IMP LEMENTATION OF THE STATE

LEGALIZATION IMPACT ASSISTANCE

GRANTS UNDER 
THE IMMIGRATION

REFORM AND CONTROL ACT OF 1986

DISTRICT OF COLUMBIA 
Richard P. Kusrow 
INSPECTOR GENERAL 
07-800 
OAI. OCTOBER 1989  EXECUTIVE SUMMARY 
PURPOSE 
The purse of ths inspetion was to determe how effectively the Distrct of Columbia 
Grts  prgr, 
implemented the State Legalzation Impact Assistace  (SLIAG)  to identiy 
early in the proess, and to identi goo practices which  could 
potenti problems  al States 
shar. 
BACKGROUND 
The SUAG progr was established under the Imgrtion Reform and Contrl Act (!CA) 
of 1986 to reuce the fiancial burn of providig public assistace, public health assistace, 
legal  (F 
and educational servces to eligible  alens. In Fiscal Year  1988, $928.  mion 
in progr fuds wer alocated to States, and fuds wi contiue to be alocate thugh FY 
adstrtive 
1991. These fuds also cover  costs for implementig SLIAG at the State and 
local levels. Payments ar ma for public assistace activities generay avaible to al 
neey individuals and public health assistace servces offer under the States' public health 
prgrs. The paymnts also cover educational servces designed to assist eligible legalze 
alens to att a satisfactory level of performce in school and to achieve English language 
proficiency and citizenship skis necssar to beome perment residents. The Famy 
Admstrtion  adsterig  progr. 
Support  (FSA) is responsible for  the 
real 
Because SUAG establishes a new prgr, FSA  that problems would surace early 
in its implementation. In adtion to the normal diculties encountere in cratig new 
reognze 
proesses and predurs, FSA  that SLIAG would have unque problems. Some 
progr 
of these issues include the diversity of  which SUAG encompasses, cultual and 
matag 
barer assoiate 
language  with the servce population,  confdentialty of
inortion
, and the extrmely short ti fres  proess. 
for the grt awar 
METHODOLOGY 
In respnse to the anticipate diculties with implementig SLIAG, FSA reueste that the 
Ofce of Insptor Genera (OIG) conduct reviews in 10 States to determe the progrss of 
progr 
States ' implementig ths  The FSA selecte nie States and the Distrct of Columbia 
prgr 
beause of the varety of  they offere the number of eligible legalize alens in the 
population, or the amount of the grt. The nie States ar Arzona, Caorna, Colorao, 
Florda Ilois, Masachusett, New York, Texas, and Washington. 
strctu  progr 
Intervews based on  discussion guides for each major  ara, as well as 
umentation fushed by FSA and State and local offcias, built the base of inormation for 
this report. Ths report represents the review conducte in the Distrct of Columbia and 
progr 
reports on its implementation of the SLIAG  as of August 1988.  Both FSA and the Ditrct of Columbia were commtt to identig problems and 
developing inovative and effective solutions for them. Imedately followig our on-site 
th 
visits, FSA was given an outle of the State concerns identied in  report The FSA and 
the Distrct of Columbia have alady intiate action on some of the fidigs and 
reommendations. 
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 shar 
inortion 
with the States on SLIAG legilation, the implications for States, the 
prss, 
application  and the doumentation of costs. 
The FSA also prvide States with "Question and Answer" issuances and 
demogrphic data frm the Imgrtion and Natuzation Servce. 
strtue 
FINDING: The District ofColwnia established a  to identify organizational and 
program needs. 
Hum 
The Distrct of Columbia Deparent of  Servces established a 
Multi-National Eligibilty Unit to determe eligibilty for al noncitizen 
applicants for Aid to Fames with Dependent Chidrn, Genera Assistace, 
Th 
Medcaid, and Medcal Charties. 
process is crtical for accurte and 
aduate delivery of servces, and proper application of policy. 
Afai 
The Executive Dirctor of the Office on Latio  is the single point of 
contat for the Ditrct of Columbia. The Ditor of the Office on Latio 
Afai 
is a cabinet-level position. The placment of the sigle point of contat 
with ths offce ensurd high visibilty for ths prgr which is relatively 
adstere 
sma in most States and could be lost among the larger progrs 
by the larger agencies. 
Base on curnt registrtion inormation, a large number of eligible legalize 
plang 
alen students ar ilterate, which causes problems for  purses. The
progr 
Distrct of Columbia crated a new  caled Amesty Orentation which 
adsses literay and citizenship skis simultaeously.  FINDING: The District of Columia also took immdiate steps to document exenditues 
and control disbursements. 
A discrete identier cod has been develope which identies a persn 
as an 
eligible legalze alen. Th number also contaed a th-digit progr code 
for Medicaid which distigushes eligible legalze alens parcipatig in ths 
prgr frm other tys of reipients. These mior modcations to the 
existig computer system alows for accurte identication and documentation 
ty 
of individual eligible legalze alens reeivig any  of income maitenance 
assistace. 
cInter-D istrct agrments establish "buyer" and "seller" relationships between
Distrct of Columbia agencies. The buyer is the agency using the servce 
whie the seller is the one providig the sece. Unde the agrments, money 
trsferr 
is not actualy  to the provider, insted the agrments 
give the
provider budget authority. The provider must incur costs and submit vouchers 
to clai reimburement. Ths proess gives the grtee agency much more 
control over the SLIAG funds than in other States wher the 
grtee agency
simply trsfers cash to other agencies for SUAG activities. Ths system 
contas a buit-in, ongoing control proess. 
Drwdown of Federa fuds is used to reimbur the Distrct of Columbia 
goverent for 
expenditus. There ar no cash balances beause money must 
be expende before reimburment can 
be reuested. 
Nevereless, there ar some funds contrl vuerabilties. 
FINDING: The FSA's definition of public assistance includes some public health activities 
which created adinistratve and service delivery problems for the Distrct of Columia 
public health agencies. 
FINDING: The District of Columia Commssion on Public Health and the District of 
Colwnia Public School System ha not estalished methods to identfy and validate costs for 
services and benefits to individual eligible legalizefd ualie ns. Without this documentation, the 
Distrct of Columia cannot be reimbursed for the  exended. 
FINDING: The FSA applicatin review process created a numer of signifcant problems for 
the Distrct of Columia. Also, the FSA's application review process interfered with the 
Distrct 
s abilty to plan for services.  Delay in FSA issuig the implementig reguation resulted in the Distrct of 
Columbia s inabilty to properly plan for SUAG. 
Numerous policy misinterpretations and disagrments resulte beause FSA 
did not provide defmitive wrtten instrctions to assist the Distrct of Columbia 
in understadig SUAG application reuiments. 
tie fres 
The  were to shor for submittg the intial SLIAG application, 
FSA review and comment, and revisions of the application. 
progr 
Implementig SLIAG-funde  was delayed beause of a signcant 
notig 
grt 
delay in  the Distrct of Columbia of the  award. 
for 
No  appeal proess exits if progrs or costs ar denied in the fit level review. 
FINDING: At the time of the insectin, the District of Columia ha onl informl 
guidelines from FSA on determning an claming SUAG adnistrative costs, and the 
ha 
Distrct of Columia  not developed methods for determning and documntng these costs. 
As mentioned earlier, FSA and the Distrct of Columbia have alady intiate action on some 
ma 
of the reommndations  in this report. Steps have ben taen by FSA to provide States 
with mor spc, form guidelies for identig and doumentig actual progr and
adtrtive 
costs. However, adtional actions ar necessar in other aras on the par of 
FSA and the Distrct of Columbia. 
RECOMMENDATION: The FSA shoul reconsider its position to clasif certain public 
ma 
health services as public assistance and  appropriate adjustments to thi position. 
RECOMMENDATION: The District of Columia should ensure tha its Commsion on 
Public Health and Public School System deelop a method to identify and validate costs for 
services and benefits to individual eligible legalized aliens. 
ma 
RECOMMENDATION: The FSA should  its application and grant process more 
orderly; Specifcally, FSA should 
provide defitive wrtten instrctions on the SLIAG application reuiments 
and establish a dialogue with the Distrct of Columbia on SLIAG policy, 
compliance, and reportg issues to minie the confusion that occur in the 
intial application process;

ensure that suffcient time is alotted to the application 
process includig: the 
Distrct of Columbia s initial application, FSA' s review and formal comment,  . . . .
the Distrct of Columbia s considetion of FSA comments and negotiation of 
disputes, and its submission of the revise application for FSA approval; 
progr 
develop an appeals process to use if  or costs associated with providig 
servces ar denied in the intial application process; and 
grt 
revise the  award proess for approved applications so that the notice of 
grt  begig 
award reaches the Distrct of Columbia prior to the 
of the fiscal 
year. 
RECOMMENDATION:  The FSA should issue wrttn gudelies for determg and 
adstrtive 
claig SLIAG  costs. Also, the Distrct of Columbia should develop method 
determg 
for  and documentig these costs. 
COMMENTS 
dr 
The FSA and the Distrct of Columbia both commente on the  report They generay
agr 
with our fidigs and reommndations. Both reported havig taen steps to improve 
implementig SUAG. Their  verbati 
comments ar include  ........................ 
... .............  ..................... ..... .... ........ .... ....... ... 
.................................. .......................... ... ............ 
TABLE OF CONTENTS 
EXECUTIVE SUMMARY 
I NTR 0 D U CTIO N ................................................................................ ...................... 1

DISTRICT OF COLUMBIA'S ORGANIZATIONAL STRUCTURE..................... 3

FINDINGS AND RECOMMENDATIONS .................................................................. 4

Pu bll c Ass Isla n ce. ........... ......... ............ ..................................................... 5

Pu bl i c Health Assistance......... .................................. ................. ........ ...... 8

Mental Health ..... 

.......................................................... 1 

Ed ucation  .... .... 12

Crosscutting Issues ............................................................................... 14

OIG RESPONSE TO COMMENTS ......................................................................... 18

APPENDICES 
APP EN DIX A: Good Practl ces ....  ........ ........ ............... A

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

APPENDIX C:  District of Columbia s Comments  C-1  INTRODUCTION 

PURPOSE 
The Famy Support Admstrtion (FSA) reuested that the Ofce of Insptor General 
(OIG) conduct an insption in nie States and the Distrct of Columbia to determe how 
Grts 
implemente the State Legalzation Impact Assistace  (SLIAG) 
effectively the States 
Imgrtion 
progr awarde under the  Reform and Contrl Act (ICA) of 1986. The 
insption included reviewig mehansms in place to identi these funds and determing 
whether prsent or prjecte policies and predurs adere to FSA gudelies. The FSA alo 
was intereste in identig potential prblems ealy in the process and any goo practices 
pertg 
Ths repo prsents the results of the inspetion  to the 
which al States could shar. 
Distrct of Columbia. 
BACKGROUND 
legal 
Under IRCA, eligible  alens may apply for perment residency with a 1-year 
afr 
period  they fIrst beome eligible (Le., by the 31st month afr they reeive tempora 
resident status). 
S. cwii  tizens. 
Th new popultion  incrase the demad for State public assistace and public health 
assistace seces signcantly. It wi also incras the demand for State educational 
nee 
servces as these new residents obta English language and civic skis  to beome
To help States defry may of the costs of providig public assistace, public health 
seces to eligible legalze alens, IRCA authorize $1 bilon 
assistace, and educational 
each year from Fiscal Year (FY) 1988 thugh 1991 for SUAG grts, less an amount 
identied as the ''Federa offset." With few exceptions, eligible legalze alens ar ineligible 
fedy fude  progrs 
for  public assistace  such as Aid to Fames with Dependent 
estited 
Chidrn (AFC), foo staps, and Medcaid The ''Fedra offset" is the  cost to 
the Fedra Governent of providig these servces or benefits to those few legaliz alens 
mion 
who ar eligible for them. In FY 1988, the law alocate $928.  to States. 
To reeive SLIAG fuds, States must apply to the FSA Division of State Legalation 
adstering 
Assistace, which is respnsible for approvig applications and  the program. 
The application must be approved in tota for a State to reive any SUAG funds. The FSA 
also provides States with tehnical assistace on policy issues and on the methods used to 
estimate costs and veriy actual costs.  The basic reuiment for States to clai reimburement is that costs must be alowable, 
progr 
reasonable, and alocable. State public assistace and public health assistace  must 
be the same ones avaiable to the gener public. States canot crate new program in these 
legal 
aras speifcaly for eligible  alens. However, States may crate new or adtional 
progr 
education  for the eligible legalze alen popultion. States may alo clai 
progr adstrtive  adtrtive costs. 
reimburment for  and SUAG 
lite 
Reimburement for public assistace and public health assistace is  only to the amount 
of State and local fuds expende for SLIAG-related costs. The maum SLIAG 
reimburment for educational servces is an average of $500 per year per eligible legalze
alen. Determg progr adnistrtive 
costs is mad in accordce with the fmal 
regution at 45 CF 402.22. 
adsterig  prgr 
The FSA is responsible for  the  Because SUAG was a new program, 
real 
FnSoA r  that prblems would surac early in its imlementation. In adtion to the
reogn
diculties encounte in 
cratig new processes and predurs, FSA 
that SLIAG would have unque problems. Some of these issues include the diversity of 
progr 
which SUAG encompasses, cultual and language barers associated with the 
sece  matag  tie
population,  confdentity of inormation, and the extrmely short 
fres  grt 
for the  award process. 
METHODOLOGY 
The FSA selecte nie States and the Ditrct of Columbia for the inspetion beause of the 
progr 
varety of  offere, the number of eligible legalize alens in the population, or the 
amount of the grt. The nine States ar Arona, Caifornia, Colorao, Florida, ilinois, 
Massachusett, New York, Texas, and Washington. This repo 
reviews the Distrct of 
progr 
Columbia s implementation of the SUAG  as of August 1988. 
strctu 
Pror to conductig the inspetion, the OIG develope  discussion gudes for each 
progr 
major  activity at the State and local levels. In conductig ths review intervews 
were held with offcials from the Ofce on Latio Afai; the Ofces of the Ditor and the 
Controller of the Deparnt of Hum Serces; the Commssions on Social Servces, Public 
Health, and Menta Health; and the Distrct of Columbia Pulic School System. In adtion 
intervews were conducte at the local level of public assistace, menta health, and education.  DISTRICT OF COLUMBIA'S ORGANIZATIONAL STRUCTURE 
adte 
Each State designate a single point of contat to  and coordate the SLIAG 
progr. For the Distrct of Columbia, the contact is the Executive Dirtor of the Offce on 
Afai. 
Latio 
grte 
The  agency is the Deparent of Human Servces which is responsible for the 
drwdown of Fedra fuds, disburment of these fuds to the Distrct of Columbia agencies
provig  repog  Prgr 
SLIAG-relate serces, and  expenditus to FSA. The  Maager 
progr  Deparnt 
respnsible for the day-to-day operation of the SUAG  is locate in the 
Prgr 
Hum 
of  Servces, Ofce of Speal  and Servces. The Deparent of Human 
Serces also houses the Commssion on Socal Serces that prvides public assistace 
fushes 
servces, the Commssion on Public Health which  public heath assistace servces, 
and the Commsion on Menta Heath that is respnsible for menta heath servces. 
Educational servces ar prvide by the Distrct of Columbia Public School System.
Cuntly, the Boar of Education is considere the State education agency. Al agencies 
below the Boar of Education, includig the Superitendent, mae up the local education 
Car 
agency. The Diviion of Adult and  Education, Adult and Communty Education 
Brach, is respnsible for SUAG education progr and seces. The brach has nam a 
progr, 
coordator whoP 
 rgr administe the SLIAG  and works with the single point of contact 
and the  Maager to ensur that systems ar in pla to identi eligible legalze 
progr 
alens parcipatig in the varous  and that fiancial accountig systems 
moded to identi SUAG costs. The coordator also works with the two priar distrct 
facties prvidig adult education to evaluate the kids of progr nee for eligible
legal 
reuir  progrs. 
alens and the resoures  to conduct these  FINDINGS AND RECOMMENDATIONS

identig 
Both FSA and the Distrct of Columbia were commtted to  problems and 
Imately 
developing inovative and effective solutions for them.  followig our on-site 
visits, FSA was given an outle of the State concerns identied in ths report The FSA and 
the Distrct of Columbia have alady intiated action on some of the fidigs and 
reommendations. 
naona  an 
FSA ha held  conferences  issued informtion to States 
FINDING: Since  1987, 
on imlementng the SUAG program. 
The FSA held sever national conferences beginng in 1987 to shar 
inortion 
with States on SLIAG legislation, the implications for States, the 
application pross, and the documentation of costs. 
The FSA also prvide States with "Question and Answer" issuances and 
demogrphic data frm the Imgrtion and Natuzation Servce (IS). 
strtue 
FINDING: The District of Columia established a  to identfy organizational and 
program needs. 
Hum 
The Distrct of Columbia Deparent of  Servces establihed a 
Multi-National Eligibilty Unit to determe eligibilty for al noncitin 
applicants for AFC, Gener Assistace, Medcaid, and Medcal Charties.
Th press 
is crtical for accurte and aduate delivery of servces, and proper 
application of policy. 
The Executive Dictor of the Office on Latio Affai is the single point of 
Ditor 
contat for the Ditrct of Columbia. The  of the Ofce on Latio 
Afai 
is a cabinet-level position. The placment of the single point of contact
witl  prgr 
this offce ensurd high visibilty for ths  which is relatively 
smal in most States and could be lost among the lager progrs adstered 
by the larger agencies. 
Based on curnt registrtion information, a large number of eligible legalzed 
plang 
alen students are iliterate, which causes problems for  purses. The
progr 
Distrct of Columbia crated a new  caled Amesty Orentation which 
adsses literay  simultaeously. 
and citizenship skils  FINDING: The Distrct of Columia also took immdiate steps to documnt exenditures 
and contol disbursement. 
A discrete identier cod has been develope which identies a persn as an 
progr 
eligible legalze alen. Ths number also contaed a th-digit  code 
for Medcaid which distiguishes eligible legalze alens parcipatig in this 
prgr frm other tys of reipients. These mior modcations to the 
existig computer system alows for accurte identication and documentation 
ty 
of individual eligible legalze alens reeivig any  of income matenance 
assistace. 
Icnter-D istrct agrments establish "buyer" and "seller" relationships between
Distrct of Columbia agencies. The buyer is the agency using the servce 
whie the seller is the one providing the sece. Unde the agrments, money 
trsferr 
is not actualy  to the provider of servces. Instead the agrments 
give the provider budget authority. The provider must incur costs and submit 
grte 
vouchers to clai reimburment. This proess gives the  agency much 
mor contrl over the SLIAG funds than in other States where the grtee
agency simply trsfers cash to other agencies for SLIAG activities. 
system contas a buit-in, ongoing contrl proess. 
Drwdown of Feder fuds is used to reimbur the Distrct of Columbia governnt for 
expenditus. Ther ar no cash balances beause money must be expende before 
reimburement can be reueste 
Neverteless, there ar some fuds contrl vuerabilties. 
Findigs and reommendations concerng these vulnerabilties follow under major topic 
aras. Findigs and reommendations which afect more than one assistace progr are 
repo 
discussed in the Crsscuttng Issues section of ths 
PUBLIC ASSISTANCE 
Assitance or Serve Activities 
The Distrct of Columbia offers a number of public assistace programs and servces to its 
residents. To be eligible for these servces, an individual must be a Distrct of Columbia 
progr. 
resident There ar no U.S. citizenship reuiments for these  In fact, a Mayor 
Executive Orr prohibits agencies frm askig questions about legal status uness that  g;, 
inortion is necessar for determg eligibilty for a Federa progr; e.  AFC, 
Medcaid, etc. 
progr 
The major  afecte by SUAG ar Medcai Genera Public Assistace to 
Unemployables, Genera Public Assistace for Chdrn, Medcal Charties, and Emergency 
prgr  adtrtively ar 
Assistace. Also, there ar six  that  public or menta health, but 
for purses of SUAG reimburment were approved by FSA as public assistace. These 
progr ar Clcal Heath, Maternal and Chid Health, Alcohol Treatmnt, Drg Treatment, 
th 
Denta Servces, and the Multicultu Serces Division.  of  distiction on 
(Te impact 
the public health agencies is dicusse in the Public Health Assistace and Menta Health 
setions.) The Distrct of Columbia General Hospita also is considere a public assistace 
sece for purses of SLIG reimburment. 
dentr 
The Income Maitenance Admtrtion has 12  offces thughout the Distrct 
progr 
of Columbia. Individuals can apply for most income matenance  at any of these 
adstrtive 
locations. To eas  protbrlegms, a ssoate with identiyig individual eligible
legal  sta 
alens and to simpliy  a Multi-National Eligibilty Unit was established 
to determe eligibilty of al noncitizen applicants for AFC, General Assistace, Medcaid, 
and Medcal Charties. Ths unit alo completes al reetermations for contiuing eligibilty 
progrs 
for these  for the noncitizen population. 
th  centr 
The Distrct of Columbia offcials  that  intae for ths popultion is crtical 
for accurte and aduate delivery of seces and proper application of policy. The persons 
in ths unt have ben spcaly tred on the spial 
eligibilty issues related to eligible
legal  grte 
alens, persons  citizenship under color of law, and peons eligible for 
assistace under the Ombus Budget Reconciation Act of 1986. 
Documentn of Eligible Legalizd Alien Stats 
The singie point of contact and the Income Matenance Admtrtion ar emphasizig the 
identig 
importce of  individuals as eligible legalze alens at the tie the application is 
taen for benefits or servces. Questions ar asked in a nonthatenig way, and it is 
wi  prgr 
explaied that answers  not afect eligibilty for the  nor be used by the INS to 
deport them or other members of the household. There is a question on the application which 
asks if the individual is a U.S. citizen. If the answer is no, the person is referr to the 
Multi-National Unit. If the peon is an eligible legalze alen, a copy of the alen 
Tempra  Ca 
registrtion car (1-688,  Resident  or 1-688A, Employment Authorzation 
Cad) is mad for the case reord 
Program Costs 
As mentioned previously, a discte identification number identies an individual as an 
eligible legalze alen. The 11 th digit of the Distrct of Columbia identication number is  ctohde-d "5" if the individual is an eligible legalzed alen. Ths numbelre agloa cl ontas a
digit progr cod for Medcaid which distigushes eligible  alens 
parcipatig in ths prgr frm other reipients. Imlementig these identication 
numbers reuied only mior modcations to the exitig computer system whie alowig 
for accurte identication of individual eligible legalze alens reeivig any tye of income
matenance assistace. Use of these identication numbers also wi assist public and menta 
progr  legal 
health  that must identiy individual eligible  alens to document costs, since 
may of these patients use Medcaid or Medcal Charties to pay for the servces. 
Administratve Costs

prgr  estite 
The Distrct of Columbia used 20 pent of the tota SLIAG  costs to  their 
adtrtive 
tota SUAG  costs for FY 1988 and FY 1989. The FSA approved the use of 
estite 
ths 20 percent to  these costs. However, FSA indicated that ths approval was not a 
lie-item apprval and that the Distrct of Columbia would have to veri actual SUAG
adtrtive  claig 
costs when  reimburement. The FSA has not defmed alowable 
SUAG  administrtive activities nor has FSA issued gudelies for documentig these costs. 
The Distrct of Columbia is concered that without any crteria to follow, any method they use 
deterg 
may be questioned in an audit situation. Method for  the actual amount of the 
SUAG adstrtive costs in the afecte agencies had not ben develope at the tie of the 
review. To estiate progr adstrtive costs in the intial FY 1988 application 
progr 
percentages were use for each of the  areas (17 percent for public assistace, 8 
percent for public health, etc.). The FSA approved these computations. When the FY 1988 
updte was submitt FSA indicated that there were problems with the percentages use in 
the intial application, the updte, and the FY 1989 application. The computations were 
figus  progr
realculate and the Distrct of Columbia submitted actual dollar  for the 
admstrtive 
costs for 
FY 1988. Whe the Distrct of Columbia is more comfortble with the revised figus, there 
is concern with documntation of these costs for audit purses, espially for agencies like 
public health that ar not accustomed to tie studies and cost reimburment progrs. 
adtion, the Distrct of Columbia is concerned that FSA initialy approved their methodology 
and later disapproved it retroactively. 
Qrawdown of Funds and Cash Balances 
The Deparent of Human Serces, Ofce of the Contrller drws down Federal fuds, 
usually once each quarr, to reimbur the Distrct of Columbia governnt for expenditus. 
re ar no cash balances beause money must be expended before reimburment can 
reuested. The accountig system has ben moded to include a fundig soure code for 
SLIAG and program codes to identiy the program incung SLIAG expenses.  The Commssions in the Deparent of Huma Servces wi be 
given budget authority to 
Prgr 
obligate a speifc amount frm the SLIAG fund.  agencies wi submit vouchers 
monthy to the Controller s Ofce for reimburment. The vouchers provide inormation on 
the amount of money obligate for each progr and frm each fudig soure. 
Because the Ofce on Latio Afai and the Ditrct of Columbia Public School System 
not par of the Deparnt of Hum Servces, intr-Distrct agrments must be prepar 
trsfer funds frm the Deparent of Human Servces to these two agencies. Under the 
agrments, the seller (the Ofce on Latio Afai or the Distrt of Columbia Public School 
System) must incur costs and submit vouchers to clai reimburment. The Deparnt of
Prgr 
Hum 
Servces  Maager must approve the invoices before the Contrller s Ofce 
wi pay the invoice. 
Th press gives the Deparnt of Hum Serces much mor control over SUAG grt
grte  trsfer 
fuds than ther is in other States wher the  agency simply  cash to other 
agencies for SUAG activities. In adtion, there ar no cash balance or advance-of-funds 
clai 
issues beause agency fuds must be expended before  can be mad for reimbursement. 
awar 
The sane priciple is tre of al contrts  by the Ditrct of Columbia governent. 
PUBLIC HEALTH ASSISTANCE 
Assistane or Serve Activities 
The Commssion on Public Health provides a number of servces which 
ar reimburable with 
SLIG fuds. The Sexual Assault Follow-Up progr, one of those approved by FSA in the 
FY 1988 application, was denied in the FY 1989 application retroactive to FY 1988. Ths 
preednt generated considerable concern beause of the serious implications it has for both 
FSAand the States. 
Retractive diapproval of a program, coupled with retractive disapproval of the 
methodology use to calculte progr adstrtive costs discusse unde Public 
uncerty 
atmspher of 
Assistace, has established an  and distrst. The Ditrct of 
Columbia felt that it is under consideble fiancial rik if costs ar incur for a prgr
thought to be approved for SLIAG reimburment. The impact is geometrc if anticipation of 
reimburment causes the Distrct of Columbia to expnd adtional fuds for other activities. 
Documentaton of Eligible Legalizd Alien Stats 
Public health agencies, lie income maitenance agencies, emphasiz the importce of 
legal 
identiyig an eligible  alen when the  However, no 
person reuests servces. 
processes or identier codes had ben develope at the tie of the review. Using the Income  Matenance Admtrtion mol, intae and referralfor wi be revise to ask 
legal 
spifcaly for th inormtion, and eligible  alens wi be given identication 
numbers. 
Program Costs 
FINDING: The FSA's definition of public assistance includs some public health activities 
which created adnistrative and service delivery problems for the Distrct of Columia 
public health agencies. 
prgr adste 
Sever  by the Commssion on Public Health ar considere public 
prgr  impot 
assistace  for SUAG reimburment  distiction is 
purses. The 
beause the identication of a servce  reuis documentig of costs 
as public assistace 
incur for individual eligible legal alens served H a progr or serce is considere 
public health, the population ratio method for establishig costs can be used Applyig ths 
method costs ar determed by the peentage of eligible legal  alens in a serce 
population to al members of the relevant servce popultion. This percentage is applied to 
progr  reimbur 
tota  costs to determe how much can be  with SLIAG funds. 
Whe there is no quarl with the logic of FSA's defition of public assistace versus public 
adstrtive  prgrtic 
health, the distiction crates serous  and  diculties for public 
health agencies. These agencies, not the public assistace agencies, must develop and 
legal 
implement new proesses for identiyig individual eligible  alens in order to 
document costs. Public health offcis in the Distrct of Columbia ar concerned that asking 
patients about their legal status wi adverly inuence the wigness of patients who are 
ilegal residents to access public health servces. These people often enter the countr with 
highly contagious diseases such as Hepatitis B and nee tratment imedately. The effect of 
ths policy on the public health in general is not known at ths tie. 
The Distrct of Columbia note that, initialy, FSA indicate that servces considere "public 
health" under the State s public health plan would alo be considere public health for SLIAG 
rethg 
reimburment. Ths position changed in June 1988, n  ssitating a tota  of ways 
to distigush public heath frm public assistace for servces provide by public health 
makg 
agencies. The feeling on the par of the Distrct of Columbia offcials is that by  this 
wi 
proess more dicult, States  not be able to claim reimburment for their costs, which 
wi have the effect of seuestering funds. 
RECOMMENDATION: The FSA should reconsider its position to classif certain public 
health services as public assistance and make appropriate adjustmnts to thi position.  Administratve Costs

adtrtive 
Although actual dollar claied for  costs must be documente in some way, 
the Distrct of Columbia public health agencies had not develope a method at the tie of the 
review. 
progr 
Most progr adstrtive costs ar par of  costs for public health. However, 
th figu. 
some progr adstrtive costs ar not include in  Intialy, the Ditrct of 
Columbia submitt a plan to clai these costs using as an estiate the 8 percent indit cost 
cognt 
rate approved by the  Fedra agency. Because of FSA's concern about ths 
computation in the FY 1988 updte and the FY 1989 application, the Distrct of Columbia 
realculate these costs and submitt an actual dollar figu. 
The Commssion on Public Heath had not determed if attmptig to doument and clai 
costs retractively for FY 1988 is cost effective. The delay in the publication of fial 
prgr 
regutions, coupled with the reuiment that may public health  identi 
ma 
individuals to document costs, has  intensive and costly effort that the 
ths such a labor-
Distrct of Columbia may not have the resoures nor the tie to prperly doument costs in 
orr 
to clai reimburment retractively. 
Drawdown 01 Funds an Cash Balanes 
The Deparent of Human Servces, Ofce of the Contrller provides the Commssion 
Public Health with budget authority to expend a speifc dollar figu under the SLIAG 
clai 
account. The Commssion must submit vouchers for funds expende in order to 
Prgr 
reimburment from the SLIAG account. The  Maager must approve the vouchers 
before the Ofce of the Contrller wi authori payment. Since al payments ar cost 
reimburment, there ar no cash advance or cash balce issues. 
MENTAL HEALTH 
Asristance or Serve Activities 
The Distrct of Columbia has a separte Commssion on Menta Health. Within ths 
pComrmsysi on, the-Multicultu Servces Division was established in 1987. The Division is 
a communty-bas progr to meet the menta health servce nee of the grwig
imgrt 
Distrct of Columbia  population. The goal is to preserve the integrty of the famy, 
ethc 
suppor  pride, and assist in adptation to U.S. cultu. The Division provides a wide 
rage of both inpatient and outpatient servces includig psychiatrc assessment, medcation 
nursing and social services, psychological testing, and individual, grup, and famy therapy.  Documentaton of Eligible Legald Alien Stats 
Prgr 
offere by ths agency ar considere public assistace servces for SLIAG 
legal 
reimburment purses. Individual eligible  alens must be identied to document 
costs. When a patient comes to the center for tratment, basic inormation is obtaed,
includig the individual's legal status. The sta is sensitive in approachig ths question.
May ties it is not dicusse unti there is a trst relationship between the patient and the 
counselor. However, at some point durg therapy, legal status is discusse beause it is an
impot 
strssor and an integr par of therapy. Once it has ben established that the patient 
is an eligible legalze alen, a copy of the alen regitrtion car (1-688, Tempo Resident
Ca  ma 
or 1-688A, Employmnt Authortion Cad) is  and beomes par of the patient
reor 
Program Costs 
Patients ar told imedately that there is a bilg system. Diernt method for paymnt
discussed includig Medcar, Medcaid, and Medcal Charties. The Division alady has a 
system to identi costs for individual. 
Once an individual is identied as an eligible legalze alen, a discrte income matenance
use 
identier cod is  There is also a progr cod which identies the fudig soure
SLIAG. Oter fundig soures (e.g., Medcaid) ar shown in the progr cod so only the
apprprate 
percentage is charged to SUAG. Al fianci inormtion provide to the 
counselor is vered by the fianci division with 30 days of the fit visit. 
ar determ 
Rates for tratment  by Medcar, which views the Commssion on Menta 
Health as a hospita with afated clics. 
Financial statements ar submitted to Medcar in 
accordace with the State Menta Health Plan. From these statements, Medcar and the 
Commssion agr on a per diem inpatient rate and outpatient tratmnt 
prgr  rates. These rates 
could beome actual  costs for SUAG reimburment. 
Th "methodology of deterg progr costs was repo to the OIG reviewer at the tie 
of the on-site inspetion. 
Administratve Costs

The Distrct of Columbia has not determed a method to document actual adistrtive 
costs. The 8 percent figu used for public health was also used for menta health to compute 
progr adnistrtive 
costs in the initial FY 1988 applicaclon. 
Ths figu was reomputed 
for the FY 1988 update and the FY 1989 application.  Drawdown of Funds and Cash Balances 
The Commssion on Menta Health uses the sam press as the Commssion on Public 
Health to obta SLIAG fudig. Since al payments ar cost reimbursement, there ar no 
cash advance or cash balance problems. 
EDUCATION 
Assistae or Serve Activis 
The Distrct of Columbia clai SLIAG reimbuarmleynt  only for adult education servces. 
The Distrct of Columbia Public School System  offers a number of cours in English 
laguage and civics skis. Bas on curnt regitrtion inormtion, a large number of the 
40 eligible  at the Gordon Adult Education Center ar ilterate, which 
.legalze alen students 
plang 
prsents speal prblems for  classes. In response, the Distrct of Columbia Public 
prgr 
School System is cratig a new  Amesty Orentation. Th progr 
legal 
siultaeously adsses litey and citizenship skis, which eligible  alens nee 
to convert their status frm tempo to perment. 
The Distrct of Columbia Public School System had plaed to provide spal classes for 
eligible legalze alens durg the sumr when other adult education clases were not in 
grt 
session. However, beause the  for the fIrst hal ofFY 1988 was not awarded unti July 
25, 1988, these classes could not be offere The lack of fundig also afecte the abilty of 
the Distrct of Columbia Public School System to pla for 
the fal semester. 
Although the Distrct of Columbia Public School System plans to contrt for some servces, 
awar 
no contrts had ben  at the tie of the review. Because the grt was not awarded 
unti the end of July 1988, the reuest for prposal was sti being develope The Distrct of 
Columbia Public School System hope to have contrts awared by the end of November 
1988. 
Documentaton of Eligible Legalizd Alien Stats 
Car 
The  and Adult Education Brach has not yet determed how they ar going to identiy 
legal 
individual eligible  alens. Registrtion form have ben moded to reord the alien 
identi 
regitrtion number. The form will be used to  individual eligible legaliz alens and 
to document costs. The registrtion form also provides inormtion on the student s U. 
school attendace. A copy of the alen registrtion car (form 1-688 or 1-688A) wi be kept 
in the student s reord.  Program Costs 
The Distrct of Columbia Public School System offcials believe there wi be enough students 
legal 
in lower-level courses to establih separte classes for eligible  alens, which should 
determg 
simpliy the doumntation of costs for individual students and the process of 
progr adstrtive costs. 
Matag 
wi be a brach or division responsibilty. They 
an unduplicate count 
progr 
prbably crss check registrtion in dierent  using the alelne rgegaisltr tion number to 
ensur that clais ar not in excess of the average $500 per eligible  alen per year. 
reui  prgr 
Contrto wi be  to have a  approved by the INS and to use the alen 
regitrtion number for accurtely doumntig costs and ensur no duplication of  ces. 
Administratve Costs

The State education agency, which in the Distrct of Columbia is the Boar of Education, can 
prgr 
only charge 1.5 percent of  costs for SLIG progr adstrtion costs. The Adult 
Ca 
progr  progr
and  Education Brach has not detered how to calculate  costs, 
adstrtive  adstrtive 
costs, or SUAG  costs. They have not established a method for 
documentig actual costs in any of these aras. The method they use depends heaviy on the 
abilty to establih separte classes for eligible legaliz alens. The Distrct of Columbia 
Public School System preferr the establishment of separte classes for eligible legalzed 
wart 
alens if there were suffcient numbers to  these classes. Ths would faciltate 
identiying such individuals for cost determation purses. However, regareslse ogf calalss  
strctu, the methodology. use would nee to identi those individual eligible 
alens for whom costs would be clamed 
Drawdown of Funds and Cash Balances 
The Distrct of Columbia Public School System wi enter intos anp int r-Distrct agrment 
with the Deparnt of Hum Servces. The agrment wi  servces to be provided 
by the school system in exchange for the money provide by the Deparent of Human 
agrment 
Servces. The  gives the school system budget authority, not cash, to expend funds 
Hum 
unde the SLIAG account establihed in the Deparent of  Servces. The school 
system wi submit vouchers to clai reimburment for any of their fuds expende in 
Prgr 
Maager must approve these voucher befor the 
prvidig SLIAG servces. The 
Deparent of Human Servces, Ofce of the Contrller wi authori payment.  CROSSCUTTNG ISSUES 
FINDING: The Distrct of Columia Commssion on Public Health and the Distrct of 
ha 
Columia Public School System  not estalished methods to identify and validate costs for 
services and benefits to individu eligible legalizefdu ali ens. Without thi documntation, the 
Distrct of Columiacannot be reimbursed for the  exended. 
As note in the setions on Public Health Assistace and Education, the Commssion on 
Public Health and the Distrct of Columbia Public School System either have method to 
legal 
identiy eligible  alens or ar developing method. However, these agencies have 
legal 
not develope systems to doumnt costs for individual eligible  alens. 
RECOMMENDATION: The District of Columia should ensure that its Commssion on 
Public Health and Public School System deelop a method to identfy and validate costs for 
indidu 
services and benefits to  eligible legalized aliens. 
FINDING: The FSA applicatn review process created a nuer of significan problems for 
the Distrct of Columia. Also, the FSA's application review process interfered with the 
Distrct's abilty to plan for services. 
Delay in FSA issuig the implementig reguation resulted in the Distrct of 
Columbia s inabilty to properly plan for SLIAG. 
Numerous policy misinterptations and disagrments resulted beause FSA 
did not provide defitive wrttn instrctions to assist the Distrct of Columbia 
in understadig SUAG application reuiments. 
tie fres 
The  were too short for submittg the intial SLIAG application 
FSA review and comment, and revisions of the application. 
prgr 
Implementig SLIAG-fude  was delayed beause of a signcant 
notig 
delay in  the Distrct of Columbia of the 
grt award 
progr 
No foral appeals proess exists if  or costs ar denied in the fllst level 
review. 
Accordig to fmal regulations published Marh 10, 1988, States had to submit the 1988 
application no later than May 16, 1988. Revisions to the application had to be submittd by 
July 1, 1988, and the FY 1989 application had to be submitte no later than July 15, 1988. 
Applications were to contan brief descrptions of the States  progrs or servces, estiates  progr 
of the States' SLIAG-relate costs for each  or activity for that parcular fiscal year 
(includig inormation on the number of eligible legalze alens residig in the State), and a 
brief explanation of the methodology used to estimate these costs. 

for 
Due lagely to these shan ti fres, FSA provide no  feeback on revisions 
necessar in the Distrct of Columbia s fFYr s19 88 application. . The inormtion was trsmitted 
by telephone or in meetigs. The tie  to make necssar revisions did not 
accommodte the organzational strctu or the nee to communcate with or sek apprval 
frm the progr components impacte by revisions  some 
reueste by FSA. Although 
progr  grt 
changes had a major impact on  and  amounts, the single point of contact 
reeived no offcial rationale from FSA for reuestig the changes. Ths could place the 
contat or the sta level persn who assum responsibilty for revisions in an 
single point of 
awkwar position should the changes or the amount of the grt be questioned 
The FSA would not grt paral fundig nor would FSA conditionaly approve applications. 
If changes wer not ma in accorce with FSA suggestions, the enti application was 
disapproved In adtion, FSA did not prvide the Distrct of Columbia with an appeals 
progrs, 
procss when  costs, or methodologies were not approved The Distrct of 
Columbia had no reour other than to delete the progr entily frm its application or 
forfeit al of the SLIAG funds for that fiscal year. 
The Distrct of Columbia grt awar notice for the fit hal of FY 1988 was reived in late 
ende 
July 1988, afr the fit hal of the fiscal year had  Coupled with the declalya in  
publishig the reguation, ths ma it dicult for the Distrct of Columbia to 
reimburment for much of FY 1988 costs. The Distrct of Columbia wi have to determe if 
it is cost effective to retractively identiy actual costs associate with providig servces to 
eligible legalze alens. 
As of mid-October 1988, the Distrct of Columbia had not reeived the grt awar notice for 
either the seond hal ofFY 1988 nor the fit half ofFY 1989. The contiued delay in 
offcialy notig the Distrct of Columbia of its grt awar has crated fiscal problems. 
the Distrct of Columbia, agencies cannot legaly expend funds unti fundig soures 
crate Since SUAG was a new progr, agencies could not authorze or obligate fuds 
without the grt awar notice. 
ma 
RECOMMENDATION: The FSA shoul  its application and grant process more 
orderly. Specifcally, FSA should 
prvide defitive wrtten instrctions on the SLIAG application reuirments 
and establish a dialogue with the Distrct of Columbia on SLIAG policy, 
occur 
compliance, and reportng issues to minimize the confsion that  in the 
intial application process;
 tie 
ensur that sufcient  is alotted to the application process includig: the 
Distrct of Columbia s initial application, FSA' s review and formal comment, 
the Distrct of Columbia s consideration of FSA comments and negotiation of 
disputes, and its submission of the revise application for FSA approval; 
prss  progr 
develop an appeals  to use if  or costs assocate with providig 
servces ar denied in the intial application prss; and 
grt 
revise the  award proess for approved applications so that the notice of 
begig 
grt awar reaches the Distrct of Columbia prior to the  of the fiscal 
yea. 
FINDING: At the time of the insectin, the Distrct of Columia ha onl informl 
guidelinesfrom FSA on determning and claming SUAG adnistrative costs, an the 
ha 
Distrct of Columia  not deeloped methods for determning an documntng these costs. 
The Distrct of Columbia agencies indicated that the most pressing nee is for form 
adstrtive 
gudelies which deal with acceptable method of documentig  costs. The 
Distrct of Columbia offcials did not feel sufcient guidelies existed to detenJe alowable 
SUAG adstrtive activities. . 
begig 
The FSA held severa national conferences  in 1987 to shar inormation with States 
on SLIAG legislation, the implications and effects of the legilation on the States, the 
application pross, and most reently the documentation of costs. As par of ths effor FSA 
progr 
prvide the States with  inoration via "Question and Answer" issuances and 
demogrphic data from the INS. Yet, accordg to the Distrct of Columbia, "question and 
answer" issues ar not enough and more foral guidelies ar neeed 
The Distrct of Columbia Commssions on Socal Servces, Public Health and Menta Health, 
as well as the Distrct of QJlumbia Public School System, reognze the nee for captug
adtrtive 
costs. However, at the tie of the review, they had not develope 
methodologies to do ths. 
The Distrct of ColumbIa -agencies must reogniz that there ar litations on the dition 
that FSA can provide. Guidelies must be flexible enough to accommodte vartions in State 
systems and interal presses. Ultitely the Distrct of Columbia, as the grtee,
progr 
respnsible for development and implementation of SLIAG  activities, and for fiscal 
documentation of costs and expenditus.  RECOMMENDATION: The FSA shoul issue written guidelines for determning and 
claiming SUAG adnistrative costs. Also, the Distrct of Columia should develop methods 
for determning and documntng these costs.  OIG RESPONSE TO COMMENTS 
dr 
The FSA and the Distrct of Columbia both commente on the  report. 
The FSA 
agr 
The FSA has genery  with the OIG repo fidigs and reommendations. The FSA 
progr 
has taen a number of steps to improve implementig the SUAG  includig
clarg prgr  asts 
policies and prurs. We have moded cert  of the report 
bas on the comments reived frm FSA. 
The FSA questioned the statement that the new population would signcantly incras public 
assistace and public heath assistace servces. Early estiates indicate that large numbers 
qual  prgr.  reogn  inoration 
of alens would  to access the SLIAG  J"e report  that 
obtaed durg the review deteed that substatial incrases in woroad and 
expnditus could occur in these aras as well as in education. However, we understad from 
rent discussions with State offcis that demand for servces nationaly is falg behind 
earlier projections. 
The FSA' s defition of public assistace includes some public health activities which crated 
adstrtive 
and serce deliver prblems for the Distrct of Columbia public health 
agencies. The OIG reommende that FSA reonsider this position. 
se th priary 
The FSA replied that they  as an issue of cost identication and that they 
work with the States to develop method of documentig costs which ar consistent with 
FSA' s respnsibilties as stewar of public fuds. We believe that FSA's actions to identiy 
alternative method is responsive to our conces. 
pets 
Wclea coin tiue to beslipevec th at a strct intetation which  public health costs to be
only for  eligible legalze alens is burdensome to the States and, in many 
reui 
cass, would  considerable revisions to the States' system or statutory reuiments. 
agr 
However, we do  that FSA' s use of alternative systems, such as the Cost Documntation 
System and a revied poulation ratio method system which reflects usage, would be a 
reuig 
effor to enhance cost effectiveness withou,  States to develop new systems 
positive 
or mae consideble reviions to present systems. The population ratio method could be 
revied to consid not only eligible legalze alens in the servce population but also use of 
those servces by eligible legalze alens. Where appropriate, other alternatives might be 
used which would prouce a more effcient system for the States and addss congrssional 
reuir 
intent that the States would not be  to establish new or elaborate systems.  for 
progr 
We report that no  appes proess exists if  costs ar denied in the fit level 
agr 
review. We  with FSA's statement that the Grant Appeals Board does have jursidiction 
over mattrs for witholdig and repayment of SLIAG funds. However, it was the States 
progr 
concern that an effective appes mechansm be in place for issues involvig 
costs at the fit level of FSA's review in the application press. 
ma numus  clar cert matt 
The FSA  comments to  of fact, policy, or procedur. 
We have include these commnts verbati in Appendi 
The Ditrt 01 Columbia 
agr 
The Distrct of Columbia  with the DIG report findings and reommendations. Their 
comments ar include verbatim in Appendi C. Since the time of the on-site review, the 
Distrct has taen steps to fulf stag nee and the designation of a new SUAG 
coordator.  APPENDIX A

GOOD PRACTICES
 A number of pratices have ben identied that other States could shar. 
Based on curnt registrtion inormation, a large number of eligible legalze alen stu
plang 
dents ar ilterate, which causes problems for  purses. The Distrct of Colum
prgr  adsses 
bia crate a new  caled Amesty Orentation which  both literacy 'and 
ski 
citinship  simultaeously. 
cert 
Intr-Distrct agrments establish "buyer" and "seller" relationships between  Dis
trct of Columbia agencies. The buyer is the agency using the servce whie the seller 
the one providig the sece. Unde the agrments, money is not actualy trsfelTed to 
the provider of servces, inste the agrments  The 
prvi  give the provider budget Tauht hporrtoy.s s 
must incur costs and submit voucher to claim reimburement. 
grte 
gives the  agency much more contrl over the SUAG funds than in other States 
wher the grantee agency simply trsfers cash to other agencies for SLIAG activities.
Th 
system contas a buit- , ongoing contrl proess. 
The Distrct of Columbia Deparnt of Huma Servces established a Multi-National El
igibilty Unit to determe eligibilty for al noncitin applicants for AFC, Genera As
sistace, Medcaid, and Medcal Charties. Ths process is crtical for accurte and 
aduate delivery of servces, and proper application of policy. 
The Executive Dirtor of the Ofce on Latio Afai is the single point of contact for 
Dito  Afai 
the Distrct of Columbia. The  Ofce on Latio  is a cabinet-level 
of the 
contact with ths offce ensur high visi
position. The placement of the single point of 
progr 
bilty for ths  which is relatively sma in most States and could be lost among 
the larger progr adstere by the larger agencies. 
A discrte identifier cod has ben develope which identies a persn as an eligible le
galze alen. Th number also contaed a th-digit progr code for Medcaid 
legal  progr 
which distigushes eligible  alens parcipatig in ths  from other 
tys of repients. These minor modcations to the existig computer system alows 
for accurte identication and documentation of individual eligible legalze alens re
ceivig any tye of income matenance assistace. 
 Drwdown of Fedra fuds is used to reimburse the Distrct of Columbia governent 
for expenditues. There ar no cash balances beause money must be expende before re
imburment can be reueste  APPENDIX B

FSA' S COMMENTS
 (( 
APPENDIX B

DEPARTMENT OF HEALTH & HUMAN SERVICES 
.mily SU5:port Administration 
Memorandum 
Date;  June 27, 1989 
Acting Assistant Secretary

From: 
for Family Support

OIG Draft Report: Implementation of the State Legalization

Subiect:  Impact. Assistance 
Grants Under the Immigration Reform and 
Control Act of 1986 - District of Columia 
(OAI-07-88-00444) 
To: 
Richard P. Kusserow

Inspector General

Attached are the Family Support Administration coments
the above draft report. Many of our comments are technical
in nature due to the complexity of the legislation and the

fact that the SLIA
 program was very new at the time 
of the 
rev iew. 
We appreciate the assistance and cooperation we have

received from you in response to our request to. conduct this
round of reviews of the SLIAG program. 
The reports we
received are very useful to us in understanding how States 
program. 
are implementing the  /L-r
I, , 
!it. 
f/
r n

Attachment 
B-1
 REPORT: 
OIG DRA 
Implementation of the state Legalization Impact Assistance Grants 
Under the Immigration Reform and Control Act of 1986:
District of Columia 
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 I s findings, comments on the -findings, and responses to the 
I s 
draft report  recommendations. 
Narrati ve:

Page 1 (Background) -- The draft report says, "This new 
population will increase the demand for state public assistance 
significantly. n 
and public health assistance services  The draft 
report isn't clear whose conclusion this is or upon what data and 
based. 
analysis the conclusion is  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 some aliens were using these 
services before legalization and that newly legalized aliens do
not represent a "
new population" for public assistance and public 
services. 
health assistance  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 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 OIGls 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 
technical assistance. 
ohsi te  We are in the process of conducting 
initial program re iews of the major States, and intend to visit 
B-2  ...
.. .
) -

the District of Columbia and selected other states as well. We 
request that the final report reflect this contin ing dialogue 
wi th states. 
Page 10 (Public 
Health Assistance: Administrative costs 
Pulic 
The draft report says, "The Commission on  Health had not 
determined if attempting to document and claim costs 
retroactively for FY 1988 is cost effective.  The District of 
Columbia can claim costs for those public health programs for 
which they are using the population ratio method without 
documentation. We have provided guidance to States on various 
individuals, 
approaches to establishing actual costs on behalf of 
including extrapolation from partial year data, statistical 
sampling, and using comparable programs in other States or
jurisdictions as a basis. 
We are continuing to work extensively 
with states to help them establish costs for periods during which 
place. 
they did not have tracking systems in 
Page 12 (Mental Health: Program Costs) -- In the discussion on

how patient rates are determined, the draft report says,

Medicare and the Commission agree on a per diem inpatient 
rate and outpatient treatment rates. These rates become actual 
program costs for SLIAG reimbursement.  We are unclear as to 
say. 
what the report intends to  The rates can become the basis 
for determining SLIAG-related costs, but do not automatically 
sliding scale fees,
become the costs because other factors (e. g., 
insurance, etc. 
) may determine what portion of the rate is an 
allowable SLIAG cost. 
Page 13 (Education: Administrative Costs) -- The draft report
says, liThe Adult 
and Career Education Branch has not 
establ ished a 
method for documenting actual costs.... The method 
they use depends heavily on the ability to establish separate 
classes for eligible legalized aliens.  We are uncertain as to 
why the draft report says that the.. District of Columbia needs 
separate classes for eligible legalized aliens in order to 
document costs. They only need to identify as eligible legalized 
aliens those persons they are claiming costs for. There is no 
lease document and explain

need to establish separate classes. 

this claim more fully. Without a documented context, it makes no

sense. 
Findinas: 
Finding:	 The FSA' s definition of public assistance includes some 
public health activities which creates administrative 
B-3  and service delivery problems for the District of

Columbia public health agencies.

Comments:  We question how the definitions of public health and 
public assistance create service delivery problems for 
the District of Columbia public health agencies. 
law and regulation, all programs or acti vi ties under 
both categories must be generally available. 
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 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 
or why OIG recommends that FSA reverse its logic. The 
final report should explain that the regulatory

definitions of public assistance and public health

assistance are based directly on IRCA.

Programs of public assistance are defined as programs
that "
provide for cash, medical or other
assistance.. . 
desianed to meet the basic subsistence or 
health needs of individuals" (section 204 (j) (2) (A) 
s explicit
emphasis added). Consistent with IRCA'
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
transmitt$d 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 pr2o)te. cting 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 the Immigration Reform and Control Act of

1986 (IRCA), which created SLIAG.

often 
Regarding the draft report's concern that aliens "
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. 
The report notes that District of Columbia officials 
feel that because of this issue, "States will not be 
able to claim reimbursement for their costs, which will 
have the effect of sequestering funds.  Without the 
distinction between categories, the District of
Columia 
would likely use the population ratio method 
to establish costs for all programs run by the 
Pulic Health. Implicit in this 
Commission on  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 al owing use of the population ratio 
method for these programs generally would overstate
costs, dramatically in some cases. 
However, we would 
be willing to allow use of the population ratio method
emoirical basis 
for any program for which there is an 
 costs.
to indicate that doing so would not overstate 
FSA realizes that many public assistance and public 
heal th programs don't routinely collect information on 
immigration status, but, we have found that many do 
numers. 
collect social security  That is why we funded 
and devoted substantial staff resources to developing a 
system that will match the social security numbers of 
newly legalized
rogram participants with those o 
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. 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 
ishing costs.
for other possible methods for establ 
None of these al ternati ve methods would require setting.  up new administrative mechanisms or checking status of

all program participants.

We will continue to work closely with the District of

Columia to develop methodologies to document costs for

all programs in its approved applications.

Finding:  numer of 
The FSA application process created a 
significant problems for the District of Columbia. 
Also, the FSA' s application review process interfered
with the District' 
s ability to plan for services. 
the. time period for 
Comments:  The draft report says that 
submission, review, revision and approval of the 
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
allocat 
on formula, one major 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 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 the District of Columbia in understanding SLIAG

application requirements.  Had there been more time,

we would have communicated more extensively in writing.

Comments on the District's FY 1989 application were

made in writing in response to the District's request.

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 wi thholdinq 
and repayment of funds. For other matters, the state

may follow normal procedures for disagreeing with an

agency finding. 
Finding:  he time of the inspection, the District of Columbia

At 
had only informal guidelines from FSA on determining

and claiming SLIAG administrative costs, and the

District of Columbia had not developed methods for

determining and documenting these costs.

B-6  Comments:	 Several methods for determining the share 
administrative costs in ongoing programs that are 
a Driori

allocable to SLIAG and which are acceptable 	
are specified in the regulation at 45 CFR 402. 22 (b) .
Addi tional quidance is offered in the manual 
"Establishing and Documenting Actual Costs," October 
1988, Modules 8 and 9. The process of determining 
SLIAG administrative costs, like all costs associated 
with administering HHS grants, is governed by 45 CFR 
Parts 74 and 92 and relevant OMS circulars. 
We would like to note that this comment applies to the

draft report. s discussion under public assistance 
administrative costs (p. 7) and public health 
(p. 10). 
assistance administrative costs  We ag  ee with
the draft report' 
s assertion that " (UJ 1 timately the
District of Columia, as the 
qrantee, is responsible
for. . . 
fiscal documentation of costs and expenditures. 
Three 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 
pasosissittainocen a. nd make appropriate adjustments to this
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 believe that using the population ratio method for

all health department programs would be inconsistent

with our responsibility to exercise fiscal

funds. 
responsibility 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' 

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. 
B-7  . .
Recommenda t i on:  The FSA gran t process should be made mor
orderly. 
Response:	 The draft report' 
s recommendation refer$ 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 recomendation
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 was necessarily
short. 
In effect, the States and we had to
complete two appl ic 
tion 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 h1av. e extended the deadline 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 prior to the
deadline. 
In order to reduce the possibility of 
misunderstanding, we have advised States that we
will 
com 
nicate all substantive questions and 
concerns on their FY 1990 applications in writing,
as was done for States' end-of-year reports. We
issued extensive written guidance on the FY 1990
appl ica tion 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 withholding

of funds. 
Normal channels within the Department 
are open to States that disagree with decisions 
made during the course of application review. 
Recommendation: ' The FSA should issue written guidelines for 
determining and claiming SLIAG
administrative costs.  Response: Our comments under Finding #4 specify the 
guidelines offered to States in the regulation 
and.
in subsequent written guidance.  APPENDIX C

DISTRICT OF COLUMBIA'S COMMENTS
 APPENDIX C

GOVERNMENT OF THE DISTRICT OF COLUMBIA 
EXECUTIVE OFFICE OF THE MAYOR 
OFFICE ON LATINO AFFAIRS 
REEVES MUNICIPAL CENTER

2000 I.TH STREET. N.W. - SECOND FLOOR

WASHINGTON. D. C. 20008

TELE  HONE 12021 838-8785 
August 9. 1989

Richard P. Kusserow

Ins pector Gene ra 1 
S. Department of Heal th and Human Services 
C. 
Washington. D. 20201 
Dear Mr. Kusserow:

We have reviewed your offi ce ' s draft report on imp1 ementati on of the 
SLIAG program and found it to be a fai rly accurate representa ti on of the 
the  the 
status of  Distri'ct of Columbia  implementation of  State 
sumer. 
Legalization Impact Assistance program as of the end of last  The 
few errors.. which naturally occur during brief site visits. in no way 
the 
take away from  description. which is fair and sound. We 'had not 
planned to submit coments. but are sending you this letter at Mr. Hugh 
Owens  s request. 
This spring the District of Columbia Department of Human Services 

which serves as grantee and administering agency and will soon become 
uSinngilte.  Point of Contact as well -- completed hiring staff for its SLIAG
Ms. Gayle 
Smith -- a DHS staff member of long standing who has 
wSohorukle dd  oyn oSuLI ArGe qusii nrcee  ii tnsfo innncae tpit oinon o -n-  tihs eco corudrirneantotr s otfa ttuhse  noefw  uSLnIAitG.  
implementation. please do not hesitate to call Ms. Smith. 202-673-3420 
re1Y.
Si 
cs-e 
Susan B. But1 
SLIAG Coordinator/OLA

C-l