($
Departent of Health and Human Servces 
. OFFICE 
GENERA 
INSPECTOR 
TH  AN ELIGffIL 
INCOME  TI  VERICATION SYSTE (lVS):
FOR REFORM? 
Richard P. Kusserow 
INSPECfOR GENERA 
'oaa 
JUY 
1991  GENRA 
OF INSPECTOR 
CE 
The miion of the Offce of Inpector 
General (OIG); as mandated by Public Law 95-452 
as amended, is to protect the integrty of the Deparment of Health and Human Servce 
(HS) program as well as the health and welfare of beneficiaries served by those programs.
Th 
statutory mision is caed out though a nationwide network of audits, investigations 
and inpetions conducted by three OIG operatig components: the Offce of Audit
Servce, the Offce of Investigations, and the Offce of Evaluation and Inpections. The 
OIG also inorm the Secretary of HHS of program and management problems and 
recmmends courses to correct them. 
OFFCE OF AUDIT SERVICE 
The OIG's Offce of Audit Servce (OAS) provides all auditing servce for HHS, either by
conducting audits with its own audit resource or by overseeing audit work done by others. 
Audits examie the performance of HHS 
programs and/or its grantee and contractors in 
carrg out their respective responsibilties and are intended to provide independent 
assesments of HHS programs and operations in order to reduce waste, abuse, and
mimanagement and to promote ecnomy and effciency throughout the Department. 
OFFCE OF INTIGATIONS 
The OIG's Offce of Investigations (01) conducts crial, civi and admitrative 
investigations of allegations of wrongdoing in HHS programs or to HHS beneficiares and of 
unjust enrchment by providers. The investigative effort of 01 lead to crial convictions 
admitrative sanctions, or civi money penalties. The 01 also oversee State Medicaid fraud 
control units which investigate and prosecute fraud and patient abuse in the Medicaid 
program. 
AN 
OFFICE OF EVALUATION  INSPECTONS 
The OIG's Offce of Evaluation and Inpections (OEI) conducts short-term management and 
program evaluations (caed inspetions) that focus on issues of concern to the Deparment
the Congres, and the public. The fidings and recmmendations contained in these 
inpection report generate rapid, accurate, and up-to-date information on the effciency, 
vulnerabilty, and effectivenes of deparmental programs. This report was prepared in the 
Boston Regional offce under the direction of Regional Inspector General 
Mark R. Yessian, Ph.  , and Deputy Regional Inspector General Marta B. Kvaal. Project
staff include: 
Theodore T. WaI  Alan S. Levine  Headqarters
Barr C. McCoy 
David Schrag
 Department of Health and Human Servces 
OFFICE OF 
INSPECTOR GENERAL 
TI 
AN 
INCOME  EUTGfIfI LIT VERICATION SYSTE (IEVS):
FOR REFORM? 
"CEs' 
Richard P. Kusserow 
INSPECTOR GENERA 
"6 
9010 
..a 
. OEI-Ol- EXECUTIVE 
SUMMAR Y

PUROSES 
The purposes of this study are to (1) 
synthesize the fidings and reco=endations of 
several recent reports examining the implementation of Income and Eligibilty 
Verication Systems (IEVS) by Ihe States
, and (2) offer conclusions for Federal 
offcials and others considering fuure directions for IEVS. 
BACKGROUN 
Since the mid-1980'  , the Federal government has required each State to have an 
IEVS. The purpose of an IEVS is to reduce waste, abuse
, and costs in the  Aid 
Famiies with Dependent Children, Food Stamps, and Medicaid programs. An IEVS
is a system, usually automated, for matching financial information received from 
public assistance clients with information in certain Federal and State 
data bases. It
helps States identif those who are 
ineligible or who receive incorrect benefit 
payments because their incomes or resources exceed allowable liits. 
In recent years, several Federal agencies and a national organiztion representing 
exaed 
State welfare agencies have 
aspects of States' implementation of IEVS. At 
the request of the President's Council on Integrty and Effciency, we have analyzed 
the reports of these 10 studies. We supplemented this analysis with discussions with
Federal and State welfare officias concerned with IEVS. 
Ths report 
provides a 
synthesis of the studies' findings and recommendations. A detailed summary of the 
studies appears as appendix A of this report. 
FIINGS 
Severl recent stu idti m.r proble wih  ' impletatin of 
the States IEVS.
Th inate 
that: 
information in the Federal data bases has been inaccurate
, duplicative 
untimely, or inaccesible; 
Federal requirements, in important respects, are highly prescriptive, or
unclear, or inconsilent; and 
the administrative capacity of many States to implement IEVS is 
limited by insuffcient staff and inadequate computer resources.  stu 
recommtins concerg  raures  ades 
State'  but 
Th  make  no  Fed reqem.  part th inatt h do 
Fedral data bases and  In  tht: 
the usefulness of the Federal data bases should be improved; and 
Federal requirements of the States should be 
modied. One report
calls for them to be made more flexible; 
othr reports urge that they 
be more specifc. Several reports urge they be better coordinated 
among the Federal agencies. 
in 
Fed da  Fed reem 
In th thee State we visited,. proble whih i  b,.es 
ope 
and  resoures st appe to  efort to 
CONCLUSIONS 
The problems identified in this report appear to be substmtial enough to warrant 
further examination of IEVS. Toward that end, the Offce of Inspector General wil
undertake further study addressing the 
effectiveness of paIcular matches. In 
addition, the Department of Health and Human Servces and the Department of 
Agriculture might weII consider a basic reexamination of IEVS. That reexamination 
might address ways in which: 
the Federal government could give States more flexibility in carrng
out IEVS matches and at the same time hold them more accountable 
for results;

Federal data bases used in IEVS matches 
mit be made more useful; 
and 
additional Federal data could be made available to States.  . . . . . . ..  ..  ..  ..  ...   ...   ...   ...   ...   ...   ...   ...   ...   ...   ...   ...   ...   ...   ...   ...   ...   ...   ...   ...   ...   ...   ...   ...   ...   ..  ..  ..  ..  ..  ..  . . . . 
TABLE OF 
CONTENTS

EXCU SUMY 
. . .. i

INODUCTON . . . 
. . . . . . . . 1

FIINGS. . 
. . . . . . . . . . . . . . 3 
CONCLUSIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
. . . . . . . . . . . . . 8 
APPENIX A 
.............................................. A-

Findings and Recommendations of 
Selected Studies Related to the

Implementation of IEVS 
B............................................... 
APPENIX 
B-1 
Endnotes  INTRODUCTION
PUROS
The purposes of this study are to (1)  and reco=endations of
synthesize the fidings 
rent 
several  reports examing the implementation of Income and Eligibilty
Vericatin Systems (IEVS) by the States, and (2) offer conclusions for Federal 
offcials and others considerig future directions for IEVS. 
METHODOLOY
We analyed reports of 10 studies related to the implementation of IEVS by the
States. These reports have been issued since 1985 by the General Accounting Offce 
(GAO); the Offces of Inspector General (OIG) in the Deparment of Agrculture 
a(nd tAhe DepartPment oWf Health and AHuman S)ervc.es ( HH S); the Health Care 
Financing Administration (HcFA) and the Office 
of the Assistant Secretary for 
Management and Budget in HHS; and by the American Public Welfare Association
We supplemented this analysis with  durig site
discussions with State welfare offcials 

visits to thre  States, with Federal offcials associated with IEVS, and with staf from

the APWA.1

BACKGROUN
Since the mid-1980'  , the Federal government has required State agencies 
administering certain federaIly funded public assistance programs to operate an 
Income and Eligibilty Verication System. 
An IEVS is a matching system, usuaIly automated, involving Federal and State data 
bases. The States use IEVS to verify the accuracy of financial information provided 
to Famies 
by clients to the State public assistance agencies that administer the  Aid 
with Dependent Children (AFDC), the Medicaid, and the Food Stamps programs. 
These programs, respectively, are funded in part by the Admistration for Chidren 
and Famiies (ACF) and HCFA in HHS and the Food and Nutrition Servce (FNS) 
of the Deartment of Agriculture. 
The Congress mandated IEVS in the Deficit Reduction Act (DEFR) of 
1984 
(P.L. 96-369).2 This mandate was largely a response to a presidential commission 
which had concluded that the Federal and State governments had misspent more 
than $4 bilIon on inappropriate payments in these programs in 1982. In establishing IEVS, the Congress intended that it augment existing State verification systems 
through more comprehensive, systematic use of developing computer technology and 
computeried data bases. 
The purpose of IEVS is to reduce waste
, abuse, and costs in these three assistance 
programs that are jointly fuded by the Federal and State governents. The State 
agencies must match financial information received from both 
applicats and
recipients with fiancial inormation about them contaied in the data bases of the 
Social Security Administration (SSA), the Internal Revenue Servce (IRS), and 
certain State agencies. The IEVS provides States with fiancial inormation that 
may not have been reported by applicats and recipients of these 
programs. Thus
States can better identif those who are not eligible for public assistance or who 
receive incorrect benefit payments because their incomes or resources exceed 
aIIowable limits. 
The IEVS process tyicaIIy begins when a State agency receives financial information 
on an applicant--say, for AFDC--from a local welfare offce. The State agency 
forwards the information, often on computer tape, to the appropriate Federal or 
State agency for matching against particular financial information about the applicant 
contained in its computerized data base. In return, a computer tape containg the
relevant information is sent back to the State agency for foIIowup. That agency 
veri 
usuaIIy forwards the information to the local welfare offce for caseworkers to 
and to correct eligibility and benefi determinations as appropriate. 
In this report, which was requested by the President s Council on Integrty and 
Effciency, we provide a detailed summary of 10 recent studies related to IEVS. 
This summary appears as appendix A. In the text, we provide a synthesis of the 
studies' major findings and recommendations. We do not make recommendations 
because our own inquiry was brief and our focus was primariy an analysis of the 
existing studies. Instead, we offer conclusions for Federal offcials and others 
considering future directions for IEVS.  FINDINGS
st id 
rte 
Severl  major prble wi th State' imletin of IE. 
Al States have implemented IEVS, but several major problems have hidered their 
abilty to operate the system fuIly and effectively. The reports identif three tyes of
problems: deficiencies in the Federal data bases
, ineffciencies resulting from 
strigent or unclear Federal requirements, and the limited resources of State public
assistance agencies.

Information in the Federal data bases has been inaccurate, duplicative
untiely, or 
inaccessible. 
Eight of th 10 reports identified specific problems with the reliability of the Federal 
data bases Sometimes the information is inaccurate or inconsistent. Benefit 
amounts OF client identifiers such as Social Security numbers 
are incorrect, for
example. Or information from one Federal data base may 
disagree with information
from another. Approximately half of all States had experienced problems with 
unreliable data in the SSA and IRS data bases in 1988
, accordmg to the APWA 
report, the most recent survey of all the States about IEVS. A year later
, in 1989
60 percent of the States considered the SSA data unreliable, accordinR to the HHS 
GIG survey of welfare officials from all States about SSA'
s data exchange systems. 
verig 
Sometimes the information is too old to be useful in 
the current financial 
status of clents, or it duplicates more current information available from other 
sources. This is particularly the case with certain data from SSA'
s Beneficiary
Earnings EXchange Record (BEER) file, the data base on reported 
wages. These 
data in many respects duplicate more current information available from the State
agencies collecting wage information. Information on unearned income from the IRS
is also often too outdated to be useful, particularly for ongoing matches on recipients 
of these public assistance programs. 
Often, the Federal data are received by the States too late to be most useful--
during
the application process before any overpayments are made. This is the time when 
the potentil for savings is greatest. But the turnaround time for exchanging
information is lengthy. Delays result because the schedules for runng the 
matches 
can be infrquent. Also, agencies exchange information primariy through a physical 
exchange (If computer tapes rather than through direct electronic transfer. 
These problems limit the usefulness of Federal data to the States and reduce the 
efficiency of the verification process. They can cost the States considerable time and 
effort to deal with them. Inaccuracies, in particular, can be very difficult, if not  impossible, to correct. In some instances, States simply bypass the Federal data 
bases altogether. They seek information in other ways or do not perform all the 
required matches even though, by so doing, they may be out of compliance with 
Federal requirements. 
Finally, some Federal data are not now available for IEVS matchig, although many 
verig 
States would lie to use them for  fiancial inormation on clients. These 
data include other inormation from SSA, such as overpayments and direct deposit 
data, data on benefits from the Veterans Administration, and inormation on U.
savings bonds and on income for Federal Civi Servce 
employees. 
Federal requirements, in important respects, are highly prescriptive, or
unclear
, or inconsistent. 
The Federal requirements governing the matchig process are highly prescriptive and 
detailed. Agencies must match financial information from aI1 public assistance
applicants and recipients with particular information from specified Federal and State 
data bases. They must conduct these matches according to schedules mandated by 
Federal rules.3 They must complete 
foI1owup on the information received from the 
matches within 45 days in most instances. 
These requirements are so extensive and complex that many States were not 
complying with them all. The HCFA and FNS reviews of selected States
, in Fiscal 
Years 1987, 1988, and 1989, revealed that the requirements forperforrng 
aI1 
matches, for timely foI1owup, or for safeguarding the data from the IRS were most 
consistently troublesome. 
The States have had diffculty satisfyg other IEVS 
requirements because they have 
been unclear, particularly so in the case of requirements for data 
coI1ection and 
reporting and for targeting match information for foI1oWUp. 
The origial IEVS regulations
, published in 1986, required States to coI1ect and 
report data on actions taken and the savings realized from the IEVS matches. These 
requirements were very general. States were instructed not to develop their 
information systems until detailed instrctions were issued. But
, durig the period
covered by these reports, the Federal agencies (FNS, ACF, and HCFA) had not 
issued fial and specific instructions. Their absence presented problems for the 
States and Federal agencies. For exaple
, FNS, ACF, and HCFA have each 
required the States to submit cost-benefit data to justify their targeting of 
foI1owup
on IEVS matches. Yet the States lacked the detailed guidance for implementing the 
data coI1ection and reporting systems essential for producing performance data. 
Further, most States have not produced performance data that are comprehensive 
reliable, and reported uniformly. This lack of solid 
performance data liits the 
ability of Federal and State agencies to assess the costs and benefits of IEVS 
matches.  Finally, the lack of coordinated direction from the Federal agencies has created 
problems for State agencies. For example, the interim rules on targeting and cost-
benefit justications for IEVS were 
issued separately by the three Federal agencies--
FNS (1988), AcF (1988), and HCFA (1989). They contained somewhat 
dierent 
requirements even though they were all concerned with IEVS and were directed to a 
single agency in most States. 
Also, the Federal agencies have not developed guidelines that are uniorm for 
collecting and reporting data. Thus, as pointed out in the 199 GAO report the
potential exists for State public assistance agencies havig to develop separate
systems for collecting and reporting cost and benefit data 
on the IEVS matches. The 
FNS, ACF, and HCF A each require these data to satisfy the requirements of IEVS. 
But, as a result of the Computer Matching and Privacy Protection Act of 1988
, the
IRS and SSA have been requesting from these State agencies other performance 
data on IEVS matches because these agencies are using Federal data bases in their 
computer matching programs. 
The admiistrative capacity of many States to implement IEVS is 
lited by
insufcient staff and inadequate computer resources. 
Although many State public assistance agencies were verifyng client inormation 
prior to IEVS, the additional requirements of IEVS created a more rigorous 
extensive verification process. This process has burdened many States that have 
insuffcient staff and computer capability. 
The IEVS increased the workload of nearly all State public assistace agencies 
particularly for clerical staff and eligibility workers
, according to the APW A survey.
Nearly 80 percent of the States reported that they needed more staff to meet the 
demands of IEVS but that staffing levels had not increased. 
Inadequate computer capability has also hampered implementation of IEVS by the 
States. In establishing IEVS, the Federal government assumed that States were 
operating with extensive, sophisticated computer systems that would require little 
modification to accommodate an IEVS. This was not the 
case. In late 1986, at the
time when States were first required to have an IEVS in place
, only six reported to
GAO that their existing automated systems met the requirements for IEVS or would 
do so with only minimal modifications. 
for
Many States have continued to operate with inadequate or obsolete automated 
systems that limit their ability to implement IEVS fully and 
effectively. For instance 
agencies have had to rely on the mail  exchanging computer tapes, mark-sense
cards, and sometimes even paper forms. Only two States had begun to use the 
electronic transfer of data through a Wire Third Party Query 
system (WTY).  Moreover, followig up on match inormation is a 
largely manual process in most 
instances. The States may not have case information stored in automated data 
bases, or, even if they do, workers in local welfare offces frequently lack access to 
computer terminals. 
Finally, the inormation systems for keeping track of the disposition of IEVS matches 
may not be automated. Even if they are, they may not be sophisticated enough to 
provide the information necessary for determnig productive targeting strategies or
the costs and benefits of the overal IEVS 
process. 
The studies make no rec=endations concerng States' resurce but they do
addres Federa data bas and Federa requiments. 
The usefulness of the Federal data bases should be improved. 
The HHS OIG focused its attention on the SSA data bases in two reports. 
examined the BENDEX (Beneficiary and Earnings Data Exchange) system in 1985 
just prior to the implementation of IEVS in 1986.. At that time, OIG reco=ended
that SSA improve the accuracy, completeness
, and timeliness of the system, expand
the information it contained, and improve the agency s co=unications with State
welfare agencies. Four years later
, aftr a broader review of SSA's automated data 
exchange process, the OIG again directed similar 
recommendations to SSA. 
The APWA, summariing survey respones from 50 States
, echoed the OIG in callng
for improved reliability of Federal data and improved 
communications with State 
agencies. It outlined further steps for improving the usefulness of the Federal data. 
These included more timely response to State matching requests
, revised security
requirements for the IRS data, and greater access to other Federal data unavailable 
to the States for IEVS matches. 
Federal requirements of the States should be modified. One report 
caIls for 
them to be made more flexible; other reports urge that they be more specifc. 
Several reports urge they be better coordinated among the Federal 
agencies. 
The APW A, on behalf of the State public 
assistance agencies, urged a "sweeping
reform" of IEVS. It argued that increasing States' flexibilty in conducting IEVS
matches would enhance the cost-effectieness of the process. Further
, the APWA 
caIled for a "systematic review" of IEVS to assess the effectiveness of the present 
system and to determine whether it serves the purposes intended by Congress. It
offered numerous other recommendatians intended to relax those Federal 
requirements it considers too prescriptNe or unrealistic such as the time frames for 
followup on match information. 
The thrust of the recommendations in the FNS and HCF A reviews is very diferent 
from that of the APWA. Rather than urging greater flexibilty, these reports have  numerous roommendations that, in general, call for more specifc regulation for the 
system. ThCJ urged more detailed guidance to States; more comprehensive
, reliable 
performance data to document the savings and costs of IEVS; and more intensive 
1I 
monitoring  sanctionig of States not complyig with requirements. 
Several of t!& reports, both Federal and non-Federal, agreed on the need for
improved cOldination among the Federal agencies involved with IEVS. The HCFA, 
in its most nxnt program review issued in 1990, as well as GAO and APW A, have
urged that Faeral agencies develop more consistent regulations. The APW A argued
further that dr lack of Federal coordination is serious enough to warant the

a single Federal coordiator for IEVS or a 
designation  at  coordiator in each

agency.

in  vi 
In the thee Skte we  proble whih iF edl data bases Fed reqem
IE. 
and  resoures st appe to  efort to opete 
Although neany all the welfare offcials from the three States we visited thought 
IEVS had bee useful, many were experiencing problems with IEVS similar to those 
identified in the reports. 
The problenB with the Federal data bases mentioned most freql,ently were the age 
of the informion, particularly the IRS data, and the lack of access to other data 
that would be helpful. Problems with inaccurate or inconsistent data were also 
mentioned but somewhat less frequently. 
Several offcWs thought the Federal requirements for IEVS were too 
extensive and 
prescriptive. For instance, some commented on the limited usefulness of matching 
all applicants for assistance or of matching with particular data bases. Overall
, the
officials were about equaIly divided about the reasonableness of the 45-
day
requirement iJr foIlowup on match information. 
Senior offcial in two States spoke of the limits of computer 
capability in their
departments. They observed that Federal planners had assumed that the States were 
more automatd than they were and that the burden of IEVS could be "
automated 
away." Thesl: offcials noted, however, that some States stil have little automation. 
Others with Bore sophisticated systems have found their abilty to 
adapt their
systems for IEVS sometimes limited by budget problems
, technical complexities, and
other demandl on the agencies' resources. 
The Federal :aencies associated with IEVS have taken some steps to deal with these 
problems.6 Bit these observations from State offcials, which are based on their
recent experices, suggest that their efforts have not remedied the fundamental 
problems with the system.  CONCLUSIONS

The problems identifed in this report appear to be 
substantial enough to warrant
further examination of IEVS. Toward that end
, the Offce of Inspector General wil
undertake further study addressing the effectiveness of particular matches. In
addition, the Department of Health and Human Servces and the Department of 
Agrculture might weII consider a basic reexamination of IEVS. That 
reexamiation 
might address ways in which: 
the Federal governent could  carrg
give States more flexibilty in 
out IEVS matches and at the same time hold them more accountable 
for results; 
Federal data bases used in IEVS matches might be made more useful; 
and 
additional Federal data could be made available to States. 
The information supporting the fidings in this report is insuffcient to support 
definitive recommendation caIIing for a reform of IEVS. 
It is compellg enough
however, to raise serious questions about IEVS. 
These questions concern the
effectiveness of particular IEVS matches. They also concern the need for more 
fundamental reform and the directions it might take. 
Thus, the Offce of Inspector General wi undertake further 
inquiry into particular
aspects of current IEVS requirements. Also
, it would appear to be timely for the
Department of Health and Human Servces and the Department of Agrculture 
individuaIIy or coIIectively (perhaps through the President's Council on 
Integrty and
Effciency), to undertake a basic review of IEVS. 
If the signals identified in this report are correct
, such a broader review could
indicate that some major changes in course are 
necessary. Such changes might 
involve the scope and usefulness of the Federal data bases made available to the 
States. Even more signficantly, they might caII for a twofold approach that (1) 
gives
the States more discretion in how they go about implementing IEVS and (2) holds 
them more accountable for results through the use of various performance 
indicators.? The States and Federal agencies could work together to determe the
kid of indicators that might most appropriately be used to help assess performance.   1985
United States Deparment of Health and Human Servces, Offce of Inspector
General  The Beneficiary and Earninl.s Data Excham!e System: Its Use and 
Potential,  01-8600063, Washington, D.  , December 1985 
Backgun 
Ths inspection examied States' experiences with BENDEX and identifed problems 
and issues associated with the operation of the system. The inspection was based 
priariy on discussions with selected State and county offcials involved with 
BENDEX and with staf from the district offces of the 
Social Security 
Administration in 16 States. 
Major Fin&s: 
A number of problems (SSA and State) limit the usefuln 
ss of the BENDEX 
system: timeliness, completeness, and/or accuracy of the data and insuffcient 
communication between State agencies and SSA; 
State eligibility workers rely upon SSA district offices more than on 
BENDEX 
when verifyng information on SSA benefits; 
States find BENDEX useful primarily as a postcertification verification tool 
for recipients. It is of minimal usfulness durig the 
application process 
because the data are seldom received soon enough;

Nearly all States have little interes in BEER, the BENDEX tape on reported 
wages, because the information it contains is too old; and 
Many States are 
tryg to encourae greater use of BENDEX by local welfare
offices through (1) preparing and disseminating 
discrepancy reports, (2) 
reformatting SSA BENDEX data, and (3) sending the data to local offces
according to regular schedules.

Recommtins: 
Major 
The recommendations are directed to SSA: 
Improve the usefulness of BENDEX during the application process;  Ensure that BENDEX is working properly in providing States with accurate 
timely, and complete information; 
Exand the inormation contained in BENDEX based on a users' requiement
analysis undertaken by a Federal-State task force; 
Improve the techncal assistance provided to the States in using BENDEX; 
and 
Ensure that BENDEX is incorporated and operating 
effectively in the States
automated welfare management systems.  1987
United States General Accounting Offce  Welfare ElilribiItv--Deficit Reduction Act
Income Verification Issues. Fact Sheet for the Rankig Miority Member
Subcommittee on Oversight of Governent Management, Commttee on
Governental Afairs, United States Senate, GAOIH-87-79FS, May 1987
Backgund:
Ths Fact Sheet summaries data from a national survey of al States conducted by
GAO durig the summer of 1986 to determine progress and problems in the States
early efforts to implement IEVS.
Fin
Major 
The Fact Sheet identifies major concerns of the States with IEVS. These include:
Additional funding is needed to develop and operate the DEFR 
income
verification systems;
The efficiency of States' automated systems for processing data from IRS and
SSA is questionable;
The time frames required by Federal regulations for followig up on
information received from the Federal data bases are difcult to comply with;
The States' startup and operating costs to process and use tax data might
exceed the benefits in terms of doIlars saved;

The usefulness of Federal tax data might be limited by its age and other
considerations; and
Most States wiIl need to change systems in order to meet the safeguarding
requirements for Federal tax data.
Recommtins:
Major 
The Fact Sheet gives no recommendations.
A - 1987
Jack Martin & Co.  Evaluation of Income and Elilrbility Verification Systems. Final 
Report for the Offce of Assistant Secretary for Management and Budget, U.S. 
Deparment of Health and Human Servces, Contract No. 100860035 
September 15, 1987 
Backgund: 
Ths evaluation assessed IEVS implementation and operation in five States in late 
1986 and early 1987. The States--New Jersey, Oklahoma, Tennessee, Vermont, and 
Wisconsin--were selected because they were relatively advanced in implementing the 
systems and procedures required by IEVS. 
The objectives of the evaluation were to (1) document the status of IEVS, including
factors that facilitated or inhibited implementation; (2) assess the cost-effectiveness of 
the various matches using available State data; and (3) provide recommendations for 
conducting subsequent evaluations and for improving program performance. 
Fin 
Major 
The States have not fuUy implemented IEVS in terms of (1) executing 
required matches with aU the required data exchange sources and (2) 
reporting the results to local public assistance offces for disposition;

For those matches that have been implemented, the States have little 
information on program performance, i.  , outcomes and costs. Therefore, no 
assessment of the cost-effectiveness of the required matches is possible in 
these States; 
The limited available data and anecdotal information suggest that IEVS is 
important for reducing erroneous payments, deterrng clients from 
misreporting income, and boosting the confidence of eligibilty workers in their 
decisions; 
Anecdotal information from these States suggests that the substantial effort 
required by local public assistance offices to resolve match results creates the 
widespread perception among State and local office staff that IEVS is 
burdensome and not cost-effective despite its important benefits; and 
The effort and costs involved with IEVS are influenced by the number of 
A - matches conducted, the quality of th data received from the required 
matches, the volume of match infomation referred to local offces for 
disposition, and the procedures folled by the State and local offces in 
processing the inormation received 
Recommtins: 
Major 
The Federal and State governments should work together to develop measures

of program performance and mechaisms for coIlecting and reporting 
inormation on match outcomes;

The Federal government should exane the time standards imposed on the 
States for disposition of match inforation; 
A brief survey of all States should be conducted in order to determe the 
nature and extent of performance data available nationwide and to gather 
estimates of the time involved in cerain matching and processing 
activities; 
and 
Federal efforts to evaluate IEVS aDd to further its technical development 
should be supported through a task order mechanism.  1988
United States Deparent of Health and Human Servces, Health Care Financing 
FY 1987 Income and Eligibility Verification System CIE 
Admiistration, 
Effectiveness Review Report. 
April 1988 
Backgun 
Ths report summarid HCF A's review of the implementation of IEVS in the 
Medicaid program dnrig Fiscal Year 1987. The report was based on inormation 
(1) for all States, whih was summaried in compliance assessments and monthly 
reports prepared by me regional HCFA offices, and (2) for 20 States, which were 
selected for a special data coIlection initiative. 
Finfr: 
Major 
Performance data from the States on the costs and savings of IEVS are
extremely limed, and "a significant number" of States did not provide HCF A 
with all the peormance data it requested. However, HCF A reports 
estimated savigs in the Medicaid program of more than $20 mion for the 
six-month reviw period in 7 of the 20 States reviewed. Estimates of startup 
costs in 16 of 1Ie 20 States totaled less than $3 million; 
IEVS is fuIly Cferational for the Medicaid program in only 18 of 53 States 
and terrtories reviewed by HCF A; "virtuaIly all'' States have implemented 
IEVS to at least a minimal degree; 
Several factor5 limit more efficient operation of IEVS, including the foIlowig:
the failure of some States to match information from all categories of clients 
with all the rarired data sources; some Federal data being too old to be 
useful; technica problems with SSA and IRS, including the safeguarding 
requirements iJr the IRS data; and unreasonable time frames for following up 
on match infalation; and

In the absencc of regulations implementing OBRA 1986, many States are not
targeting follOip of IEVS match information to those areas likely to be most 
productive. 
A - Major Reommndtins: 
The recommendations are directed to HCFA: 
Assess further the available data to determne the potential for 
savings from 
IEVS; 
Publish as soon as possible regulations or guidelines on targeting match data 
for foIIowup; 
Resolve those operational and P9licy factors impeding the effcient operation 
of IEVS and clarify policy in wrting; and 
Examine the feasibilty of requiring data reporting in order to measure the 
costs and benefits of IEVS. 
A - 1989
United States Department of Health and Human Servces (ll
, Health Care Financing
Admistration  FY 1988 Income and Eligibiltv Verification Svstem 
Performance Review Report. 
February 1989 
Backgun 
Durig Fiscal Year 1988, HCF A reviewed the implementation of IEVS in the 
Medicaid programs of 18 States. The primary objectives of the review were to assess
compliance with IEVS requirements and the 
cost-effectiveness of the required 
matches. 
Finr;: 
Major 
The States identifed major concerns about IEVS
, including the short time 
frames required for processing match information
, the 1iited usefulness of 
some Federal data, the costs of IEVS relative to its benefits
, the costs of
changes required to meet safeguarding requirements for IRS data
, and the
lack of Federal instructions for recordkeeping and reporting; and 
Although States have made significant progress in implementing IEVS
, several
major compliance problems exist, such as States not conducting matches 
against all required data bases, not completing foIlowup on match information 
within the required time frames, and not coIlecting performance data for 
assessing the costs and benefits of IEVS matches. 
Recommtins: 
Major 
The recommendations are directed to HCF A: 
Issue guidelines and instructions to the States that clarify the requirements for 
recordkeeping and data reporting; 
Support an independent study of the costs and benefits of IEVS data matches 
that would include developing model targeting methodologies; and 
Evaluate the usefulness of the required data matches in order to recommend 
changes in legislation and/or regulations. 
A - 1989
United States Department of Health and Human Servces
, Offce of Inspector
General  ImDrovim! the Social Security Administration s Automated
Process. OAI-05-89-00820, Washigton, D.  , December 1989

Backgund: 
Ths study assessed experiences of State and local welfare offces with the data 
exchange systems of the Social Security Administration. State welfare offcials in all 
50 States and the District of Columbia were contacted as were local welfare offcials 
in 11 States.

Major Fin&r: 
Many welfare agencies consider SSA data questionable; 
Welfare offcials would like access to certain additional information through 
SSA data fies; and 
SSA's communications with State officials on da  a exchange issues need to 
improve. 
Reommtins: 
Major 
The recommendations are directed to SSA: 
Take steps to provide welfare agencies with information that is correct; 
Continue to expand the tyes of data provided to welfare agencies;

Establish a network with welfare agencies for ongoing 
communications; and 
Involve welfare agencies in resolvig problems and in long-range 
plang on
data exchange issues. 
A - 1989

American Public Welfare Association 
After Implementation: State  ence wi.!
the Income and EIi!!biItv Verification 
System (  Final Report
Washigton, D.  , April 1989 
Backgund: 
The National Council of State Human Servce Admistrators (NCSHSA) of the
American Public Welfare Association surveyed 50 States in 1988. The purpose of
the survey was to assess the implementation of IEVS and to identify problems that 
States were encountering in operating the system.
Fings: 
Major 
States think the concept of IEVS is useful, but they encounter major problems 
that limit the fuII implementation of its requirements. These problems 
include: 
Insuffcient tie for processing match information; 
liited staf available to handle the increased workload; 
Difficulties in meeting security requirements for IRS data; and 
Unreliability of several Federal data bases. 
Recommtins: 
Major 
IEVS matches should be optional, so that States can match against only those 
data sources that are reliable and cost-effective; 
If all IEVS matches are not made optional
, Federal statute and regulations 
should be changed as foIIows: 
The requirement for States to match against SSA's BEER data should 
be made optional; 
Regulations should be revised to permit targeting of match data for 
applicants as weIl as for recipients; 
A - Requirements for States to have sytems for tracking the 
processing of 
matches should allow States more flexibility; 
inte 
The requirement for States to  matches durig the application 
period should be optional; 
The requirement that States follow up on matches within 45 days 
should be dropped; and 
The requirement for States to develop standard computer matchig 
formats should be made optional. 
Federal agencies involved with IEVS should take the 
followig nonregulatory 
actions: 
Improve the reliabilty of the Federal data, provide more timely 
response to State match requests, revise security requirements for the 
IRS data, provide States with acces to other Federal data and with 
more advanced notice of softare changes in Federal data files, and 
promote on-line computerized data exchange systems such as the Wire 
Thrd Part Query system being developed by SSA; 
Improve interagency coordination though such actions as development 
of uniform regulations and appointment of Federal coordinators for 
IEVS; 
Revise the guidelines for the Federal Quality Control review process to 
clarify use of case data; and 
Undertake a thorough review of IEVS to determine whether or not 
current agency requirements are cosistent with the goals envisioned

for the system by Congress.

A -
 1990
United States Department of Health and Human Servces
, Health Care Financing 
and..ity 
Administration,  Fiscal Year (FI l  ncome  Veri..on System 
(IEVS)  ormance  ReDort. March 1990 
Backgun 
Durig Fiscal Year 1989, HCFA reviewed the operation of IEVS in the Medicaid 
program of 17 States. 
Fings: 
Major 
States continue to make signifcant progress in implementing IEVS but are not 
strictly adherig to the Federal regulations or not documenting compliance. 
SpecifcaIly, States are not matching information on applicants against all 
required data sources, are not developing targeting plans for all IEVS match 
data, are not meeting required time frames for foIlowig up on matches
, and
are not establishing recordkeeping and data management systems suffcient for 
reviewing the effectiveness of IEVS; 
The States' major concerns with implementation are: 
Required time frames for processing match information; 
Usefulness and duplication of Federal data;
Costs of IEVS relative to the benefits;
Costs of complying with IRS requirements for safeguarding data;
Lack of Federal instructions for recordkeeping and reporting; and
Lack of coordination among Federal agencies.
Recommtins: 
Major 
The recommendations are directed to HCFA: 
Encourage coordination among Federal agencies in addressing IEVS problems 
A - through continued participation in the 
interency work group; 
so that States have time to 
Delay further State evaluations until FY  199 
comply with new requirements for recordkeing and reporting and to review 
the effectiveness of the matches; and 
Emphasize the importance of targeting and dissemiate inormation on best 
practices based on States' experiences. 
A - 1990
United States General Accounting Offce 
Computer Matching--Need for Guidelines 
on Data CoIlection and AnaIvsis, Report to the Director, Offce of Management and
Budget, GAOIHD-90- , Washington, D.C., Apri 1990 
Backgund: 
Ths review focused on the States' data coIlection and reportg systems for
evaluating the cost-effectiveness of IEVS. The objectives were to determe if these 
systems allow Federal and State offcials to assess whether IEVS is 
savig money,
whether they provide State offcials with sound information for targeting foIlowup 
activity on match information, and whether the IEVS data coIlection requirements 
conform with those of the Computer Matching and Privacy Protection Act of 1988 
(P.L. tOO-503). 
Finr;: 
Major 
As of February 1990, none of the Federal agencies (FNS, ACF, and HcFA)
had issued final guidelines to the States on data collecting and reporting for 
the IEVS program. As a result, data have not been available to assess the 
savings resulting from IEVS, to develop informed targeting strategies for 
foIlowup on match information, and to provide the cost-
benefit analyses
required; 
Regulations governing cost-effectiveness analyses were issued separately by the 
FNS, ACF, and HCFA and contained varyg requirements; and 
Requirements for data coIlection and reporting under IEVS need to be 
consistent with those required by the Computer Matching Act. 
Recommtins: 
Major 
The Offce of Management and Budget should work with FNS
, ACF, and
HCFA to develop uniorm 
guidelines for data collection and reporting that
wiIl satisfy IEVS requiements and those of the Computer Matching and 
Privacy Protection Act of 1988.
 1990

United States Department of Agrculture, Offce of Inector General 
Food Stamp 
Pro!!am--ImDlementation of Income and Eligibilty 
Vercation System Nationwide. 
Food and Nutrition Servce, Audit Report 27013-45-Te, OIG Southwest Region 
Temple, Texas, March 1990 
Backgund: 
Ths report summaried a review of the implementation of IEVS in the Food Stamp 
program during Fiscal Years 1987 and 1988. The scope of this review included 
program operations in 33 States and a U.S. Terrtory as weII as the admistration of 
the program by 5 regional offces of the Food and Nutrtion Servce. 
Finfr: 
Major 
Several States are not in fuII compliance with IES requirements. Some are 
not conducting the required matches, and those that are fail to follow up on 
match information within the required time frames; 
State agencies are using various methods and approaches for targeting 
foIIowup in the absence of final Federal regulations; and 
A few States are obtaining useful financial information from Federal sources 
other than those required. 
Major Recommndtins: 
The reco=endations are directed to the Administrator, FNS: 
Require FNS regional offces to strengthen effort to ensure State 
compliance 
by foIIowig up and enforcing sanctions; 
Determine what, if any, additional measures are needed to ensure that States 
comply with the required time frame for foIIowu on match information; 
Provide States with wrtten guidelines on targeting that defines uniorm liits 
or the elements to be included in the States' plans for targeting; and 
Require regional offces to review States' targeting plans. 
A -
 APPENDIX B 
ENNOTE 
In addition to analyzing the 10 reports summaried in appendix A, we 
reviewed other documents pertinent to IEVS. These included statutes 
regulations, guidelines, and agency correspondence. We discussed IEVS with 
- staff from the APWA and with State offcials durig site visits to three States 
(Massachusetts, New Jersey, and Pennsylvania) and through telephone 
conversations with offcials from several other States. Finally, we talked with
offcials from the major Federal agencies involved with IEVS. They included
the Office of Management and Budget; the Department of Labor; the Internal 
Revenue Servce and the Social Security Administration, which maintain the 
data bases involved in IEVS matching; and the Food and Nutrition Servce 
of the Department of Agrculture, the Administration for Children and 
Families and the Health Care Financing Administration in HHS, the three
Federal agencies responsible for administering, respectively, the Food Stamps 
AFDC, and Medicaid programs. . 
DEFR 
also included as part of IEVS the Unemployment Compensation 
program of the Department of Labor. This program is not a needs-
based 
public assistance program like the other three programs. 
Therefore it 
operates as a source of information for IEVS rather than a user of 
information. 
The Federal rules require that financial information from applicants 
and 
recipients be matched with: 
Unemployment insurance benefit (UIB) information from the State 
agency administering the State s unemployment compensation law. 
Applicants are to be matched during the application period and at least 
monthly during the foIIowing three months. Recipients reporting a loss 
of employment must be matched at the point of that loss and at least 
monthly during the foIIowing three months. Applicants and recipients 
receivig unemployment benefits must be matched monthly until such 
benefits are exhausted. 
State wage and benefit data from the State Wage Information 
CoIIection Agency (SWICA). Applicants are to be matched 
durig the 
application period and recipients to be matched quarterly.  IR. 
Unearned income information from the  States must request 
information during the application proces and at least yearly for 
recipients. 
Wage, benefit A fies: BENDEX, the 
, and other data from the 
Beneficiary and Earnings Data Exchange System; BEER; and SDX, the 
State Data Exchange on Supplemental Serity Income (SSI) benefits.
States must request inormation for appIints and for 
recipients for 
whom such information has not been prevusly requested. 
Social Security numbers of both applicants and recipients must be 
NUENT, 
veried through SSA fies, including  or Enumeration, or
Third Part Query (TQY systems). 
The time standard for foIlowup on match informtion was revised from 30 
days to 45 days in the regulations amending IEVS after the Omnibus Budget 
Reconciliation Act (OBRA) of 1986. Nearly thre-fourths of the States were 
having difficulty complyig with the 45-day standmd for foIlowup in 1988 
according to the APW A. 
The foIlowup process can be very time consuming. 
It involves comparing the information received frm the matchig process 
against individual case files, seeking additional iDormation to resolve 
discrepancies, determining whether eligibilty or benefit payments are affected 
recording the determinations in the case fies, and notifyg the clients of any 
intended adverse actions. 
Targeting refers to screening strategies for foIlowig up on only the match 
information most likely to identify and prevent ineligIoilty and incorrect 
payments. The OBRA 1986 legislation amended IEVS requirements to allow 
States to target rather than to foIlow up on all match information. 
The Federal agencies associated with IEVS have: 
Issued final regulations implementing the targeting provision of OBRA 
1986. They were issued by HCFA in early 1990 and by ACF in early 
1991. However, they contain requirements that difer somewhat with 
each other, that vary significantly from the FNS interim rules issued in 
1988, and that continue to differ with those for cost and benefit data of 
the Computer Matching Act. 
Established an interagency work group composed of representatives 
from FNS, ACF, and HCFA and two State. Since late 1989, this 
group has been a forum for discussing issues and a mechanism for 
encouraging coordination among the participating Federal agencies. 
However, the group lacks legal authority to make decisions binding the 
agencies and thus has limited power to effct significant change.  Afording States more flexibilty in operating IEVS would be in accord with 
the President s Executive Order No. 12612, entitled "Federalism," dated 
October 26, 1987. This Executive Order detailed the President's priciples for
maxing States
' discretion in administering national policies.