS to conduct matches of State 
ma 
and INS records to permt the State to  retroactive determinations of SUAG eligibilty for 
public assistance and education, as well as public health assistance. 
RECOMMENDATION: The Illnois Departent of Public Aid should complete developing 
the automated system to monitor and control SllAG 
exenditures and disbursements. Also, 
the Illnois Departent of Public Aid should adequately instrct local components and 
agencies on the policy and procedures for identifying and keeping track of costs. 
RECOMMENDATION: The FSA should reconsider its position to classif ceNain public 
health services as public assistance and mae apprl(priate adjustments to this position. 
COMMENTS 
drt 
The FSA and the State of Ilois both commented on the  report. Both generaly agreed 
with our fmdings and recommndations. Both reported having taen a number of steps to 
improve implementing SLIAG. We have moded the report based on their comments, which 
are included verbati in appendices B and C.  ..................  .........  .... ....... ......... ... .... ................ .......  ...............  ...... ...
TABLE OF CONTENTS 
EXECUTIVE SUMMARY 
NTRO DU CTIO N .... .... 
..... II ... I8I1
1811..811.. II 11..8. .811 1 
ILLINOIS' ORGANIZATIONAL STRUCTURE .............................................. 3

FINDINGS AND RECOMMENDATIONS 
.............................I1...............8118..811118a1111......... 4

Pu bl ic Assistance ... .... I.I. ..... I.I. .. ... .....11...... ......... II........... II.1. 1...8.8118.8.. ........ II... .
. 6

Pu bl ic Health Assistance. ...... II... ..... ..... ....... ....... II....... II........8118...D IIII   ..11 8

Ed ucati 0 n ... ...... ....... ... 811...... all... .... ... D.Ii..... II... II. ... ...8 .....8.8. ...... IIII .. DD II a. 1111118118I..I .... 1 0

Local Ag  ncies .  .... .... ... ...11...... 
II ...... ...... ...8...... I.I....... .... ..11........ 

Crosscuttin g Issues....................... 
.1111. .11....... ..... ....1111"1"1.1111......1111........ ..11 II.... ... 

OIG RES.PONSE TO COMMENTS ...................11........11...........11....,....11.....1111110....,......... 

APPENDICES 
APPENDIX A: Good Practices..............................,................................. A-1

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

APPENDIX C: Illinois' Comments .......................................................
 INTRODUCTION

PURPOSE 
The Famy Support Admstrtion (FSA) reuested that the Offce of Inspector General 
nie 
(OIG) conduct an inspection in  States and the Distrct of Columbia to determe how 
Grts 
effectively the States implemente the State Legalzation Impact Assistace  (SLIAG) 
progr 
awarded under the Imgration Reform and Control Act (!CA) of 1986. The 
inspection included reviewig mechansms in place to identi these funds and determning 
whether present or projected policies and proedures adere to FSA guidelies. The FSA also 
identig 
was interested in  potential problems early in the process and goo practices which 
pertg 
al States could shar. Ths report presents the results of the inspection  to the State 
Ilois. 
of 
BACKGROUND 
Under IRCA, eligible legalze alens may apply for permanent residency with a I-year 
period afr they ar fIrt eligible (i.e., by the 31st month afer they receive temporar resident 
status). 
wi 
Ths new popultion  incrase the demand for State public 
assistace and public health 
assisumce servces signcantly. It wi also incras the demand for State educational 
servces as these new residents obta Englsh language and civic skis neeed to become 
S. citizens. 
To help States defry many of the costs of providing public 
assistace, public health 
assistace, and educational serces to eligible legalze alens, IRCA authorize $1 bilon 
(F 
each year from Fiscal Year  1988 thugh 1991 for SLIAG grts, less an amount 
identied as the "Federa offset." With few exceptions, eligible legalzed aliens are ineligible 
progrs 
for federaly funded public assistace  such as Aid to Fames with Dependent 
Chdrn (AFC), foo staps, and Medcaid. The "Fedral offset" is the estiated cost 
legald 
the Federal Governent of providig these servces or benefits to those few  alens 
who ar eligible for them. In FY 1988, the law alocated $928.5 millon to States. 
To reeive SLIAG fuds, States must apply to the FSA Division of State Legalation 
Assistace, which is responsible for approving applications and admnistering the program. 
The application must be approved in tota for a State to receive any SLIAG funds. The FSA 
also provides States with tehnical assistace on policy issues and on the methods used to 
determne costs and verify actual costs.  The basic reuirment for States to clai reimburement is that costs must be alowable, 
reasonable, and allocable. State public assistance and public health assistace program must 
be the same ones avaiable to the general public. States cannot create new program in these 
aras speifcaly for eligible legalze alens. However, States may create new or adtional 
education progrs  legalze alen population. States may also clai 
for the eligible 
reimbursement for progr adistrtive and SLIAG adnistrative costs. 
Reimburement for public assistace and public health assistance is limite only to the amount 
maum 
of State and local funds expende for SLIAG-related costs. The  SLIAG 
reimbursement for educational servces is an average of $500 per year per eligible legalzed 
alen. Determg progr adistrtive costs is mad in accordce with the fmal 
reguation at 45 CP 402.22. 
adisterig 
The FSA is responsible for  the program Because SLIAG was a new program, 
real 
FSA  that problems would surace early in its implementation. In addtion to the 
recogn 
norm diculties encountere in creatig new processes and 
predures, FSA 
that SLIG would have unque problems. Some of these issues include the diversity of 
progr 
which SLIAG encompasses, cultu and language barers associated with the 
maitag  tie
. servce population,  confdentialty of information, and the extrmely short 
fres 
for the grant award process. 
METHODOLOGY 
nie 
The FSA selecte  States and the Distrct of Columbia for the inspection because of the

varety of program offere the number of eligible legalize alens in the population, or the

amount of the grt. The nie States are Arona, California, Colorado, Florida, llinois,

Massachusetts, New York, Texas, and Washington. Ths report reviews llinois

progr 
implementation of the SLIAG  as of August 1988.

Pror to conductig the inspetion, the OIG develope strctud discussion guides for each 
progr 
major  activity at the State and local levels. In conductig this review, intervews 
were held with offcials frm the Ilois Deparent of Public Aid, the Ilois Deparent of 
Ilois 
Public Health, the  State Boar of Education, the Chicago Commssion on Human 
Relations, the Chicago Deparent of Public Health, the Chicago Community College, and a 
community-based organtion, the Polish Welfare Association.  ILLINOIS' ORGANIZATIONAL STRUCTURE

Each State designated a single point of contact to admster and coordiate the SLIAG 
progr. The Director of the ilnois Deparent of Public Aid, which is responsible for 
Ilois, 
public assistace in  is the State s single point of contact and the grantee agency. 
Whe the agency dictor is the designate single point of contact, program responsibilties 
Ilois 
have ben delegate to individuals within the  Deparent of Public Aid' s Bureau of
Prgr  progr 
Services. The burau is responsible for SLIAG  planning and operational 
Ilois 
functions. The  Deparent of Public Health is responsible for public health on the 
Ilois 
State level. The  State Board of Education is respnsible for statewide education 
th 
Ilois 
progrs. Admstrtion is a function of all  components. The  Deparent of 
adstrative 
their  expenditus; its fiscal offce handles 
Public Aid compiles and report 
processing SLIAG fuds. 
Ilois 
The  Deparent of Public Aid maages the Genera Assistace program under a State 
adstered  progr 
system in the Chicago/Cook County area. Elsewhere in the State the 
localy adstered Al other assistace progrs ar adistere statewide by the Illinois 
Deparent of Public Aid In Chicago, agencies provide cash, medical, or other public aid 
assistace to supplement that provide by State agencies. Outside Chicago, local 
governnts ar the point of contact for public aid assistace. 
Ilois 
The  Deparent of Public Health interacts with the local health deparents which 
provide servces thughout the State. Ths applies to al local public health deparents, 
includig the Chicago Deparent of Public Health. 
Ilois 
The  State Board of Education oversees local boards of education and has oversight 
responsibilty for al educational facilties in the State. Ths includes State universities, 
colleges, techncal schools, private education companes, and other local education agencies 
or communty-based organzations which provide servces under grants or contrcts. Most 
SLIAG-relate educational servces (English as a Second Laguage, citinship, and literacy) 
wi be provided thugh local education agencies and community-based organtions. The 
local education agencies include local boar of education and colleges. The 
communty-based organizations priary wi be those organzations that function as local 
designated entities previously approved by the Imgration and Natualzation Servce (IS) 
fig 
to assist alens in  for tempora residence under IRCA.   FINDINGS AND RECOMMENDATIONS

commtt 
Both FSA and Ilois were  to identiying problems and developing innovative and 
effective solutions for them. Imedately following our on-site visits, FSA was given an 
outle of the State concerns identied in this report 
FINDING:  FSA ha held national conferences and issued informtion to States 
Since  1987,
on imlementing the SUAG program. 
begig 
The FSA held severa national conferences 
in 1987 to share 
inormation 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 frm the INS. 
FINDING: Illnois established a structure to identif organizational and program needs. 
The State of Dlois has considered resources, organzations, and Federal 
gudelies in preparg its SLIAG program. It held a number of meetings with 
State and local agencies to obtan input on SLIAG implementation. 
Chicago established an overal coordiation component within the Chicago 
Commssion on Huma Relations early in 1987. Ths Commssion s fuction is 
to develop a centr point of expertse on the IRCA legislation and to act as a
coordiatig entity to digest and funnel inormtion to the varous city 
components perting to policy, procedurs, and statistical data The 
centr 
coordiatig agency also acts as the  point of reference for State agencies 
and has sponsor a number of meetings on SLIAG. 
cooatig 
The  agency was found to work quite well in the Chicago ara 
where there ar considerable agencies and grantees both in size and number. 
Also, 90 percent of eligible legalize alens in the State reside in the Chicago 
ara.  FINDING: Illinois also took steps to document exenditures and control disbursements. 
Ilois 
The  Deparent of Public Aid has contracted with a consultig fIrm to 
evaluate the State s systems and determe what modcations of present 
systems or expanded systems ar needed to implement SLIAG. 
Prsent plans cal for crating an identication system which wi be use to fol
low eligible legalze alens for public aid or education and to 
identiy costs for 
public health. The fial specifcations were being developed when we viited 
the State agency. Accordg to the State agency, for ths short-term program a 
contrct would be preferable to developing internal expertse. 
Ilois 
The  State Board of Education established a lit on educational expenses 
and a system for keeping trck of servces and costs. At the tie of the review, 
- reimburement was lited to  maxum of $4 per hour for eligible legalize 
progrs. 
alens attendig educational 
Ths reimburement litation, combined with the statutory limit of $500 for ed
ucational servces per individual, could serve as a control mechansm. Once op
erational, the system wi permt lllinois to reord an eligible alen s attendace 
hour for reimburement 
and prevent duplicate biling. 
Neverteless, there ar some fuds contrl vulnerabilties. Findigs and recommendations 
concerng these vulnerabilties follow under major topic areas.  PUBLIC ASSISTANCE 
Assistanee or Service Activities 
Ilois 
offers a number of public assistace programs and servces to its residents. To be 
eligible for these program, an individual must be an llinois resident and, in most cases, meet 
S. residency reuiments. 
The major program afecte by SLIAG ar Medcaid, Aid to the Medcaly Indigent, General 
Public Assistace, and Emergency Medcal Assistace. In addition, public assistace includes 
the State supplement to the Fedra Supplementa Securty Income progr, Pr-maternal 
Care, and Project Chance. 
llois 
The  Deparent of Public Aid projected low use of public assistance durg FY 
1988-89 and anticipates incrmenta incrases in futue year. The State is evaluatig the cost 
clai 
benefits of imlementig a system to  costs for domestic violence shelters and substace 
abuse tratment servces. If it appear that the system can be used to identi eligible
legal 
alens, costs for these servces wil be included thugh amendig the application. 
Documentaton of Eligible Legalized Alien Stats 
Identiyig individuals as eligible legalze alens wi be made durg the intae process 
where the individual wi be reuested to provide evidence of eligible legalze alen status 
(I-688, Temporar Resident Car or 1-688A, Employment Authorization Card). 
Program Costs 
Ilois 
The  Deparent of Public Aid plans to establish fmancial accountabilty though 
implementig an extensive system which identies costs to eligible legalize alens. While 
the extent of present fue documentation is unkown, begiing in 1988 the illiois 
Deparent of Public Aid me was moded to accept a th-digit numeric code to identify 
the individual as an eligible legalze alen. Use of the assigned alen number would be 
beneficial, but me space presents a problem yet to be solved. Another identication 
methodology considere by the State would be to match llinois Deparent of Public Aid 
files agaist the INS records fie. The match would be by Social Securty number. The State 
has reueste assistace from FSA in working with the INS on such a match. 
The system wi be capable of associating costs to identified eligible legalze 
alens. This 
should help in situations where duplicate costs ar being claied or expenditues are being 
claimed for individuals who ar not eligible legalzed aliens.  Administratve Costs

Ilois 
There wi be SLIAG admstrative costs for activities of approximately five 
Deparent of Public Aid sta. Att hthe.  local level, the Chicago Commssion on Human 
progr 
Relations has a dedicated sta of  Admnistrtive functions or  management 
wi 
operations  include policy development, program implementation and functions, and 
legal 
monitorig the system of associatig costs to identied  alens. In the case of 
wi 
assistace, State offces at the local level  provide intae servces dictly. The State 
wi  adstrtive  progr 
countig system  collect  cost data for identiying SLIAG 
indit 
individuals or offces, and  costs of overhead for sta and other support The State 
wi be contatig FSA to discuss and determe the speifics for allocatig costs to the 
progr. 
SLIAG 
The Ilois Deparnt of Public Aid' wil admnister SLIG funds in cooperation with other 
governnta  wi be thugh 
agencies and applicable contrctors. The adnistrtion  the 
existig State deparenta organtion using support sta and purchased services. 
Drawdown of Funds and Cash Balances 
Pressing SLIAG funds is the responsibilty of the lllinois Deparent of Public Aid's fiscal 
Ilois 
offce. Ths offce calculates expenditus for the varous  Deparent of Public Aid 
progrs, 
fiscal reportg, and fiancial funds control. In Ilois, the legislatue appropriates 
fuds that ar identied to specifc progrs/offces. The SLIAG funds can be drawn to the 
extent that expenditus have not exceeed appropriation. The Comptroller General 
warts 
produce  Mter expenditus 
agaist the appropriations as long as funds are avaiable. 
coriuncate  Ilois 
for alowable SLIAG servces, documentation is prepar and  to the 
progr 
Deparent of Public Aid. In tu, each  has a fiscalfiancial component The 
component is responsible for contrllng and monitorig funds thugh expenditues, grt
reimburement, and fiancial reporng. In Ilois, trsfer of funds frm one agency to 
another is basicaly the same as that of a servce contract 
Ilois Deparnt 
The  of Public Aid is the grantee agency and is responsible for drawdown 
of Federa funds, disbursement of funds to State agencies providig SLIAG-related servces, 
and reportg those expenditus to FSA. Drawdown is made periodcally base on reported 
expenditus and is use to reimbure State and l  al agencies or contrctors providing 
SLIAG-related servces. In public assistace, there are no cash balances since funds must be 
expende before reimbursement is claimed and drwdown is made.  PUBLIC HEALTH ASSISTANCE 
Assistance or Serve Activities 
Ilois 
The  Deparent of Public Health interacts with the local health deparents, which 
provide servces thughout the State. Services include health education and famy planning 
progrs, communcable sexual disease screening and treatment, screenig assessment for 
menta health and substace abuse, and maternal and child health, Hansen s disease, vision 
hearg, and denta car. Genera health oversight services, such as monitorig/testig of the 
envinment, ar also covered 
Ilois 
As noted in more deta in the section on Ilois' Organzational Strctue, the 
Deparent of Public Health uses a network of local governent unts and 
grtes/contrctors to provide servces thughout the State. Public health in Chicago is the 
responsibilty of the Chicago Deparent of Public Health. 
Documentaton of Eligible Legalized Alien Status 
The natu of servces provided does not render the common practice of identiyig costs to a 
parcular eligible legalze alen to be feasible. To protect the enti population" frm 
communcable disease, public health servces are provided to anyone who nees them without 
identig  Ilois 
individuals served The  Deparent of Public Health is relyig upon the 
system being develope by Ilois Deparent of Public Aid thugh contracts to identiy 
eligible legalze alens. The system is to have the capabilty of associatig costs for 
alowable activities. 
Program Costs 
fudig 
Under SLIAG,  for public health assistace is avaiable for services that ar par of the 
State or local public health progr. The Illois Deparnt of Public Health plans to use 
the State SLIG system being develope which wil identify costs to those alowable 
activities and servces. In tu, a population ratio formula will be use to calculate specifc 
State and local SLIAG-related costs. At the tie of the on-site visit, public health sta did not 
know detas of this system nor speifcs related to report processing. 
Public health/costs wil be claied agaist allowable activities/servces. Without going to the 
Ilois 
source for verication, the  Deparent of Public Health is not in a position to ensure 
that duplicate servces have not ben reuested and received by eligible legalzed alens, and 
costs accred for those servces. At the tie of the review, the State was aware that there 
could be a problem with ensurg duplicate services had not been requested and received. 
anticipation of this situation occurng, the State was in the process of developing contrls for 
the intae process to ensur that duplicate costs would not be reimbured by SLIAG funds.  Administrative Costs 
Admstrative costS wi be broken down based on SLIAG and progr adnistrtion 
activities. Admstrtion wi be identied to specifc sta and costs accred in developing 
progr. 
and implementig the SLIAG  Ongoing program costs wil be broken down into 
adisterig 
the SLIG progr in varous State and local agencies. 
costs of 
There wi be SLIAG adstrative costs for activities of approximately two public health 
sta in Ilois. Admstrtive fuctions or progr management wi include policy 
progr 
development,  implementation, ongoing operations, and monitorig the system of 
assoctig costs to identied legalze aliens. Admistrtive progr costs wi be 
indit 
calculate and include the applicable  cost rates established by the cognzant Federa 
agency. Using the State accountig system, adistrative costs will be compiled for 
reportg to FSA. 
Drawdown of Funds and Cash Balances 
Ilois 
The  Deparent of Public Health is responsible for controllg and monitorig funds 
thugh expenditus, grant reimburement, and fiancial reportg. Funds ar obtaed by 
trsfer frm  Deparent of Public Aid to cover expenditus. In most cases, 
the llinois 
payments ar for cost reimbursement. However, because cash flow may be crtical to some 
servce providers, advance paymnts do exist. 
FINDING: The Illinois Departent of Public Health was unsure about its responsibilities for 
implementing SUAG and the amunt of funding available for SUAG purposes. 
Ilois 
The  Deparent of Public Aid staf indicate that fundig and reportng for public 
Ilois 
health activities would be though the State s public health agency. However, the 
Deparent of Public Health indicate uncertty as to the depth of fuctions (Le., 
oversight/monitorig) expete of that offce and the extent of admtrative funding. The
Ilois 
Deparent of Public Health was aware of the system being developed by the Illnois 
Deparent of Public Aid consultat to identi and document program costs, but did not 
know of its proedures. 
RECOMMENDATION: The Illnois Departent of 
Public Aid should provide further 
guidance to the Illnois Departent of Public Health regarding the functions exected of the 
Illnois Department of Public Health and the funding available under the SUAG program. 
Departent of Public Health needs to understand how to monitor and report 
Also, the Illnois 
program and adinistrative costs for health program classifed as public health.  EDUCATION 
Assistance or Service Activities 
Ilois 
The  State Board of Education oversees local boards of education and has oversight 
responsibilty for al educational facilties in the State. Ths includes State universities, 
colleges, techncal schools, private education fmns, and other education organzations 
agencies, as detaed in the setion on Ilnois' Organizational Strctue. The State is claiming 
reimbursement only for adult education servces. The State alady offers a number of 
courses for English, literay, and civic skis. From experience, it is known that a substatial 
propoon of eligible legalze alens ar ilterate, which wi reuir adssing their literacy 
and citizenship skis. 
Documentaton of Eligible Legalized Alien Status 
Ilois  ditly 
The  State Board of Education plans to  access llinois Deparent of Public 
legald 
Aid recipient fies to documnt eligible  alen status and use its identication system. 
At intae, education agencies ar to question individuals regardig residency and citizenship 
status, and, as applicable, to make reference to the INS car (I-688, Tempora Resident Car 
688A, Employment Authorzation Cad). 
or 1-
Program Costs 
Ilois 
The  State Board of Education is awaiting procedurs from the illinois Deparent of 
Public Aid to gude the agency on the system for identiying individual eligible legalized 
reporg 
alens and  servces provided. The intae proess will be moded to ensur 
reordg  legald 
eligible  alens by the registrtion number. Information on prior education 
obtaed 
attendace would be  but offcials do not expect school attendace to be 
an issue 
since most of ths population does not have a 
grat deal of formal education. 
Ilois 
As mentioned before, the  State Board of Education established a reimbursement of $4 
for each hour eligible legalze alens attend educational progrs. Combined with the 
statutory lit of $500 for educational servces per individual, ths hourly reimburement 
litation could serve as a control mechanism. More importtly, the hourly reimbursement
litation wi 
be par of a system which will permt Illnois to monitor attndace to prevent 
bilg. 
duplicate 
Discussions were held with offcials of the city colleges and a community-based organization 
the Polish Welfar Association. The Association plans to fie as a contractor to provide 
educational services. Both offcials indicated that the $500 limitation for eligible legalized 
alien education assistace was more than adequate considering costs and related funding 
sources.  Administratve Costs

There wi be SLIAG adstrative costs for activities of approximately two education staf. 
progr 
The ilinois State Board of Education s admistrative functions will include 
management, policy development, program implementation and monitorig, and reportg. 
At the local level, admstrtive expenses ar to be covere thodugiht t he payment rate for 
educational servces. The State accountig system will captu  and indict costs for 
Ilois 
reportg by the  Deparent of Public Aid. 
Drawdown of Funds and Cash Balances 
The procedur for interagency trsfer of funds is a servce contrct tye of aIangement
sim to that for other Federa progrs. Trasfer of fuds wi be backed up by an agency 
agrment on fuctions or activities to be conducted, and the presentation of a report which 
identies servces perfored and expenditus. Reports received from local unts wil be 
Ilois 
compiled into  State Board of Education report that ar submitt in 
lie with the 
Ilois Deparnt 
of Public Aid' s interagency agrments. Based on these report, vouchers 
wi be drwn to trsfer fuds from the Ilois Deparent of Public Aid to the ilnois State 
Board of Education. 
Ilois 
The  State Board of Education is aware of the relationship of State matching funds 
ing claied for SLIAG reimburement that relate to matching for other Federal programs. 
In most cases, the llliois Deparent of Public Aid reimburses other State or local agen ies 
only for expenditues afer they have been made. In situations where an education grtee 
requis an advance of funds to meet cash flow nees, provisions ar built into the system to 
Ilois 
identiy such receivables for adjustment at a later time. The  State Board of Education 
crt 
indicate that such  balance adjustment is made with 3 months on a flow basis. 
LOCAL AGENCIES 
Assistance or Serve Activities 
The State application include a separate sec on on projected costs for servces provided by 
the city of Chicago. These ar detaed in the sections on ilinois' Organizational Strctu, 
Public Assistace, Public Health Assistace, and Education, and Goo Prctices in the 
appendi. Since more than 90 percent of eligible legaliz alens in Illnois ar located in the 
Chicago/Cook County area, aduate contrl at ths level is important if State agencies and the
Ilois 
Deparent of Public Aid ar to receive accurate expenditue and servce data. To 
prepar for SLIAG, in 1987 Chicago established an offce within the Chicago Commssion on 
Human Relations to conduct planning activities and coordiate SLIAG activities for all city 
agencies.  Stats 
Documentaton of Eligible Legalized Alien 
Loal  ' proedures. See program costs for the 
agencies in llinois follow the State agencies
progr,  progr 
city of Chicago. If eligible for a Federal  the requirements of that  are 
followed 
Program Costs 
orr 
In Chicago, an executive  does not pennt requestig information relate to imgration 
status. Therefore, city servces allowable as public assistace, public health assistace, and 
education wi not be claied if they must be lined to individual eligible legalzed alens. 
However, costs for educational servces provided though the system of colleges can be 
identied to. individual eligible legalze aliens and claied for SLIAG reimbursement. 
Administratve Costs

Admstrative costs for sta of the Chcago Commssion on Human Relations have been 
appropriated and expended thugh the city of Chicago. The Commssion was to address the 
city s response to the impact of eligible legalize alens on city deparents and serve as a 
basic tehncal assistace resoune. The Commssion also developed a needs assessment to 
work with the varous deparents to determe costs of services and the payment source for 
those servces (locaVStatelFederalrivate). Each agency will report to the Commssion with a 
combined city report for SLIAG expenditus to be made to applicable State deparents. 
An importt concern of the Commssion regared the eligible legalze alens' abilty to cope 
and be effectively and effciently assimated. Parcular efforts were made to involve the 
maum 
community and employ local resoures to the  to reach out to al individuals who 
qual 
could  for public assistace and public health assistace servces generay available in 
the communty. 
Drawdown of Funds and Cash Balances 
The State s system provides for proessing a wmat to reimburse services only where 
adequate funds have been approprated to the activity by the State legislatu, and the 
expenditus have not exceeed the appropriated amounts. Drwdown of Federa funds 
mae agaist expended State and local funds. In most cases, the State reimburses other State 
or local agencies, or contrctors/grtees only for expended funds. Where a contrctor or 
grte  ar 
advance of funds to meet cash flow reuirments, revisions  built into 
reuies an 
the system to identiy such receivables for adjustment at a later time. These proesses have 
been covere in the Public Health Assistace and Education sections of this report  CROSSCUTTING ISSUES 
FINDING: The FSA application review process created a numer of signifcant problems for 
Illnois. Also, the FSA's application review process interfered with the State s ability to plan 
for services.

Delay in FSA issuing the implementig regulation resulted in the State 
inabilty to properly plan for SLIAG. 
Numerous policy misinterpretations and disagrments resulted because FSA 
did not provide defitive wrtten instrctions to assist ilnois in understadig 
SLIG application reuirments. 
The tie fres were too short for submittng the initial SLIAG application 
FSA review and comment, and revisions of the application. 
progrs 
No formal appeals process exists if  or costs ar denied in the fIrst level 
review. 
Final reguations, published March 10, 1988, cal for the States to submit the FY 1988 
application no later than May 16, 1988, with revisions submitted by July 1 , 1988. As such 
deisions coverig the State  progrs, servces, and SLIAG-related cost estimates had to be 
made under shor tie fres and without a form process of grt appeals. The 
grt-makg proess followed durg ths tie mae it dicult for Ilois to effectively and 
effciently implement the SLIAG program Likewise, State planing was negatively impacted 
by delays of FSA and the INS in promulgatig regulations, and changig policies that were 
drt 
specifed in more than one  regulation released at varous times by the INS. 
RECOMMENDATION: The FSA should mae its application and grant process more 
orderly. Specifcally, FSA should 
provide defitive wrtten instrctions on the SLIAG application reuirments 
and establish a dialogue with lllinois on SLIAG policy, compliance, and 
reportg issues to mimie the confsion that occured in the initial application 
process; 
ensur that sufficient time is allotted to the application process including llinois 
initial application, FSA' s review and formal comment, llinois ' consideration of 
FSA comments and negotiation of disputes, and its submission of the revised 
application for FSA approval; and  develop an appeals process to use if program or costs associated with providig 
servces are denied in the initial application proess. 
FINDING: The State was unale to access minimal eligible legalized alien informtion in 
INS files. 
Unti the maagement system is established the State generay wil not be able to identiy 
eligible legalze alen status. Though INS data fies conta this inormtion, it is unavaiable 
to other agencies due to unsolved confdentiality and transfer provision issues. Accordig to 
ilois 
the  Deparent of Public Aid, the State is thus unable to retractively identiy services 
provide to reipients who may or may not be legalze alens. From recent inormation 
obtaed thugh contacts with FSA, FSA is workig with INS to establish a way to match 
flies so statistical data can be obtaned but not specifc eligible legalze alen data. 
RECOMMENDATION: The FSA should coordinate with INS to conduct matches of State 
and INS records to permit the State to make retroactive determinations of SUAG eligibilty for 
public assistance and education, as well as public health assistance. 
FINDING: State systems to identify eligible legalized aliens and associated costs were not 
operational at the time of this review. 
sta  Ilois 
Discussion with  indicated that the  Deparent of Public Aid had not yet 
implemented mechansms to permt identiying servces and costs to individual eligible
legal 
alens. The State is using a general contrctor to develop and implement a major 
wi 
system that  follow al recipients of public assistace and education servces. Also, a 
contrctor wi be selected for aggrgate data collection and management of the client 
identication and Prject Chance (assistance-relate employment) servces for eligible
legal 
alens receivig public assistace. The system will be tied to an eligible legalzed 
clai 
alen identier for public aid and education assistace to  costs associate with 
legal 
individual eligible  aliens. 
A th-digit identier has ben used by the nlinois Deparent of Public Aid since March 
1988. The number of the Ilnois Deparent of Public Aid reipients entere onto the rolls 
unown. 
since then is  The contrctor was conducting a special fie review to determne the 
number of reords reflectig such an identier. 
ditly 
The system is planned to  access llinois Deparent of Public Aid recipient fies. In 
the case of public health and education, local agencies or grtees wil report to the ilinois 
State Board of Education, ilinois Deparent of Public Health, or dictly to the contractor 
operating the identication system. At the time of the on-site visit, complete detais of this 
system and specifc detais on the maner of report processing had not been finalized. The  llois 
State Board of Education will be releasing a Request for Proposal for local agencies to 
legal 
submit proposals to provide language and civics education to eligible  aliens. 
wi 
However, they  not have a means to trace services to eligible legalzed alens and check for 
Ilois 
duplication of services unti the  Deparent of Public Aid' s system is implemented. 
In the case of public health, costs wi be identified by activities and a ratio-to-population 
formula wi be used to calculate thc? SLIAG porton of State and local expenditus. The
Ilois 
Deparent of Public Health indicated dependency on the identication system being 
wi 
developed by the contrtor. Without the benefit of the system, components  not be able 
to monitor fuds to the component or grte contrtors. 
RECOMMENDATION: The Illnois Departnt of Public Aid should complete developing 
the automated system to monitor and control SUAG  disbursements. Also, 
exenditues and 
Departent of Public Aid should adequately instrt local components and 
the Illnois 
agencies on the policy and procedures for identifying and keeping track of costs. 
FINDING: The FSA's definition of public assistance includes some public health activities 
which created adinistrative and service delivery problems for Chicago. 
Chcago has a unque situation afecting the identication proess. Thugh an executive 
order, the city does not permt its agencies to inquie about the legalization status of 
individuals seekig varous fors of assistace. 
Loal public health components noted that present plans called only for monitorig 
expenditus thugh applyig a ratio-to-population method. Public health cliics in Chicago 
also provide a fu range of tratment for tertar level of car. Under curent FSNSLIAG 
policy, such care would fal under the public assistace category. The distiction is importt 
because identiyig a servce such as public assistance reuirs monitoring costs by 
identiyig individual eligible legalze aliens served. As such, the intae identiyig, 
monitorig, and reportg system at the public health servce clinics must be equipped to 
progr 
distiguish public assistace from public health and to correctly report  or service 
costs. 
admstrtive 
The distiction between public assistace versus public health creates serious 
and programatic diculties for the city of Chicago s public health agency. Public health 
offcials ar concerned that any effort to document clinic health car servces will afect the 
wigness of sick patients who ar ilegal alens to access public health servces. 
RECOMMENDATION: The FSA should reconsider its position to classif" certain public 
health services as public assistance and make appropriate adjustments to this position.  OIG RESPONSE TO COMMENTS 
drt 
The FSA and the State of llinois both commented on the  report. 
THE FSA 
agr 
The FSA has generaly  with the OIG report findings and reommendations. The FSA 
progr 
has taen a number of steps to improve implementig the SLIAG  including 
claryig program policies and proedurs. 
The FSA questioned the statement that the new population would signcantly increase public 
assistace and public health assistace servces. Early estimates indicate that lare numbers 
recogn 
of alens would qualy to access the SLIAG program. The report  that inormation 
pobtaedr duorg thej reveiew aecteretd tihat osubstantial incrsases .in w orkloads and 
expenditus could occur in these aras as well as in education. However, we understad from 
recent discussions with State offcials that demand for servces is falng behid earlier
progr 
We report that no formal appeals proess exists if  costs ar denied in the first level 
Grt 
review. We agree with FSA' s statement that the  Appeals Board does have jursidiction 
over matters for witholdig and repayment of SLIAG funds. However, it was the States 
concern that an effective appeals mechanism be in place for issues involvig program or 
costs at the fIrt level of FSA' s review in the application proess. 
The FSA defmed public assistace to include some public health activities, which crated 
admstrtive and servce delivery problems for Chicago. The OIG recommended that FSA 
reconsider ths position. 
priary 
The FSA replied that they se th position  as an issue of cost identication and that 
they wi work with the States to develop method of documentig costs which ar consistent 
with FSA's responsibilties as stewar of public fuds. We believe that FSA's actions to 
identiy alternative method is respnsive to our concerns. 
We contiue to believe that a strct interpretation which permts public health costs to be
clai 
only for specifc eligible legalze alens is burdensome to the States and, in many 
cases, would reuie considerable revisions to the State s system or statutory requirements. 
agr 
However, we do  with FSA's proposed use of alternative systems, such as the Cost 
Documentation System and a revised population ratio method system which reflects usage. 
These would alow for accurate cost accounting without requirng States to develop new 
systems or make considerable revisions to present systems. Where appropriate, other 
alternatives might be used which would prouce a more effcient system for the States and  addss congrssional intent that the States would not be reuir to establish new or elaborate 
systems. 
clar cert 
The FSA made numerous comments to  matters of fact, policy, or procedur. 
We have include these comments verbati in Appendix B. 
The Stae of Illinois 
agr 
The State has generay  with the OIG report findigs and recommendations. Their 
comments ar include verbati in Appendix C. Since the time of the on-site review, the 
thugh 
State has taen signcant steps to effectively implement the SLIAG program 
procedur and system changes.  APPENDIX A

GOOD PRACTICES
 A number of practices have been identied that other States could shar. 
Chicago established an overal coordnation component within the Chicago Commssion 
on Hum Relations early in 1987. This Commssion s function is to develop a centr 
Imgrtion 
point of expertse on the  Reform and Control Act legislation and to coordi
perting 
nate inormation sent to the varous city components  to policy, proedures, and 
coordatig 
statistical data. The  agency also acts as the central point of reference for 
State agencies and has sponsore a number of meetigs on SLIAG. 
The coodiatig agency was found to work quite well in the Chicago ara where there 
grtes 
ar considerable agencies and  both in size and number. Also, 90 percent of eligi
ble legalze alens in the State reside in the Chicago ara. 
Considered a goo practice, other States or local communities may wish to consider this 
centrze 
concept where a  coordiation component might be beneficial. 
Ilois Deparnt 
The  of Public Aid has contrcted with a consult:ng firm to evaluate 
implement SLIAG. 
the State s systems and determne what modcations of present systems or expanded sys
tems ar neeed to 
Prsent plans cal for crating an identification system which wil be used to follow eligi
ble legalze alens for public aid or education and to identify costs for public health. 
The system is to be use for input frm State agencies and for output data for drawig 
funds and reportg. The fial specifcations were being developed when we visite the 
State agency. Accordng to the State agency, for this short-term program, a contract 
would be preferable to developing internal expertse. 
Dependig upon the sophistication of a State s systems and resources, the extent of eligi
ble legalze alens and servces, and the cost for a contrct, a State may want to explore 
such an alternative. 
Ilois 
The  State Board of Education established a limit on educational expenses and a 
system for keeping trck of servces and costs. At the time of the review, reimbursement 
was lited to  maxum of $4 per hour for eligible legalzed alens attndig educa
tional programs. This reimbursement limitation, combined with the statutory limit of 
$500 for educational servces per individual, could serve as a contrl mechanism. Once 
operational, the system wi permt llinois to record an eligible legalize alen s atten
dace hour for reimbursement and prevent duplicate billing.  APPENDIX B

FSA' S COMMENTS
 .. 
APPENDIX B

"""'1(1, 
DEPARTMENTOF HEALTH &. HUMAN SERVICES	 Family Support Admlnlstratioo 
Memorandum 
Date:	 June 27, 1989 
Secretary 
stan t 
From:  Acting  Assi 
for Family Support 
OIG Draft Report: Implementation of the State Legalization 
Subject:	
Impact Assistance Grants Under the Immigration Reform and 
Control Act of 1986 - Illinois (OAI-07-88-00446) 
To: 
Richard P. Kusserow

Inspector General

At tached are the Family Support Administration comments on 
the above draft report. Many of our c  roents are technical 
of the legi 
in nature due to the compl exi ty  slation and the 
fact that the SLIAG program was very new at the time of the
review. 
We appreciate the assistance and cooperation we have

received from you in response to our request to conduct this

program. 
round of reviews of the SLIAG  The reports we
received are. very useful to 
us in understanding how States 
are implementing the program. 
'I 
Attachment 
B-1
 OIG DRA REPORT: 
Implementation of the State Legalization Impact Assistance 
Grants Under the Immigration Reform and Control 
Act of 1986:

ILLINOIS 
The Family Support Administration' 
s comments are divided into
three sections: 
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. 
Narra ti ve : 
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 =ew

exceptions, public assistance programs, inquire about legal
status. 
This suggests that at least some aliens were using 
these services before legalization and that newly legalized 
aliens do not represent a "new population" for public assistance

and public health 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 
health needs existed and was identified duri 
g the medical
examinations required of all applicants for legalization.
However, there is no data to suggest that, other than this
temporary bulge in demand for public health 
services, newly
legalized aliens will generate a significant increase in demand

for public health assistance or public assistance services. 
Page 4 (Findings and Recommendations) -- The draft report says,
"Since 1987 , FSA has held national conferences and issued 
information to States on implementing the SLIAG program.  Since 
the OIG' s onsi te 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 
technical 
onsi te  assistance. We. are in the process of conducting
initial program reviews of the major States, and intend to visit

selected other States as well. We request that the final report

reflect this continuing dialog e with States.  .. .
--  -- 
Page 8 (Program Costs) -- The draft report says, "  the 
Illinois Department of Public Health is not in a position to

ensure that duplicate services have not been requested and

received by eligible legalized aliens, and costs accrued for

those services. II We request that the final report clarify the 
point. 
meaning of this  For public assistance and public health 
assistance, the need for and provision of assistance or service 
to eligible legalized alien clients must be determined on the 
same basis as that for all other eligible clients residing in the
State or county. 
These are program policy issues for which the 
state or local administering agency has responsibility, not HHS. 
Page 12  The draft report says, "In Chicago, an

(Program Costs) 
executive order does not permit requesting information related to 
immigration status. Therefore, city services allowable as public
assistance, 
public health assistance, and education will not be 
claimed if they must be linked to individual eligible legalized
aliens. 
The FSA has provided states guidance on alternate 
methods for establishing costs without checking ELA status of
individuals. 
Guidance has been issued to states on how they can 
use the population ratio method for establishing costs related to 
assistance. 
public health  Guidance has also been issued on how 
the Cost Documentation System can be used to track costs for any

program category. Our policy is to assist states in developing

methods for establishing costs for all allowable programs in

their applications. We have been extremely flexible on this

issue, recognizing that in some cases it may not be possible or 
practical to identify ELA program participants in some programs.
A state that is having difficulty establishing costs in a program 
in its approved application' should get in touch with FSA. 
Page 12  The draft report says, "An
(Administrative Costs) 
important concern of the Commission regarded the eligible
legalized aliens I ability to cope and be 
effectively and 
efficiently assimilated. . Particular efforts were made to

involve the community and employ local resources to the maximum

to reach out to eligible legalized aliens.  The above 
description implies that outreach activities have been carried 
agencies. 
out by city  Outreach costs relating to legalization
requirements are . not allowable under current law. Outreach 
activities relating to the availability of public assistance and 
public health services are allowable to the extent that they are 
generally available and not provided only to ELAs. The final 
report should clarify the nature of the activities identified in 
the draft report. 
Findinas: 
Finding:  I s 
The FSA  definition of public assistance includes 
some public health activities which creates ad

ministrative and service delivery problems for

Chicago. 
B-3  Comments:	 We question how the definitions of public beal th and 
public assistance create service delivery problems for
Illinois 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 ongoing, 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 they we e reimbursed under
SLIAG. 
The final report should clarify this point. 
he draft report notes that "there is no quarrel with 
I s 
the logic of FSA  definition of public assistance
versus public health, 
" but does not explain why the OIG 
logic. 
recommends that FSA reverse its  The final 
report should explain that the regulatory definitions

of public assistance and public health assistance are

based directly on the Immigration Reform and Control

Act of 1986 (IRCA) which created SLIAG.

Programs of public assistance are defined as programs

that "
provide for cash, medical or other
assistance. .. desiqned to' meet the basic subsistence or 
health needs of individuals" (section 204(j) (2) (A)

emphasis added). Consistent with IRCA I S explicit
inclusion of medical assistance under the public 
assistance category, FSA considers state or locally 
funded programs that provide medical treatment to needy 
individuals to be public assistance programs. 
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" 
(j) (3) (A)). 
(section 204  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 pr2o)te.c ting the health of the general

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 	
IRCA.  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. 
Under our regulation, states are allowed to use a 
single ratio of the number of ELAs in the service 
population to the total service population to establish 
actual costs for public health assistance programs, as 
defined for SLIAG. 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 
individuals. 
programs that provide treatment to needy 
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 
cases. 
costs, dramatically in some  However, we would 
be willing to allow use of the population ratio method
empirical basis
for any program for which there is an 

to indicate that doing so would not overstate costs.

FSA realizes that many public assistance and public 
heal th programs do not routinely collect information on 
immigration status but has found that many do collect
social security numbers. 
That is why we funded and 
devoted substantial staff resources to developing a 
system that will match the social security numbers of 
program participants with those of newly legalized
aliens. 
This system gives states information on the 
number of newly legalized aliens participating in a 
program and the cost of services to them. It is now 
available and allows states to establish costs for FY 
1988 as well as current and future years. Recently, we 
sent state SLIAG Single Points of Contact suggestions 
for other possible methods for establishing costs. 
None of these alternative methods requires setting up 
new administrative mechanisms or checking status of 
all program participants. 
We will continue to work closely with Illinois to

develop methodologies to document costs for all

ications.

programs in its approved appl 
Finding:
 The FSA application procesIsl lcinreoatiesd.  a number of

significant problems for  Also, the FSA' 

application review process interfered with the State

services.

ability to plan for 
Comments: The draft report says that the time period for

submission, review, revision and approval of the

B-5  initial application was too short. We agree that it 
would have been preferable to have had a longer period 
of time between the publication of the final regulation 
and the deadline for submission and approval of FY 1988 
and FY 1989 applications. However, the final report 
should note that, because of the way IRCA set up the 
allocation formula, one maj or reason for the compressed 
timeframe was that we could not award funds to any 
state until all states' applications had been
approved. In 
order for us to run the allocation 
formula, which IRCA requires to include estimates of 
costs, we must have approved estimates for all states 
States' allocations. 
before we can calculate 
The draft report says that "numerous policy

misinterpretations and disagreements resulted because

FSA did not provide definitive written instructions to

assist Illinois in understanding SLIAG application

requirements. 
Had there been more time, we would have 
communicated more extensively in writing. Our current

practice is to communicate in writing on all

substantive issues regarding state applications,

amendments, and end-of-year reports. 
The report says that no formal appeals process exists 
if programs or costs are denied. The Grant Appeals 
Board has jurisdiction over issues related to the 
wi thholding and repayment of funds. For other matters, 
the State may follow normal procedures for disagreeing 
finding. 
with an agency 
Recommendations 
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. 
states would 
like to use the population ratio method for all 
programs run by their health departments. 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 bel ieve that to use the population ratio method for 
all programs run by State health departments would be  inconsistent with our responsibility to exercise fiscal

funds. 
responsibili ty in administering SLIAG  However,
we recognize that some States may encounter 
difficulties in establishing actual costs, especially 
where ELAs are a small percentage of a state I 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 I 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 timeframes for the FY 1988 and FY 1989 
application processes were necessarily short. 

effect, the States and we had to complete two

application processes in less than a year. 
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 from July 15 to October 

Addi tionally, 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

isunderstanding, we have advised States that we will

communicate all substantive questions and concerns on

their FY 1990 applications in writing, as was done for

States I 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 denied in 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

funds. 
wi thholding of  Normal channels wi thin the 
Department are open to states that disagree with

decisions made during the course of application review. 
Recommendation: The 
FSA should coordinate with INS to conduct 
matches of state and INS records to permit the State t.o 
make retroactive determinations of SLIAG eligibility 
for public assistance and education, as well as public 
assistance. 
heal th 
Response:	 The FSA has recently established the Cost
Documentation System (CDS). This system matches 
social security numbers of State/local program 
participants with social security numbers of eligible
legalized aliens in the ASVI data base. 
states are 
provided aggregate numbers of ELA program participants 
and costs associated with providing services to them. 
The system will enable States to document costs 
associated with ELAs participating in State and local 
programs without asking program participants for their 
immigration status or setting up new administrative
mechanisms. The system also will match program 
participants with alien numbers of ELAs in the ASVI 
data base.  APPENDIX C

ILLINOIS COMMENTS
 -- 
.. ....  !!!!_	 . . . ,.  '" ' ;.... ,.  -.-. , '". .:-" . .......-..
APPENDIX C,

Illinois Department of
'V 
oj .	
Public Aid 
Susan S. Suter  Jesse B. Harris Building 
Director	 100 S. Grand Avenue East 
Springfield. Illinois 62762-0001 
July 19. 1989

Hr. Rich rd P. KusseroM

Inspector GenerAl

Departaent 01 Health And HUlan Services

ic. or th. Inspector General

011 
W,shington . D. C. 20201 
Dear Hr. Kusserow:

Your letter of "ay 30. 1989 translitted th  draft inspection report.

ent it led  1!Rl!!!D!!!j9D_ 91_  b!g!lj!!!i9D_  e!!j!!!D
!!D!!_YDg!!_!b!_1!!jg!!!j9D_B!29!!_!Dg_'9D!!91_  91.  . and 
requested our co..ents. ThAnk you for gr,nting the extlnsion to 
our couents. 
, July 19, 1989 for  Ne hAVI rnh..ed the draft report
and hAve the lollowing com.ents to the text: 
In the Executive SUllAry section on page 
ii. the eleventh parAgraph
we hAV' the (allowing commenl. 
The $4. 00 p.r hour instructional 
rAte IAXi8U. for SLIAS rei.bursement hAS been revised to $5. 
00 per
hour (unless prior 
approvAl (or a higher rate is grAnted based on 
justifiAble circulstAnc.s). 
In the section reg  ding Illinois' orgAnizationAl structur. on pAge

3 01 the report. the second parAgrAph statel that the Illinois

DepArtment of Public Aid (IDPA) is State-Ad.inistered in the

Chicago/Cook County Area And is ad.inistered by 
local governments

elsewhere in the State. This state.ent is true only for the 6enerAl

Alliltance ProgrAm. 
It does not Accuralely describe the Statewide 
operation or IDPA in the administration of All other assistance
progra.s (i. 
l. AFDC. AABD. Food St.mps. Hedicaid And AHI). This 
paragraph should be clarified to establish greater credibility for 
IDPA. 
Ne realize that this report is baled on An August 1988 review.
However . it lay be helpFul to note that. 
for new applicants. the
individuals 
' Alien rlgiltration numbers Are nON being entered And 
rlt.ined in the client dAta bAse .nd. beginning July 3. 1989. all 
individuals who claim to be legalized aliens 
will have their statuI 
verified through the INS Systematic Alien VerifiCAtion for
Ent i tl ement (SAVE) Program. 
C-l	 I .  : .
r-.. 
Page 2

In the third paragraph same section, reference is made to the

State. 
network of local health departments throughout the  There

appears to be some confusion regarding the Chicago Department of

He a It h , and' pro v ide r s a f pub 1 i c h e a It h s e r v ice s . 
Local health departments in Illinois are all local 
government units, including the ChiCigo Deparhent of
Health. A 
local health depart.ent lay be composed of an 
municipality, or several municipalities to 
entire county, a 
comprise a district. The Illinois Department of Public
Health 
(IDPH) interacts Nith all local health departaents 
in the saae manner. 
The local health departments Ni 11 be the providers of 
the local areas. 
public health services in  The draft 
report is incorrect in stating that for-prof it businesses 
and other non-prof it agencies are used. 
It should be noted that I aore accurate reference to locally

provided services is made on page lev en of the draft report.

In the fourth paragraph lame section, the description of the 
Illinois Slate Board of Education (ISSEI organizational function is
not accurate. 
ISBE oversees local boards or Iducation, not 
educational facilities in Illinois. ISBE is, hONever , responsible 
oVlrsight or all SLIAG-runded educational services regardless of 
the type of facility providing the services. 
In the third paragraph section o  Education, page lOt Ne have the 
following comment. 
ISBE never planned or Istablished a maximum of 
125 instructional hours per Eligible Legalized Alien (ELA). There
is no ii 
it on the number of hours an ELA aay attend SLIAG-runded 
instructional services. 
nur responses to the two rec08mendations relevant to Illinois are

allached. 
If you have any questions relative to our co.ments, please contacl 
Mr. Robert J. Schwarz, Chief Auditor at (217)7B2-11 
Sincerely, 
4. 
Susan s. Suter

SSS: j 1m

Atllchunl 
Ct: Breg O' Connor 
Gail Huecker 
Mary Ring - Illinois Departmenl Public Hu lth 
Noreen Lope: - Illinois Slate Board of  Education  -. '--
-07-88-00446 
OA I 
IMPLEMENTATION OF THE

STATE LEGALIZATION IMPACT ASSISTANCE

GRANTS UNDER THE IMMIGRATION REFORM

AND CONTROL ACT OF 1986

RECOH  ENDAT IONS  RESPONSES

STATE DF ILLINOIS

2!m!D  12n_ !1 : 
The Illinois Department of Public Aid should provide further guidance to the

Illinois Department of Public Health regarding the functions expected of the

Illinois Departlent of Public Health and the funding available under the SLIAG

progra  Also, the Illinois Departaent of Public Health needs to understand 
how to monitor and report progral and administrative costs for health programs 
classified as public health. 
i!: 
ag!a  B!!22 
In the di  cus5ion of this finding it was stated that soae confusion existed 
for 
between IDPH and IDPA regarding which agency would be responsible 
expenditures. Because 
oversight, monitoring and reporting of public health 
final definitions of public health services had not bIen received frol FSA, no 
decision could be reached an allowable activiItrieeas .a t other state Igencies 
which provide services in the public heallh  EXlaples of such Igencies 
include the Deparlment of Alcohol and Substance Abuse, Illinois Environlental 
Sarety. 
Protection Agency, and Department of Nuclear  At the tiae of the 
program review, there was insufficient information Ivailable to lake a 
decision IS lo which agency (IDPH Ind IcDPlAaIi l.sou.l d .ork .ith these olher Slill

agencies to id  Since lhe review, Ind receipt 
ntify appropriate SLIAS 
of necessary aaterials frol FSA and INS, IDPA as the Stlte s lead SLIAG 
agency, has assuaed responsibility for developing the clai.ing process for 
olher state agencies.

Slaff from IDPA have been eltreaely helpful through the enlire life of SLIAG
inslructive. 
and have al  all tiae been cooperative and  Slarf of IDPH are 
knowledgeable about monitoring and reporting program and administrative
costs.  of eligible legali 
Since receipt of program definitions and counls 
aliens from which populalioh ralios have been developed, IDPH has begun the 
claiming process at both the slale and local levels. 
Final ELA numbers necessary to establish actual FFY' B7-BB costs under the 
populalion ratio method Nere nol provided to the state until Harch 24, . 1989. 
The deter_inalion of actual SRF and local fund reimbursement for public health
livilies 
was not possible until receipl of final ELA nuabers froa HHS.  !!: 
.."f 
Public Health activities alloNable under SLIAS are restricted to those 
This prohibition limits
generally available to lhe residenls of the slale 
for
IDPH functions to the administrative activity of claiaing reimburseaent 
existing state and local programs through application of the population
ratio. .
Fundin  . as iaplied in the DIG report Mas never a possibility; only 
reimbursement for a pro-rata share of existing operations 15 alloNable under 
SLIAG Regulations.

IDPA and IDPH continue to Mork Milh HHS in the operation of SLIAG. HHS/ORR 
staff recently conducted a SLIAG program orientation visit in Illinois and aet 
ISBE. 
Mith staff frol IDPH, IDPA and  Contacts such as these assist in 
addressing concerns and clar ifying issues in the iapleaentation and operation 
of SLIAS. Also David K. 6riffith, LTD., a private consulting fir. was hired 
to assist IDPH in identifying and reporting state public health costs. 
e!!!  !tie 
The Illinois Departaent of Public Aid should coaplet. developing lh. autoaated 
AIIO, lhe 
system to aonitor and control SLIAG expenditures and disburseaents. 
Illinois Depart.ent of Public Aid should adequal.ly instruct local coaponents 
and agencies on lhe policy and procedures for identifying and keeping track of 
costs. 
t!t!_6g!  R!i2en!!: 
IDPA has continued to Mork with HHS and "artin "ari.tLa Data Systeas in lhe 
(CDS). HHS and 
development and operation of lhe Cost Docuaentation System 
IDPA believe that CDS  ystea) is an imporlant aethod 
(social security .atching 
01 eslablishing costs for public assistance and health costs. Further, IDPA

has continued to work with local agencies concerning the iaplementation and

. operation of SLUG.

IDPA' s Bureau of Fiscal Operations (BFO) has developed a .onthly activity 
report oJ Fund 236. Such: report. delinules t.he draNdoNn, the expenditures and 
cash balance. This report speci f ies these three accounting coaponents by t.he 
respective agency, i. I., IDPA, IDPH and ISBE. Such rlport is reconcil.d each 
s records. 
aonth Mith lh. St.ate Comptroller  Additionally, BFO is aaintaining 
costs. 
a ledger of the SLIAG Administrative  Such costs are posLld on a 
quarterly basis as a result of the Cost Allocation Plan aethodology.