, .
THE 
STATE 
IMPLEMENTATION OF 
LEGALIZATION IMPACT ASSISTANCE 
GRANTS UNDER THE IMMIGRATION 
EFORM AND CONTROL ACT OF 1986 
NEW YORK
STA TE  OF 
f.1\VIC!'S' 
'0 
:tlt"dIa 
OFFICE OF INSPECTOR GENERAL 
OFFICE OF ANALYSIS AND INSPECTIONS 
OCTOBER 1989  'r '

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 cUIently informed about programs or management problems and recommends 
corrective action. The OIG perform its mission by conducting audits, investigations, and in
spections with approximately 1 300 sta 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 accordace with professional stadads developed 
OAl. These inspections ar tyically short-term studies designed to determne program effec
tiveness, effciency, and vulnerability to fraud or abuse. Ths study was conducted to 
deter
mine the effectiveness of New York' s implementation of State Legalzation Impact Assistace 
Grants funds awarded under the Immgration Reform and Control Act of 1986. The report 
was prepared under the diection of Don McLaughlin, the Regional Inspector Genera of Re
gion VII, Office of Analysis and Inspections. Parcipating in this project were the following 
people: 
Kansas City  San Francisco 
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

NEW YORK

STATE  OF 
Richard P. Kusserow 
INSPECTOR GENERAL 
OAI-07 -88-0044  OCTOBER 1989  EXECUTIVE SUMMARY 
PURPOSE 
The purose of ths inspection was to determe how effectively New York implemented the 
identi 
State Legalization Impact Assistace Grants (SLIAG) program, to  potential problems 
early in the process, and to identiy goo practices which all 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 aliens. In Fiscal Year (F) 1988, $928.5 miion 
progr fuds  wi 
in  were allocated to States, and funds  contiue to be alocated though FY 
1991. These fuds also cover admnistrtive costs for implementig SLIAG at the State and 
local levels. Payments are made for public assistace activities generaly avaiable to all 
needy individuals and public health assistace servces offered under the States' public health 
progrs. The payments also cover educational servces designed to assist eligible legalzed 
alens to att a satisfactory level of performce in school and to achieve English language 
proficiency and citizenship skis necessar to become permanent residents. The Famy 
Support Admnistrtion (FSA) is responsible for admistering the program. 
Because SLIAG was a new progr, FSA realzed that problems would surace early in its 
implementation. In addition to the norm diculties encountered in creatig new processes 
and procedur s, FSA recognze that SLIAG would have unique problems. Some of these 
issues include the diversity of programs which SLIAG encompasses, cultu and language 
barers associated with the servce population, maintaing confidentiality of information, and 
fres 
the extremely short time  for the  process. 
grt award 
METHODOLOGY 
In response to the anticipated diculties with implementing SLIAG, FSA requested that the 
Offce of Inspector General (OIG) conduct reviews in 10 States to determne the progress of 
States ' implementing ths progr. The FSA selected nine States and the Distrct of 
Columbia because of the varety of programs they offere, the number of eligible legalzed 
alens in the population, or the amount of the grt. The nine States ar Arzona, Calfornia, 
Ilois, 
Colorado, Florida,  Massachusetts, New York, Texas, and Washigton. 
strctu 
Interviews based on  discussion guides for each major program 
ara, as well as 
documentation fuished by FSA and State and local offcials, built the base of information for 
this report. This report represents the review conducted in the State of New York and report 
on its implementation of the SLIAG program as of August 1988.  Both FSA and New York were commtt to identing problems and developing innovative 
and effective solutions for them. Imediately following our on-site visits, FSA was given an 
outline of the State concerns identied in this report 
1987 FSA has held national conferences and issued information to 
FINDING: Since 

States on implementing the SUAG program. 
The FSA held several national conferences beginning 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 
demogrphic data from the Imgration and Natualization Servce. 
FINDING: New York evaluated its ability to idntify eligible legalzed aliens, documented 
costs  steps to ensure compliance with SLIAG requirements. 
for serves, and took 
The State Deparent of Social Servces instrcted local social service distrcts 
to identi and mantan a manual list of inormation on individuals who are 
determned to be eligible for SLIAG-reimburable assistace and services. The 
inormation would be maintaied in the client s record where it would be 
avaiable for enterig into the automated State/Federal Charge Indicators for 
Servce System, when the system is operational. 
In the New York City area, major educational servce providers were aleady 
par of a centrized data system known as "Alles." Plans were to mody this 
system to document costs for servces to identified eligible legalized alen 
students. 
FINDING: New York will use a wide network of educatonal serve providers, assess the 
educatinal stats of eligible legalized aliens, and refer them to appropriate programs. 
The State Deparent of Education wil use a wide varety of CUlent 
educational service providers, though contracts, to conduct SLIAG-related 
progr. 
educational  These providers have proven their effectiveness in 
English for speakers of other languages, citizenship, 
delivering instrction in 
adult basic education, and high school equivalency for out-of-school youths and 
adults. 
To meet the parcular needs of eligible legalized alens, educational agencies 
receiving SLIAG funds are expected to conduct a pre-enrollment appraisal not 
only to acquir SLIAG-related eligibilty information, but also to assess  English-speakng abilty and knowledge of the history and governent of the 
Unite States. Based on the apprasal, individuals wi be referred to appropriate 
progrs 
and program levels. 
Neverteless, there are some funds contrl vulnerabilties. 
FINDING: The State had not developed formal procedures for peridic reviews of cash bal
ances. 
The Deparent of Social Servces, the grtee agency, had not formalzed a 
process to monitor cash balances that may occur as a result of interdeparenta 
transfers of SLIAG funds. 
FINDING: The FSA's definition of public assistance includes some public health assis
tance activies which created administrative and servce delivery problems for New York. 
FINDING: The FSA applicaton review process creatd a number of signifcant problems 
for New York. Also, the FSA' s applicaton review process interfered with the State s abilit 
to plan 
for servces. 
Delay in FSA issuig the implementing regulation resulted in the State 
inabilty to properly plan for SLIAG. 
Numerous policy misinterpretations and disagreements resulted because FSA 
did not provide definitive wrtten instrctions to assist New York in 
understadig SLIAG application requirements. 
The tie frames were too short for submittig the intial SLIAG application 
review and comment, and revisions of the application. 
Implementig SLIAG-funded programs was delayed because of a signifcant 
delay in notiyig New York of the 
grt awar. 
FINDING: The State did not have methodologies in place to identify eligible legalized 
aliens to record costs for public assistance and public health assistance. 
FINDING: State interdepartental Memorandums of Understanding outlining each 
departenfs liability for SLIAG funding purposes had not been finalized.  As mentioned earlier, FSA and New York have aleady initiated action on some of the 
recommendations made in this report. Steps have been taen by FSA to provide States with 
more specific, formal guidelines for identifyng and documentig actual program and 
admnistrtive costs. However, additional actions ar necessar in other areas on the par of 
FSA and New York. 
RECOMMENDATION: The Departent of Socia Serves should develop and implement 
formal procedures to ensure that the departent is aware of cash balances that may exist as 
a result of interdepartental transfers of SLIAG funds. 
RECOMMENDATION: The FSA should reconsider its position to 
classif certain public 
health servces as public assistance and make approprite adjustments to this positon. 
RECOMMENDATION: The FSA should make its appUcation and grant process more or
derly. Specifcally, FSA should 
provide defiitive wrtten instrctions on the SLIAG application requirments 
and establish a dialogue with New York on SLIAG policy, compliance, and 
reportng issues to minimize the confusion that occured in the intial application 
process; 
tie 
ensur that suffcient  is allotted to the application process includig New 
York' s intial application, FSA' s review and formal comment, New York' 
consideration of FSA comments and negotiation of disputes, and its submission 
of the revised application for FSA approval; and 
revise the grant award proess for approved applications so that the notice of 
grant award reaches New York prior to the beginning of the fiscal year. 
RECOMMENDATION: The Departents of Social Servces and Health should develop 
and implement a process to effectively identify indiviual eligible legaUzed aliens. 
RECOMMENDATION: The Stat should take the necessary action to finalize all Memo
randums of Understanding so tha interagency responsibilitis can be clearly set forth and 
acted upon as necessary. 
COMMENTS 
drt 
The FSA and the State of New York both commented on the 
report They generaly 
agreed with our fmdings and recommendations. Both indicated indicated steps had been taken 
to furer implement the SLIAG program. Their comments are included verbatim in 
appendices B and C, respectively.  ........... 
TABLE OF CONTENTS 
EXECUTIVE SUMMARY 
NTRO D U CTIO N ... ...11........ ... ....... ......... lIe8 1111118... .. IIII. .11.... II ... I1I1 "11II  ....11..11 II 11.11II  II.. II II II 11"1111 ..1111111II1 II 11..1II1..  II II II II IIII .....

NEW YORK'S ORGANIZATIONAL STRUCTURE 
........................................ 3

FINDINGS AND RECOMMENDATIONS 
...80...0...11....1111...."...........8...,....111111..................... 4

Pu bl i c Assistance.. 
lie II... .... ... 11111I1I1"1" .... ..... II...It
 11..11.......... 11.11.................. 11.11.............11.............. II" ... II" ..11 5

Pu bl ic Health Assistance... II......." ... II".."" 111111.1.11 1... II..."".."".." 1111111.11.111
......11 II"""." II"".."" ...11 7

Ed ucation ..... ... ....11....11... II .."11 ..11........ II.... II 1111111111. 11...... 11111111 ....11.......... 11l111......111111..
 11.11........ 111111 

Crosscutting Issues ..1111.......11111111111101111.........11..11111111.......1111111111.,....11.....a.II.,................ 

OIG RESPONSE TO COMMENTS 
...11.".......11.1111.....11..11..11110.....,..11.....11...111111..,........11.................0 

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

APPENDIX B:  FSA' s Comments ...................................11........... ............ B

APPENDIX C:  New York's Comments ...,............................................... C
 INTRODUCTION

PURPOSE 
The Famy Support Admistrtion (FSA) reuested that the Offce of Inspector General 
(OIG) conduct an inspection in nine States and the Distrct of Columbia to determe how 
effectively the States implemented the State Legalzation Impact Assistace Grats (SLIAG) 
progr 
awarded under the Imgration Reform and Control Act (ICA) of 1986. The 
inspection included reviewig mechansms in place to identify these funds and determning 
whether present or projected policies and proedures adere to FSA guidelies. The FSA also 
was interested in identifyg potential problems early in the process and goo practices which 
pertg 
al States could shar. Ths report presents the results of the inspection  to the State 
of New York. 
BACKGROUND 
Under IRCA, eligible legalize aliens may apply for permanent residency with a I-year

period afer they are fIrst eligible (Le., by the 31 st month after they receive temporar resident

status).

Ths new population will increase the demand for State public assistance and public health

wi 
assistace servces signcantly. It  also increase the demand for State educational servces

obta 
as these new residents  English language and civic skils needed to become U.

citiens.

To help States defray many of the costs of providing public 
assistace, public health 
assistace, and educational servces to eligible legalze aliens, IRCA authorized $1 bilion 
(F 
each year from Fiscal Year  1988 thugh 1991 for SLIAG grts, less an amount 
identied as the "Federa offset." With few exceptions, eligible legald alens ar ineligible 
progrs 
for federaly funded public assistance  such as Aid to Fames with Dependent 
Chidrn (AFC), foo stamps, and Medcaid. The "Federal offset" is the estiated cost 
the Federal Governent of providig these servces or benefits to those few legalizd aliens 
who ar eligible for them. In FY 1988, the law alocated $928.5 millon to States. 
To receive SLIAG funds, States must apply to the FSA Division of State Legalization 
Assistace, which is responsible for approving applications and admnistering the program. 
The application must be approved in tota for a State to receive any SLIAG funds. The FSA 
also provides States with technical assistace on policy issues and on the methods used to 
determne costs and verify actual costs.  The basic reuiment for States to clai reimburement is that costs must be alowable, 
reasonable, and alocable. State public assistace and public health assistance program must 
be the same ones available to the general public. States cannot create new program in these 
areas specifcaly for eligible legalize alens. However, States may create new or addtional 
education progrs for eligible legalze aliens. States may also claim reimbursement for 
progr admstrtive and SLIAG admistrative costs. 
Reimburement for public assistace and public health assistace is lited only to the amount 
maxum 
of State and local funds expended for SLIAG-related costs. The  SLIAG 
reimbursement for educational servces is an average of $500 per year per eligible legalzed 
alen. Determg progr adnistrtive costs is made in accordace with the fmal 
reguation at 45 CF 402.22. 
The FSA is responsible for adnistering the program Because SLIAG was a new program, 
real 
FSA  that problems would surace early in its implementation. In addition to the 
norm diculties encountered in creatig new processes and proedures, FSA recognizd 
that SLIAG would have unque problems. Some of these issues include the diversity of 
progrs which SLIAG encompasses, cultual and language baners associated with the 
servce population, maintaing confdentiality of inormation, and the extrmely short time 
fres 
for the grant award process. 
METHODOLOGY 
nie 
The FSA selected  States and the Distrct of Columbia for the inspection because of the 
varety of program offered, the number of eligible legalized aliens in the population, or the 
amount of the  nine States are Arzona, California, Colorado, Florida, lllinois, 
grt. The 
Massachusetts, New York, Texas, and Washington. This report reviews New York' 
progr 
implementation of the SLIAG  as of August 1988. 
strctu 
Pror to conductig the inspection, the OIG developed  discussion guides for each 
major program activity at the State and local levels. In conducting this review, intervews 
were held with offcials from the Deparent of Social Servces, the State Deparent of 
Health' s Division of Epidemiology, and the State Education Deparent s Burau of Adult 
Progr 
and Continuing Education  Development Additional telephone discussions were also 
held. 
The visits were coordinated by staf frm the Deparent of Social Servces, Offce of Audit 
and Qualty Control. Pror to the on-site visit, materials furished by the Deparent of 
Social Services' Burau of Policies, Plans and Program were reviewed, as well as the 
application approved by FSA. Materials supplied by respondents were also reviewed.  NEW YORK'S ORGANIZATIONAL STRUCTURE

The Deparent of Social Servces is responsible for the State s public assistace activities, 
and has been designated as the single point of contact and the grantee agency for the SLIAG 
progr. Day-to-day admnistrtion of the program is in the Offce of Famly and Chidren 
Servces, and the State s Refugee Coordinator has been negotiatig the application. 
The State Deparent of Health, which is responsible for State public health servces, is 
divided into two sections: the Offce of Health Systems Management and Public Health. The 
SLIAG health progrs ar admstered by the Division of Epidemiology, which is in the 
Public Health section. Each county has its own public health organation usualy headed by 
regional health deparent offcial. State-level sta deal dictly with individual county 
offcials. The ultiate responsibilty rests with the State. 
The admstration and supervsion of SLIAG-related education services rests with the State 
Deparent of Education and its Burau of Adult and Continuing Education Program 
Development The enti progr wil be admnistered at the State level.  FINDINGS AND RECOMMENDATIONS

commtt  identig 
Both FSA and New York were  to  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 ths report 
FSA has held national conferences and issued information to 
FINDING: Since  1987, 
Stats on implementing the SUAG program. 
The FSA held several national conferences beginning 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 
Imgrtion 
demographic data from the  and Natuization Servce. 
FINDING: New York evaluated its ability to idntify eligible legalized aliens, documented 
costs  steps to ensure compliance with SUAG requirements. 
for serves, and took 
The State Deparent of Social Servces instrcted local social service distrcts 
to identi and maintain a manual list of information on individuals who are 
determed by the State to be eligible for SLIAG-reimbursable assistace and 
servces. The information would be maitaied in the client s record where it 
would be avaiable for entering into the automated StatelFederal Charge 
Indicators for Service System, when the system is workig. 
In the N ew York City area, major educational service providers were aleady 
par of a centrze data system known as "Ales." Whe plans were to modfy 
found it more expedtious for agencies to develop its 
ths system, the State has 
own SLIAG data base for reportng and documenting costs. 
FINDING: New York will use a wide network of educatonal serve providers, assess the 
educatnal stas of eligible legalized aliens, and refer them to appropriat programs. 
The State Deparent of Education will use a wide varety of curent 
educational servce providers, though contracts, to conduct SLIAG-related 
educational program. These providers have proven their effectiveness in 
deliverig instrction in English for speakers of other languages, citizenship, 
adult basic education, and high school equivalency for out-of-school youths and 
adults. The providers include local educational agencies, postsecondar 
institutions, qualified designated entities, community-based organizations, and  other public and private not-for-profit agencies, such as school distrcts, Boards 
of Cooperative Educational Services, libraes, and volunteer groups.

In order to meet the parcular needs of eligible legalied alens, educational 
agencies receivig SLIAG funds are expected to conduct a pre-enrollment 
appraisal not only to acquire SLIAG-related eligibilty inormation,
but also to 
assess English-speakng abilty and knowledge of the history and governent of 
the United States. Based on the apprasal, individuals wil be referrd to 
progr 
appropriate programs and  levels. 
Neverteless, there are some funds contrl vuerabilties. Findigs and recommendations 
concerng these vulnerabilties follow under major topic areas. 
PUBLIC ASSISTANCE 
Assistance or Serves Activitis 
The Deparent of Social Servces is responsible for State public assistance activities. These 
activities include: 
Emergency Assistace to Adults; 
Supplementa Securty Income (SSI); 
Home Relief, Foster Car, foo staps (adistration); 
Methadone Maitenance;

Residential Drug Free and Ambulatory Drg Free;

Outpatient -Tertar, Inpatient, Residential;

Ofce of Menta Retation and Developmental Disabilties; and

program. 
Alcohol Treatment and Rehabiltation 
No new SLIAG-relate programs were established in public assistace. The State 
responsible for such services. However, vendors and contrctors may be used. 
Documentation of Eligible Legalized Alien Status 
Pror to the avaiabilty of the StatelFedera Charge Indicators for Services System, local 
social servce distrcts were instrcted to identify and maintai a manual list of individuals. 
These persons ar determned to be eligible for SLIAG-reimbursable assistace and services 
as a result of an adjustment of their alen status under IRCA. This inormation will be 
maintaed in the client s record. For those eligible legalized aliens who ar eligible for 
Medicaid, a separte code wil be assigned, and it wil be added to the curnt system.  Program Costs 
The Deparent of Social Services' Offce of Budget Management used the most recent 
expenditu data and client population estimates available to project progratic costs. The 
SLIAG application represents the deparent s best estiate of expenditus 
required for 
progr 
implementation. The State anticipates no major changes in the accountig system. 
The budget offce wil treat SLIAG as if it were a separte grant by giving the SLIAG 
progr  Clai wil 
its own cost center code.  be made agaist this code. 
Distrbution of funds between State agencies wi be based upon projection of costs and 
avaiable Federa funds. Prority in alocations wi be  meetig the 
given to programs 
subsistence nees of the eligible legalze alien population and progrs providing language 
and citizenship instrctions necessar to adjust to imgration status. 
Mter Federa transfer of SLIAG funds to the Deparent s Federa Assistace Financing 
System, the Deparent of Social Servces wi effect a drawdown and initiate a certcation 
of fuds for the Division of the Budget On a monthy basis, the Deparentof Social 
wi 
Servces  provide a conCUIent payment to the other State agencies based upon a stadad 
clai form. An ongoing conCUIent payment/reconcilation proess wi be performed by the
Deparent of Social Servces. 
Actual expenditus wi be reonciled compiled, and adjusted annualy. Financialliabilty 
for inappropriate expenditus or nonuse of SLIAG funds, and consequently for any audit 
wi 
exception  reside with each State agency receivig and expendig funds. Acknowledgig 
and acceptig this responsibilty is a condition of 
receiving funds. 
Administrative Costs 
At the tie of the on-site review, the deparent s indiect cost rate was 35.59 percent 
tie 
Personnel  is prorated and the costs spread across the programs. Cost estiates in the 
application reflected State and local costs. These estimated costs are not 
duplicate between 
progrs 
par  frm 
and fees, and thir- revenues have been elimnated  these estimates. 
Detals of expenditus encompassed in the quarrly expenditu report submittd 
on ths 
progrs ar 
and other  received in the Deparent of Social Servces for the comptroller 
prepartion of reports for components receivig SLIAG funds. There was no indication as to 
progr. 
when the State wil be audited under the single audit 
Drawdown of Funds and Cash Balances 
The details of the Memorandums of Understanding have not been finalzed, but it is expected 
that the drawdown of Federal funds will be no different than the 
curnt procedur. Under this 
procedur, the Deparent of Social Serviceslbudget offce would receive a  frm 
grt award 
the U.S. Deparent of Health and Human Services (HS) and reflect the funds on a budget  certcate. The fiscal sta would then drw funds on an "as needed" basis upon approval of 
the budget certcate. 
The procedur for interagency (interdeparental) transfer of funds agai is the same as for 
progrs. 
other Federa  There are basicaly two ways that the transfers could be processed: 
The Deparent of Socia Services could subalocate funds by certcate and 
have a Memoradum of Understading in place with the afecte State 
agencies, or 
The Deparent of Social Servces could transfer monies by means of a joural 
trsfer 
voucher or speal charge voucher. Ths method of  is generay covered 
though a Memorandum of Understadig. 
FINDING: The Stat had not developedfonnal procedures/or peridic reviews 0/ cash 
balances. 
As the grantee agency, the Deparent of Social Servces is responsible for the 
interdeparenta trsfer of SLIAG funds to car out the puroses of the legislation. The 
process of monitorig any cash balances that may be create as a result of these transfers is 
though accessing the New York State comptroller s termal. However, the State did not 
have form proedures in place to conduct periodc reviews of cash balances. 
RECOMMENDATION: The Departent 0/ Socia Serves should develop and implement 
/onnal procedures to ensure that the deparent is aware of cash balances that may exist as 
a result 0/ interdepartental transfers of SLIAG funds. 
PUBLIC HEALTH ASSISTANCE 
Assistance or Serve Activities 
The State Deparent of Health will provide servces and treatments related to sexualy 
trsmitted diseases, imunizations, prenatal car, famy planing, tuberculosis, mv testing, 
substace abuse, outpatient-priar and seconda, and alcoholism prevention. 
progrs 
No new  were established because of the SLIAG fundig. Most of the programs are
adstered diectly by the State or thugh agrements with the individual counties. The 
counties may then have agreements with individual providers such as famy plannig, 
prenata car, and community health centers. 
The application process wil be no different for eligible legalized aliens than it is for other 
recipients of services. Curntly, the State is unable to document and identify the individual 
eligible legalized aliens that wil utiliz the services provided. The cUIent protocol is to serve  anyone who requests servce regaress of alen status. Proof of alen status is not requested. 
Because of this protocol, the State wil continue to utiize the ratio method and wil exclude 
frm SLIAG funds dollars received frm other Federal programs. 
Program Costs 
FINDING: The FSA's definiton o/public assistance includes some public health assist
ance activities which created administratve and servce delivery problems/or New York. 
The SLIAG progr reuirs that certn tertar level public health progrs be considered 
as public assistace. Ths reuirment has substatial impact for the State because it is now 
imperative to identi the individual eligible legalze alens so that costs can be documented 
for them. Ths reuirs extensively modfyg procedurs and may negatively afect alens 
seekig medical servces. State offcials were concerned that the FSA was not aware of the 
problems ths could create for the State. 
RECOMMENDATION: The FSA should reconsider its position to 
classif certain public 
health servces as public assistance and make approprie adjustments to this position. 
Administrative Costs 
Accordig to staf, the deparent s CUIent indict cost rate has not been approved 
Although the Memorandum of Understadig has not been fmalzed, the State believes that it 
wi  mod 
not be necessar to  the accountig system. Expenditus wil be documented by 
deparents as they ar reeived frm the contrctors. The Deparent of Social Servces 
deals diectly with the State Deparent of Health's Offce of Health Systems Management to 
discuss the bad debt and charty pool cases. The deparent wil use a formula approach 
whereby public health costs will be reimbursed with State and local dollars, and State 
reimbursement claied from SLIAG funds. 
Drawdown 0/ Funds and Cash Balances 
The Deparent of Social Servces provides funds to the Deparent of Health though 
quarrly certcates of trsfer. 
EDUCATION 
Assistance or Service Activities 
progrs, 
In New York, SLIAG funding for educational services wil be reserved for adult 
specifically language and citizenship preparation. Because of the small number of children 
who would be eligible to enroll in the SLIAG progr, no services wil be provided to 
childrn.  Educational servces wil be provided to adults thugh local education agencies, 
postseconda institutions, qualifed designated entities, community-based organizations, and 
other public and private not-for-profit agencies that have shown their effectiveness in 
deliverig instrction in English for speakers of other languages and citizenship education. 
Anualy,  Deparent of Education operates a program of adult basic education in 
the State 
English for speakers of other languages, and high school equivalency 
instrction for 
00 
approxiately 115, out-of-school youth and adults. Prgrams are operated by school 
distrcts, Boards of Cooperative Educational Servces, postseconda institutions, libraes, 
community-based organzations, and volunteer grups. 
The State Deparent of Education planed to contrct with CUIent providers to conduct 
SLIAG-relate educational program. In some cases, the State Deparent of Education wil 
contrct with smaler providers though intermedares. It is anticipated that addtional 
providers wi parcipate in the program. The deparent will award SLIAG fundig to 
eligible agencies based upon submission and consideration of requests for proposal bids. 
Eligible agencies applyig for SLIG funds wil receive awards based on factors such as the 
estiate 
number of eligible legalize aliens aleady being served, the number  to be served in 
progr 
the  year, demonstrted effectiveness in providing English for speakers of other 
languages or citizenship instrction, reasonable costs relative to other applicant agencies, 
outrach referral, and comprehensiveness of planning with other agencies. 
In New York City, where an estiated 80 percent of the eligible legalze alens 

parcipate in progrs, $500 will purhase approxiately 111 hour of instrction. Thus,

SLIAG fundig alone should be suffcient to fund the needed instrctional program to meet

perment resident status.

Documentation of Eligible Legalized Alien Stats 
It is anticipated that agencies receivig SLIAG funds will conduct a pre-enrllment 
assessment to determne an eligible legalzed alen s abilty to speak and understand English 
and knowledge of the history and government of the United States. 
The pre-enrollment appraisal proess will provide informtion on students' educational 
history, demogrphic charcteristics, and data supportg their tempora residency status. 
Based on ths apprasal, each eligible legalizd alen will be referrd to appropriate programs 
and program levels. 
The students wi be identied with a centralze data system known as "Alles." It will be 
modfied thugh the Litera Assistace Center in New York City. The major providers are 
curntly par of this system. Servce providers receiving SLIAG funds periodcaly ar 
expected to report on the recipients,  extent of such funding. 
purose, and  Program Costs 
The individual requests for proposals wil address the issues of fundig to the parcular 
providers as well as the relate SLIAG costs not claimed for other progrs. Each individual 
progr 
provider is expected to fie a fisc  or  report. Sta from the State Deparent of 
Education wil perform desk audits, provide technical assistace, and monitor progrs on 
ongoing basis. 
The SLIAG funds ar disbured to the Deparents of Social Services and Education, and 
subsequently distrbuted to eligible agencies by provider contrcts. Advance payments ar not 
given to agencies under contrct The one alowable exception is for funded, not-for-profit 
agencies, who ar able to receive 12.5 percent advance payments. 
Agencies receivig funds under this program must collect and report data to document or 
progr 
veriy enrollent, attndace, progrss, certcation, and  expenditus. Ths allows 
the deparent to monitor cash balances. At the time of the review, a Memoradum of 
Understadig between the two agencies to transfer SLIAG funds from the Deparent of 
Social Servces to the State Deparent of Education was nearg completion. 
Administratve Costs

The State Deparent of Education has confidence in the CUIent comptroller s accountig 
system and feels that addng SLIAG to the system wil not present a problem. Accordig to 
staf intervewed, the State Deparent of Education is the designated agency for determing 
an indict cost rate, which is a component of admistrative costs. 
The State Deparent of Education and the Deparent of Social Servces had not finalized a 
Memorandum of Understading regardig the Deparent of Education s liabilty and how 
adstrtive 
the  costs will be dispersed. Plans ar to use the curent State comptroller 
procedurs for alocatig funds. Admistrative costs wi be funded from other components
with the deparent. Since thSs is aL shoIrt-tAerm pGrogr.,  the deparent is reluctant to 
incrase the number of sta for 
Drawdown of Funds and Cash Balances 
The Deparent of Social Services provides funds to the State Education Deparent though 
quarrly certficates of trsfer. 
CROSSCUTTING ISSUES 
Accordig to fmal regulations published Marh 10, 1988, States had to submit the FY 1988 
application no later than May 16, 1988. Revisions to the application had to be submitted by 
July 1, 1988, and the FY 1989 application had to be submitted no later than July 15, 1988.  progrs 
Applications were to contan brief descrptions of the State 
or servces, estimates 
of the State s SLIAG-related costs for each program or activity for that parcular fiscal year 
(including inormation on the number of eligible legalze alens residing in the State), and a 
brief explanation of the methodology used to estimate these costs. 
FINDING: The FSA application review process creatd a number of signifcant problems 
for New York. Also, the FSA's applicaton review process interfered with the State s abilit 
. to plan for servces.

Delay in FSA issuing the implementing regulation resulted in the State 
inabilty to properly plan for SLIAG. 
Numerous policy misinterpretations and disagreements resulted because FSA 
did not provide defInitive wrtten instrctions to assist New York in 
understading SLIAG application requirments. 
The tie frames were too short for submittg the intial SLIAG application 
review and comment, and revisions of the application. 
Implementing SLIAG-funded programs was delayed because of a signifcant 
delay in notiying New York of the 
grant award. 
The FSA has the responsibilty to review and approve or deny State applications for SLIAG 
fundig for designated program. The application approval is a key proess for the State since 
progrs 
it must wait for FSA action to know which  have been approved for SLIAG funding 
puroses. 
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 dialogue with New York on SLIAG policy, compliance, and 
reportg issues to miimize the confusion that occurd in the initial application 
process; 
ensur that sufficient time is allotted to the application process including New 
York' s initial application, FSA' s review and formal comment, New York' 
consideration of FSA comments and negotiation of disputes, and its submission 
of the revised application for FSA approval; and  revise the grant award proess for approved applications so that the notice of 
grant award reaches New York prior to the begining of the fiscal year. 
FINDING: The State did not have methodologies in place to identify eligible legalized 
aliens to record costs for public assistance and public health assistance. 
The Deparent of Social Servces anticipates establishing a State/Federa Charge Indicators 
for Servce system to identiy and mantan information on eligible legalize alien status. The 
deparent had instrcted local social service offces to obtan information on applicants 
eligible legalzed alen status thugh a manual operation. 
The Deparent of Health is responsible for admistering al public health progrs, 
progrs 
includig those  classifed as public assistace for SLIAG funding puroses. The 
deparent had not developed a proess or methodology to identify individual eligible
legaliz 
aliens so costs applicable to them can be identified. 
RECOMMENDATION: The Departents of Social Servces and Health should develop 
and implement a process to effectively identify indiviual eligible legalized aliens. 
FINDING: State interdeparntal Memorandums of Understanding outlining each 
deparenfs  ha 
liability for SLIAG funding purposes  not been finalized. 
th 
adsterig  progr ar 
The  entities involved in  the SLIAG  the Deparent of Social 
Servces, the State Deparent of Health, and the State Deparent of Education. Individual 
Memorandum of Understadig were being prepar to outle each deparent s liabilty. 
RECOMMENDATION: The State should take the necessar action to 
finalize all 
Memorandums of Understanding so tha interagency responsibilitis can be clearly set 
forth and acted upon as necessar.  OIG RESPONSE TO COMMENTS 
drt 
The FSA and the State of New York both commented on the  report 
THE FSA 
agr 
The FSA has generaly  with the OIG report findings and recommendations. The FSA 
progr 
has taen a number of steps to improve implementation of the SLIAG  includig 
claryig program policies and proedures. In the report the State had severa concerns about 
adstered  moded certn 
how FSA  the progr. We have  aspects of the report based on 
the comments received frm FSA. 
The FSA questioned the statement that the new population would 
signifcantly increase public 
assistace and public health assistace servces. Early estiates indicated that large numbers 
qual  recogn 
of alens would  to access the SLIAG program. The report  that information 
obtaed durg the review determned that substatial incrases in workloads and 
expenditus could occur in these aras as well as in education. However, we understad from 
recent discussions with States' offcials that the demand for service  nationally is falling 
behind earlier projections. 
The FSA's defition of public assistace included some public health activities which crated 
admstrative and servce delivery problems for New York public health agencies. The OIG 
recommended that FSA reonsider ths position. 
priary 
The FSA replied that they see this  as an issue of cost identication and that they wil 
work with the States to develop method of documentig costs which ar consistent with 
FSA' s responsibilties as stewards of public funds. We believe that FSA's actions to identify 
alternative methods is responsive to our concerns. 
We contiue to believe that a strct interpretation which permts public health costs to be 
claied only for specifc eligible legalze alens is burdensome to the States and, in many 
cases, would reuie considerable revisions to the States' system or statutory requiments. 
agr 
However, we do  that FSA's use of alternative systems, such as the Cost Documentation 
System and a revised population ratio method system which reflects usage, would be a 
positive effort to enhance cost effectiveness without reuirg States to develop new systems 
or make considerable revisions to present systems. The population ratio method could be 
revised to consider not only eligible legalized aliens in the servce population but also use of 
those servces by the eligible legalized alien population based on informtion aleady obtained 
progr 
from  experience. Where appropriate, other alternatives might be used which would 
produce a more effcient system for the States and address congrssional intent that the States 
would not be required to establish new or elaborate systems.  We report that no formal appeals proess exists if program costs ar denied in the fIrst level 
review. We agree with FSA' s statement that the Grant Appeals Board does have jursdiction 
over matters for withholdig and repayment of SLIAG funds. However, it was the States 
concern that an effective appeals mechanism be in place for issues involving program or 
costs at the fIrst level of FSA' s review in the application process. 
The FSA made numerous comments to clarfy certain matters of fact, policy, or procedur. 
We have included these comments verbati in Appendi 
The Stae Of New York 
The State has generay agreed with the OIG report fIndings and recommendations. Their 
comments ar included verbati in Appendix C. Two of the thee deparents (Social 
fuer 
Servces and Education) indicated specific steps they have taken to  implement the 
progr 
SLIAG  since the time of the on-site review. 
However, based on the comments received from the Deparent of Health, there is no 
legal 
indication that they have established a process to identify individual eligible  alens. 
Ths process is necessar when certn public health assistace progrs ar considered as 
fudig. 
public assistace for SLIAG  Claims for reimbursement of such costs would be 
improper where costs cannot be traced to individual eligible legalized alens.  APPENDIX A

GOOD PRACTICES
 A number of practices have been identified that other States could shar. 
In New York City, which has the bul of the State s adult education progrs, the State 
wi use a system known as "Ales" to identiy eligible legalzed alens and document 
costs for the adult education program. The eligible legalzed alens seeking educational 
servces have generay been identied, since ths system was in place prior to implement
progr. 
ing the SLIAG 
The State Deparent of Education wi use a wide varety of curnt educational servce 
progrs. 
providers, though contrcts, to conduct SLIAG-related educational  These pro
viders have proved their effectiveness in deliverig instrction in English for speakers of 
other languages, citizenship, adult basic education, and high school equivalency for out-
of-school youths and adults. The providers include local education agencies, postsecond
ar institutions, qualed designated entities, community-based organzations, and other 
public and private not-for-profit agencies such as school distrcts, Boars of Cooperative 
Educational Servces, librares, and volunteer  the 
groups, most of which are afilates of 
Literacy Volunteers of New York State. 
legaliz 
In order to meet the parcular needs of eligible  aliens, educational agencies re
ceivig SLIAG funds ar expecte to conduct a pre-enrllment apprasal process. This 
wi 
process  provide inormation on an individual's abilty to speak and understand En
glish, knowledge of the history and governent of the United States, educational history, 
demogrphic charcteristics, and residency status. Based on the apprasal, individuals 
wi be referred to appropriate progrs and progr levels. 
Pror to the avaiabilty of an automated StatelFedera Charge Indicators for Servce Sys
tem, the State Deparent of Social Servces instrcte local social servce distrcts to 
identiy and maitan a manual list of individuals determed to be eligible for SLIAG-re
imburable assistace and servces. The list would include an individual's State identity 
number, alen registrtion number, legalization status, the date legal status was granted 
under IRCA, and the tye of benefits provided The information would be maintaied in 
the client s record where it would be available for entr into the automated system.  APPENDIX B

FSA' S COMMENTS
 ."; 

. ;

-:..'"
APPENDIX B

DEPARTMENT OF HEALTH II HUMAN SERVICES  Family SuPPOrt Admlnlalratlon 
Office 01 Relugee Ruellemeni 
Memorandunl 
Refer to: 
ly 14. 1939

Dall: 
From:  Acting Assistant Secretary 
for Family Support 
Subject: OIa Draft Report: Implementation of the State Legalization 
Impact Assistance Grants Under the Imigration Reform and 
.r-1I7-
Control Act of 19S6 - New York  FI-1It: 't/
To: 
usserow
Richard P. 

Inspector General

Attached are the Family Support Administration comments on

the above draft report. Many of our coments are technical 
in nature due to the complexity of the legislation . 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

round of reviews of the SLIAG program. 
The reports we 
received are very useful to us in understanding how States

are implementing the program.

erine BertJ.ni

Attachment
 OIG DRAFT REPORT:

Implementation or the state Legalization Impact Assistance Grants 
Under the Immigration Reform and Control Act of 1986: 
NEW YORK 
The Family Support Administration I 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. 
Narrative: 
Page 1 (Background) -- The draft report says, "This new 
population will increase the demand for state public assistance
and public health assistance services significantly. II The draft 
report isn It 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 
heal th assistance services. Preliminary cost data from States 
suggests that newly legalized aliens are accessing public 
assistance services at rates far lower than the general
population. 
There are indications that a backlog of public 
heal th needs existed and was identified during the medical 
examinations required of all applicants for 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 pu lic health assistance or public assistance services. 
Page 2 (Background) -- The draft report says, "States must

develop a method acceptable to FSA fo  determining administrative

costs. II The final report should note" that several methods for
determining: the share 
of administrative costs in ongoing programs 
are 
a Driori 
that are allocable to SLIAG and which are acceptable 
specified in the regulation at 4S CFR 402.22 (b) . The process of
(those costs incurred in
determining SLIAG administrative costs 
administering the SLIAG grant itself), like all costs associated 
ith administering HHS grants, is governed by 4S CFR Parts 74 and

92 and relevant OMB circulars.

Page S (Public 
Assistance) -- The draft report states, "No new 
SLIAG-related programs were established in public assistance. " It 
is important to note that all programs of public assistance must 
mpp  hTee criteria. First they must be generally available to
ttehes tpeodpu.l ation of the State. Secondly, they must be means-
Lastly, they must provide for the subsistence or health  of the individual. As noted above, the requirement that the 
programs be generally available would preclude the State from 
developing any prog ams for "eligible legalized aliens.  The 
clear. 
final report should make that point 
Page 8 (Administrative Costs) -- The draft report says, "The 
Department of Social Services deals directly with the State 
Department of Health' s Office of Health Systems Management to 
discuss the bad debt and charity pool cases. II It should be noted 
debt. 
that SLIAG funds do not pay for bad 
Page 8 (Education) -- The draft report says, "Annually, the State 
Department of Education operates a program of adult basic 
education in English for speakers of other languages, and high 
school equivalency instruction for approximately 115, 000 out-of
school youth and adults. It should be noted that the three-year 
rule limiting SLIAG reimbursement to students who have been 
enrolled in school for less than three complete academic years 
also applies to the "out-of-school youth" group. 
Page 10 -- The draft report says, "Advance payments are not given

to agencies under contract. The one allowable exception is for

private, not-for-profit agencies, who are able to receive 25

II It is not clear if this is an

percent advance payment. 
exception allowable only under contract or if the State is

generally allowing a 25% advance.

Findi 
Finding: 
since 1987, FSA has held national conferences and 
issued information to states on implementing the SLIAG 
program.
Comment:  Since the OIG's onsite visits in August 1988, we have 
continued to provide assistance to States. We have 
conducted several more workshops and meetings to assist 
states in implementation.  n 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 onsite technical 
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 dialogue 
with states. 
Finding:  The FSA' s definition of public: assistance includes some 
public health activities which creates administrative 
and service delivery problems for New York.  Comments:	 We question how the definitions of public health and 
public assistance create service delivery problems for 
New York 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 were reimburse  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 why the 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 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.. . 
designed to meet the basic subsistence or 
heal th needs of individuals" (section 204 (j) (2) (A)
emphasis added). Consistent with IRCA'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" 

(section 204 (j) (3) (A) J. 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 
publ ic health assistance as, among other things,

that "
programs or activities  are provided for the 
primary purpose of pr2ot)e.c ting the health of the general

public" 
(45 CFR 402.  The s90pe of programs included 
in that regulatory definition bf public health

assistance goes far beyond the specific activities

listed in IRCA.
 .' ,

.J '

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 
. eligible 
assumption that legalized aliens will access 
programs in the same frequency and at the same cost as
the general population. 
We do not believe this 
assumption to be appropriate for medical assistance 
programs that provide treatment to needy individuals. 
To the contrary, the information that we have to date 
indicates that allowing use of the population ratio 
method for these programs generally would overstate 
costs, dramatically in some cases. However, 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
numer 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 
years. 
1988 as well as current and future  Recently, we 
sent State SLIAG Single Points of Contact suggestions 
or establ ishing costs. 
for other possible methods 
None of these alternative methods requires setting up 
w administrative mechanisms or checking status of all

program participants.

We will continue to work closely with New York to

develop methodologies to ddcument costs for all

programs in its approved applications.

Finding:  The FSA appl ication process created a numer of 
significant problems for New York. Also, the FSA I S 
appl ication review process interfered with the state I s 
ability to plan for services. 

.ILlI-=U C.s :  The draft report says that the time period for

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 Teport 
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 before we can 
calculate states' allocations. 
The draft report says that "numerous policy

ed because

misinterpretations and disagreements resul 	
FSA did not provide definitive written instructions to

assist New York in understanding SLIAG application

requirements. II 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 aver issues related to the 
wi thholding and repayment of funds. For other matters, 
the State may follow normal procedures for disagreeing 
with an agency finding. 
Recommendations: 
Recommendation: The 
FSA grant process should be made more
orderly. 
Response:	 The draft report' 
s recommendation refers to the FSA 
grant process, but the specifics indicate that it is 
referring to the SLIAG application and grant award 
process. . The language of 
the recommendation should be 
more specific. 
We agree that the appl ication 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

han a year. We do not

application processes in less 

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 misunderstanding,

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' 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 
wi th 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 
Departments of Social Services and Health 
should develop and implement a process to effectively 
identify individual eligible legalized aliens. 
Response:  HHS has made a variety of options for tracking costs 
available to states. If it is not possible or cost 
effective for States to base their SLIAG related costs 
on an actual count of eligible legalized aliens 
accessing services, states may opt to use the Cost 
Documentation System, the population ratio method (for
public health assistance), .or statistical sampling, or
ive methods to HHS. 
states may suggest al terna  . -
'- - ,,'" ::,-'- -- .
:... " 0 
APPENDIX C 
NEW YORK'S COMMENTS  .. 
'! 
, , 
, ..
,., . ,
APPENDIX C

EW YORK STATE

DI:PARTMEST Of SOCIAL 
SER\'ICES 
40 SORTH PEARL STREET. AlBASY, SEW 
YORK 11243. 
CESA  A PE ALES 
rnn''''I'U')ft'f 
IP 
RE: You  Rert 
on the Reiew
of Stte I.ization Inct 
A(si#st8 Gr9t -
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De 
1" 
Mr. 
is 
in  to yo 
Jun 19,  rert 
illemtion of th Stte Lesizhat ion Inct  1989  on th
Det
Prl:eci ion Nie deStttei. on.  cx(SUN) 
York  Asis Gr

of Heath (D:) am FdcatioWn e( SE) amt ha rre ratt twcithh t ht hStitre '

. your  for
\t wil add  add 
DepHae. r I'lil-= ticn  to th
thos 
inep  le: 
Fir, \t 
fon 
trfer  to 
th SLI  mr.itor
Se,  re of 
fu.
in  bpler 
to deelcpin an  rns
ord  cx 
identify eligible legized aliens inu  tt  to rerd  a p
asist proide claiJ  for pulic
Abasse soins p :ation , \t alredy  Feder a P  methodolog,
ratios, to the 
appro. If tht  Division of Stte Leization
(ISIA) for  apprc is mt  so, 
to us eith th  tian Syst  given  we plan
claCo iJ  co. or a sttisicaly vaid 
methodolog for  1988 
AN EOUAL OPPORTUNITY/AFFIRMATIVE ACTION EMPLOYER  Page 2

t1 
Finly, 
Mera  Ialerti
relative to  on tht all integen
of  th  stzed  ne  ot 
M: with SE ar ar d.evel  in (Kas) ba e finsized,i
 s  KX for ahalv e in plaScet taen 
agenies inlved in SLI p.lic  clai. 
'I 
tr 
c:ts
co. 
yo for shin th 
add  ou 
adeqtey  you  report with us an 
:'1./ 
O:ssion./ 
InRric h 
Mr.  P.
Hl 
Inr seice 
Heth "an 
Dept. of 
Office of 
Ro 
I5r25e0 pen 
W200 asn,  Aven S.
D. C. 20201 
Attadm  " ' . .. ' :,.  .
.,,;,;~, ;.~~ :-. , ., :' : - .!:j  )\,  :" p.  .. .,,  ,:' ". 
STATE OF NEW YORK 
:ib1%1  1f1P 
. ':t4' ,. DEPARTMENT OF HEALTH 
"i-
Corr":-'9 T':.'/er  It'0 G'  . N/ 'I' )LV'  )!er  f r"";)r  ,;. P;.'  t.;I);jr.  "'lCo'. "  ?2::
'r ': ' 
i)' l:"1 :"  ' I.

, . I . I . :. 

July 20. 1989

Joseph P. Ferrone

Director 
Bureau of Pol icies. Plans and Programs

i ty Control

Office of Audit and Qual 
NYS Department of Social Services

40 N. Pearl Street

12243-0001

Albany. New York 
Dear Mr. Ferrone: 
' on 
Department of Health staff have reviewed the audit  Overall, 
implementation of the State LegalizatiOn Impact Assistance Grant. 
the report reflects accurately the comments and concerns raised duringT hteh e
meeting with OIG officials by Department of Health representatives. 
report acknowledges the problems inherent in the Family Support 
The lack of coherent 
Administration ' s (FSA) management of the program. 
DHHS and 
commni cat ion between 
rules. the dearth of guidance and the poor 
fficul t to 
icated program infinitely more di 
the states has made a compl 
manage. The specific recommendations which apply to the Department of 
Health , warrant several comments, 
Recorrendat ion: 
The FSA should recons.der its position to classify certain public

heal th services as public assistance and make appropriate adjustments to

this position.

Comment: 
Programs 
th agrees with the recommendation. 
The Department of Heal 
ow require a tracking system to identify
classified as public assistance- Programs 
(EtA) using the service. 
individual eligible legalized aliens

ssistance can be reimbursed using the ratio

mappreovetdh aso pudbl.ic  Ihenaltdh
ividual identification of EtAs is impossible because legal 
status is not routinely asked when public health services are provided. 
Inclusion of this question could act as a disincentive for program
of a service,

enrollment of those individuals most in need '

publ i c 
o see the concept of "
The Department of Health would 1 ike  publ ic 
rams des i gnared as 
heal th" expanded by the FSA to include all pro  programs are el igible 
heal th by the State. The FSA staff deteriningi nwghi icnh  public health, Public 
under the public health category have no 

health programs provided by the Department and available to New York

residents (whether ElAS or not) should all be eligible for reimbursement

under the heading of public health assistance.
 Recorrendat ion: 
The Departments of Social Services and Heal 
th should develop and

implement a process to effectively identify 
individual eligible legalized

al iens, 
Coment: 
This focuses on the same issue discussed. above. Identification
of ELAs is incompatible wi 
th the Department' s posi tion of providing service
to all individuals regardless of their legal status, 
Even if a method could 
dev ised, it would not be cost-effective. 
be  The difficulties associated 
wi th designing and implement ing a tracking system are formidable. 
It would 
be simpler and less costly to use the ratio method of determining 
reimbursable costs. If the FSA redefines some programs as publ ic health 
assistance rather than public assistance, the issue of identifying

individual ELAs will be moot.

Thank you for sharing the audit report with us. 
Robert W. Reed

Director 
Fiscal Management Group

dIp 
cc:	 Mr. Leavy 
Mr. VanDeCarr 
Dr. Novick 
Ms. Buckley 
Ms. Klein

Ms. Carlton

Page 2
 . - 
' .
.. . . - ,. .  y' '  , ' 
- -  . ... . : '
II,. W.k 
THE STATE EDUCATION DEPARTMENT.  : i  11F. !M4T( 0.  "IPo 
\ Y.  .. / t 2::;.. 
EXECUTIVE DEPuTY CDMMISSIO"-ER OF EDUCATION 
THE NEw YORI( STATE EOVCATION DEPARTMENT 
ALBANY, NEW VORl( '2234 
July 
13, 1989 
Joseph P. Ferrone

rector 
Di 
Bureau of Policies, Plans

And Programs 
Office of Audi  Control
t and Qual 

New York State Department

of SocIal Services

40 North Pearl Street 
Albany, NY 
12243-0001 
Dear Mr. Ferrone: 
In response to your 
June 29, 1989 letter, we have reviewed
S. 
the June
 1989 draft copy of  Office 
the U.
General'  of Inspector
(OIG) audit report 
of State Legalization Impact  on New York State s implementation
Assistance Grant 
(SLIAG) funding.
The State Education Department'
1.  s (SED) reactions are as follows:
On pages 4, 9, and 13 of the draft report, while OrG is
correct in saying that plans were being discussed 
the central " to modi fy
ALLIES" data base, since then each of the four
major  education 
agencies has found it more expedi 
ddeovceluomp eintts ionwng  SLcIoAGs tdsat.a  b.a
 se for pro, ram  tious to
reporting
2. 
25%, On apnadg et 1h0i,s  thwe a"sc masha daed vaavnaciel"a bplreo tvoi ded is  1/2  not
12
p3ro.f!  t. -agencies. all funded not-for
to 
egard  the 
UnderWsi ttha  nding (MOU) for FexYpe 9di0  tin,  Memaonradnd um of
funding, SED  State
Department of Social Services (SDSS) have 
already begun
discussions to assure that the 
MOU will be completed early
penloaucgeh  btoy  enable all1 c,o ntracts and subcontracts to be in
October 
s incl udes 
continuation apploicaft ion 198w9. hich  issuance of a
identification  rolloveirs f uton dbei nrget,u arnnedd  by July 28,
interagency
discussions on the FY 90 
funding level for 
SED.  ",I 
4", 
t'fI 
that 
4. Coode a rPe  rac:plteaisecd  es  set:lion of extensively cited
elcomcS EDi  nis ligUhlet  of  Thinis t ihse

particularly  reports. 	 the 
emen la t i on prubl  difficult
impl  ems posed by the SLIAC 
program. 
I hope these comments are responsive to YOur 

request. 
Sincerely, 
Thomas E. Sheldon

vmc 
cc:	
James A. Kadamus 
Russell J. Kratz 
Robert Purga 
C-b  0'