IMP LEMENTATION OF THE STATE


LEGALIZATION IMPACT ASSISTANCE


GRANTS UNDER THE IMMIGRATION


REFORM AND CONTROL ACT OF 1986


DISTRICT OF COLUMBIA 

Richard P. Kusrow 

INSPECTOR GENERAL 

OAI.07-800 OCTOBER 1989 
EXECUTIVE SUMMARY 

PURPOSE 

The purse of ths inspetion was to determe how effectively the Distrct of Columbia 

implemented the State Legalzation Impact Assistace Grts (SLIAG) prgr, to identiy 

potenti problems early in the proess, and to identi goo practices which al States could 

shar. 

BACKGROUND 

The SUAG progr was established under the Imgrtion Reform and Contrl Act (!CA) 

of 1986 to reuce the fiancial burn of providig public assistace, public health assistace, 

and educational servces to eligible legal alens. In Fiscal Year (F 1988, $928. mion 

in progr fuds wer alocated to States, and fuds wi contiue to be alocate thugh FY 

1991. These fuds also cover adstrtive costs for implementig SLIAG at the State and 

local levels. Payments ar ma for public assistace activities generay avaible to al 

neey individuals and public health assistace servces offer under the States' public health 

prgrs. The paymnts also cover educational servces designed to assist eligible legalze 

alens to att a satisfactory level of performce in school and to achieve English language 

proficiency and citizenship skis necssar to beome perment residents. The Famy 

Support Admstrtion (FSA) is responsible for adsterig the progr. 

Because SUAG establishes a new prgr, FSA real that problems would surace early 

in its implementation. In adtion to the normal diculties encountere in cratig new 

proesses and predurs, FSA reognze that SLIAG would have unque problems. Some 

of these issues include the diversity of progr which SUAG encompasses, cultual and 

language barer assoiate with the servce population, matag confdentialty of

inortion, and the extrmely short ti fres for the grt awar proess. 

METHODOLOGY 

In respnse to the anticipate diculties with implementig SLIAG, FSA reueste that the 

Ofce of Insptor Genera (OIG) conduct reviews in 10 States to determe the progrss of 

States ' implementig ths progr The FSA selecte nie States and the Distrct of Columbia 

beause of the varety of prgr they offere the number of eligible legalize alens in the 

population, or the amount of the grt. The nie States ar Arzona, Caorna, Colorao, 

Florda Ilois, Masachusett, New York, Texas, and Washington. 

Intervews based on strctu discussion guides for each major progr ara, as well as 

umentation fushed by FSA and State and local offcias, built the base of inormation for 

this report. Ths report represents the review conducte in the Distrct of Columbia and 

reports on its implementation of the SLIAG progr as of August 1988. 
Both FSA and the Ditrct of Columbia were commtt to identig problems and 

developing inovative and effective solutions for them. Imedately followig our on-site 

visits, FSA was given an outle of the State concerns identied in th report The FSA and 

the Distrct of Columbia have alady intiate action on some of the fidigs and 

reommendations. 

FINDING: Since 1987, FSA ha held national conferences and issued informtion to States 

on imlementing the SUAG program. 

The FSA held severa national conferences begig in 1987 to shar 

inortion with the States on SLIAG legilation, the implications for States, the 

application prss, and the doumentation of costs. 

The FSA also prvide States with "Question and Answer" issuances and 

demogrphic data frm the Imgrtion and Natuzation Servce. 

FINDING: The District ofColwnia established a strtue to identify organizational and 

program needs. 

The Distrct of Columbia Deparent of Hum Servces established a 

Multi-National Eligibilty Unit to determe eligibilty for al noncitizen 

applicants for Aid to Fames with Dependent Chidrn, Genera Assistace, 

Medcaid, and Medcal Charties. Th process is crtical for accurte and 

aduate delivery of servces, and proper application of policy. 

The Executive Dirctor of the Office on Latio Afai is the single point of 

contat for the Ditrct of Columbia. The Ditor of the Office on Latio 

Afai is a cabinet-level position. The placment of the sigle point of contat 

with ths offce ensurd high visibilty for ths prgr which is relatively 

sma in most States and could be lost among the larger progrs adstere 

by the larger agencies. 

Base on curnt registrtion inormation, a large number of eligible legalize 

alen students ar ilterate, which causes problems for plang purses. The

Distrct of Columbia crated a new progr caled Amesty Orentation which 

adsses literay and citizenship skis simultaeously. 
FINDING: The District of Columia also took immdiate steps to document exenditues 

and control disbursements. 

A discrete identier cod has been develope which identies a persn as an 

eligible legalze alen. Th number also contaed a th-digit progr code 

for Medicaid which distigushes eligible legalze alens parcipatig in ths 

prgr frm other tys of reipients. These mior modcations to the 

existig computer system alows for accurte identication and documentation 

of individual eligible legalze alens reeivig any ty of income maitenance 

assistace. 

Intr-Distrct agrments establish "buyer" and "seller" relationships between ce Distrct of Columbia agencies. The buyer is the agency using the servce 

whie the seller is the one providig the sece. Unde the agrments, money 

is not actualy trsferr to the provider, insted the agrments give the provider budget authority. The provider must incur costs and submit vouchers 

to clai reimburement. Ths proess gives the grtee agency much more 

control over the SLIAG funds than in other States wher the grtee agency simply trsfers cash to other agencies for SUAG activities. Ths system 

contas a buit-in, ongoing control proess. 

Drwdown of Federa fuds is used to reimbur the Distrct of Columbia 

goverent for expenditus. There ar no cash balances beause money must 

be expende before reimburment can be reuested. 

Nevereless, there ar some funds contrl vuerabilties. 

FINDING: The FSA's definition of public assistance includes some public health activities 

which created adinistratve and service delivery problems for the Distrct of Columia 

public health agencies. 

FINDING: The District of Columia Commssion on Public Health and the District of 

Colwnia Public School System ha not estalished methods to identfy and validate costs for 

services and benefits to individual eligible legalized aliens. Without this documentation, the 

Distrct of Columia cannot be reimbursed for the fu exended. 

FINDING: The FSA applicatin review process created a numer of signifcant problems for 

the Distrct of Columia. Also, the FSA's application review process interfered with the 

Distrct s abilty to plan for services. 
Delay in FSA issuig the implementig reguation resulted in the Distrct of 

Columbia s inabilty to properly plan for SUAG. 

Numerous policy misinterpretations and disagrments resulte beause FSA 

did not provide defmitive wrtten instrctions to assist the Distrct of Columbia 

in understadig SUAG application reuiments. 

The tie fres were to shor for submittg the intial SLIAG application, 

FSA review and comment, and revisions of the application. 

Implementig SLIAG-funde progr was delayed beause of a signcant 

delay in notig the Distrct of Columbia of the grt award. 

No for appeal proess exits if progrs or costs ar denied in the fit level review. 

FINDING: At the time of the insectin, the District of Columia ha onl informl 

guidelines from FSA on determning an claming SUAG adnistrative costs, and the 

Distrct of Columia ha not developed methods for determning and documntng these costs. 

As mentioned earlier, FSA and the Distrct of Columbia have alady intiate action on some 

of the reommndations ma in this report. Steps have ben taen by FSA to provide States 

with mor spc, form guidelies for identig and doumentig actual progr and adtrtive costs. However, adtional actions ar necessar in other aras on the par of 

FSA and the Distrct of Columbia. 

RECOMMENDATION: The FSA shoul reconsider its position to clasif certain public 

health services as public assistance and ma appropriate adjustments to thi position. 

RECOMMENDATION: The District of Columia should ensure tha its Commsion on 

Public Health and Public School System deelop a method to identify and validate costs for 

services and benefits to individual eligible legalized aliens. 

RECOMMENDATION: The FSA should ma its application and grant process more 

orderly; Specifcally, FSA should 

provide defitive wrtten instrctions on the SLIAG application reuiments 

and establish a dialogue with the Distrct of Columbia on SLIAG policy, 

compliance, and reportg issues to minie the confusion that occur in the 

intial application process;


ensure that suffcient time is alotted to the application process includig: the 

Distrct of Columbia s initial application, FSA' s review and formal comment, 
. . . .

the Distrct of Columbia s considetion of FSA comments and negotiation of 

disputes, and its submission of the revise application for FSA approval; 

develop an appeals process to use if progr or costs associated with providig 

servces ar denied in the intial application process; and 

revise the grt award proess for approved applications so that the notice of 

grt award reaches the Distrct of Columbia prior to the begig of the fiscal 

year. 

RECOMMENDATION: The FSA should issue wrttn gudelies for determg and 

claig SLIAG adstrtive costs. Also, the Distrct of Columbia should develop method 

for determg and documentig these costs. 

COMMENTS 

The FSA and the Distrct of Columbia both commente on the dr report They generay agr with our fidigs and reommndations. Both reported havig taen steps to improve implementig SUAG. Their comments ar include verbati 
... ..................... .... .................................. .......................... ... ............ ..... ........ .... ....... ... ........................ 

TABLE OF CONTENTS 

EXECUTIVE SUMMARY 

I NTR 0 D U CTIO N ................................................................................ ...................... 1


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


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


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


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


Mental Health ..... 
 .......................................................... 1 


Ed ucation .... .... 12


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


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


APPENDICES 

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


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


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


PURPOSE 

The Famy Support Admstrtion (FSA) reuested that the Ofce of Insptor General 

(OIG) conduct an insption in nie States and the Distrct of Columbia to determe how 

effectively the States implemente the State Legalzation Impact Assistace Grts (SLIAG) 

progr awarde under the Imgrtion Reform and Contrl Act (ICA) of 1986. The 

insption included reviewig mehansms in place to identi these funds and determing 

whether prsent or prjecte policies and predurs adere to FSA gudelies. The FSA alo 

was intereste in identig potential prblems ealy in the process and any goo practices 

which al States could shar. Ths repo prsents the results of the inspetion pertg to the 

Distrct of Columbia. 

BACKGROUND 

Under IRCA, eligible legal alens may apply for perment residency with a 1-year 

period afr they fIrst beome eligible (Le., by the 31st month afr they reeive tempora 

resident status). 

Th new popultion wi incrase the demad for State public assistace and public health 

assistace seces signcantly. It wi also incras the demand for State educational 

servces as these new residents S. obta English language and civic skis nee to beome citizens. 

To help States defry may of the costs of providig public assistace, public health 

assistace, and educational seces to eligible legalze alens, IRCA authorize $1 bilon 

each year from Fiscal Year (FY) 1988 thugh 1991 for SUAG grts, less an amount 

identied as the ''Federa offset." With few exceptions, eligible legalze alens ar ineligible 

for fedy fude public assistace progrs such as Aid to Fames with Dependent 

Chidrn (AFC), foo staps, and Medcaid The ''Fedra offset" is the estited cost to 

the Fedra Governent of providig these servces or benefits to those few legaliz alens 

who ar eligible for them. In FY 1988, the law alocate $928. mion to States. 

To reeive SLIAG fuds, States must apply to the FSA Division of State Legalation 

Assistace, which is respnsible for approvig applications and adstering the program. 

The application must be approved in tota for a State to reive any SUAG funds. The FSA 

also provides States with tehnical assistace on policy issues and on the methods used to 

estimate costs and veriy actual costs. 
The basic reuiment for States to clai reimburement is that costs must be alowable, 

reasonable, and alocable. State public assistace and public health assistace progr must 

be the same ones avaiable to the gener public. States canot crate new program in these aras speifcaly for eligible legal alens. However, States may crate new or adtional 

education progr for the eligible legalze alen popultion. States may alo clai 

reimburment for progr adstrtive and SUAG adtrtive costs. 

Reimburement for public assistace and public health assistace is lite only to the amount 

of State and local fuds expende for SLIAG-related costs. The maum SLIAG 

reimburment for educational servces is an average of $500 per year per eligible legalze alen. Determg progr adnistrtive costs is mad in accordce with the fmal 

regution at 45 CF 402.22. 

The FSA is responsible for adsterig the prgr Because SUAG was a new program, 

FSA real that prblems would surac early in its imlementation. In adtion to the nor diculties encounte in cratig new processes and predurs, FSA reogn that SLIAG would have unque problems. Some of these issues include the diversity of 

progr which SUAG encompasses, cultual and language barers associated with the 

sece population, matag confdentity of inormation, and the extrmely short tie fres for the grt award process. 

METHODOLOGY 

The FSA selecte nie States and the Ditrct of Columbia for the inspetion beause of the 

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

amount of the grt. The nine States ar Arona, Caifornia, Colorao, Florida, ilinois, 

Massachusett, New York, Texas, and Washington. This repo reviews the Distrct of 

Columbia s implementation of the SUAG progr as of August 1988. 

Pror to conductig the inspetion, the OIG develope strctu discussion gudes for each 

major progr activity at the State and local levels. In conductig ths review intervews 

were held with offcials from the Ofce on Latio Afai; the Ofces of the Ditor and the 

Controller of the Deparnt of Hum Serces; the Commssions on Social Servces, Public 

Health, and Menta Health; and the Distrct of Columbia Pulic School System. In adtion 

intervews were conducte at the local level of public assistace, menta health, and education. 
DISTRICT OF COLUMBIA'S ORGANIZATIONAL STRUCTURE 

Each State designate a single point of contat to adte and coordate the SLIAG 

progr. For the Distrct of Columbia, the contact is the Executive Dirtor of the Offce on 

Latio Afai. 

The grte agency is the Deparent of Human Servces which is responsible for the 

drwdown of Fedra fuds, disburment of these fuds to the Distrct of Columbia agencies

provig SLIAG-relate serces, and repog expenditus to FSA. The Prgr Maager 

respnsible for the day-to-day operation of the SUAG progr is locate in the Deparnt 

of Hum Servces, Ofce of Speal Prgr and Servces. The Deparent of Human 

Serces also houses the Commssion on Socal Serces that prvides public assistace 

servces, the Commssion on Public Health which fushes public heath assistace servces, 

and the Commsion on Menta Heath that is respnsible for menta heath servces. 

Educational servces ar prvide by the Distrct of Columbia Public School System.

Cuntly, the Boar of Education is considere the State education agency. Al agencies 

below the Boar of Education, includig the Superitendent, mae up the local education 

agency. The Diviion of Adult and Car Education, Adult and Communty Education 

Brach, is respnsible for SUAG education progr and seces. The brach has nam a coordator who 
 administe the SLIAG progr, and works with the single point of contact 

and the Prgr Maager to ensur that systems ar in pla to identi eligible legalze 

alens parcipatig in the varous progr and that fiancial accountig systems 

moded to identi SUAG costs. The coordator also works with the two priar distrct 

facties prvidig adult education to evaluate the kids of progr nee for eligible legal alens and the resoures reuir to conduct these progrs. 
FINDINGS AND RECOMMENDATIONS


Both FSA and the Distrct of Columbia were commtted to identig problems and 

developing inovative and effective solutions for them. Imately followig our on-site 

visits, FSA was given an outle of the State concerns identied in ths report The FSA and 

the Distrct of Columbia have alady intiated action on some of the fidigs and 

reommendations. 

FINDING: Since 1987, FSA ha held naona conferences an issued informtion to States 

on imlementng the SUAG program. 

The FSA held sever national conferences beginng in 1987 to shar 

inortion with States on SLIAG legislation, the implications for States, the 

application pross, and the documentation of costs. 

The FSA also prvide States with "Question and Answer" issuances and 

demogrphic data frm the Imgrtion and Natuzation Servce (IS). 

FINDING: The District of Columia established a strtue to identfy organizational and 

program needs. 

The Distrct of Columbia Deparent of Hum Servces establihed a 

Multi-National Eligibilty Unit to determe eligibilty for al noncitin 

applicants for AFC, Gener Assistace, Medcaid, and Medcal Charties.

Th press is crtical for accurte and aduate delivery of servces, and proper 

application of policy. 

The Executive Dictor of the Office on Latio Affai is the single point of 

contat for the Ditrct of Columbia. The Ditor of the Ofce on Latio 

Afai is a cabinet-level position. The placment of the single point of contact

witl this offce ensurd high visibilty for ths prgr which is relatively 

smal in most States and could be lost among the lager progrs adstered 

by the larger agencies. 

Based on curnt registrtion information, a large number of eligible legalzed 

alen students are iliterate, which causes problems for plang purses. The

Distrct of Columbia crated a new progr caled Amesty Orentation which 

adsses literay and citizenship skils simultaeously. 
FINDING: The Distrct of Columia also took immdiate steps to documnt exenditures 

and contol disbursement. 

A discrete identier cod has been develope which identies a persn as an 

eligible legalze alen. Ths number also contaed a th-digit progr code 

for Medcaid which distiguishes eligible legalze alens parcipatig in this 

prgr frm other tys of reipients. These mior modcations to the 

existig computer system alows for accurte identication and documentation 

of individual eligible legalze alens reeivig any ty of income matenance 

assistace. 

Intr-Distrct agrments establish "buyer" and "seller" relationships between

ce Distrct of Columbia agencies. The buyer is the agency using the servce 

whie the seller is the one providing the sece. Unde the agrments, money 

is not actualy trsferr to the provider of servces. Instead the agrments 

give the provider budget authority. The provider must incur costs and submit 

vouchers to clai reimburment. This proess gives the grte agency much 

mor contrl over the SLIAG funds than in other States where the grtee agency simply trsfers cash to other agencies for SLIAG activities. 

system contas a buit-in, ongoing contrl proess. 

Drwdown of Feder fuds is used to reimbur the Distrct of Columbia governnt for 

expenditus. Ther ar no cash balances beause money must be expende before 

reimburement can be reueste 

Neverteless, there ar some fuds contrl vuerabilties. 

Findigs and reommendations concerng these vulnerabilties follow under major topic 

aras. Findigs and reommendations which afect more than one assistace progr are 

discussed in the Crsscuttng Issues section of ths repo 

PUBLIC ASSISTANCE 

Assitance or Serve Activities 

The Distrct of Columbia offers a number of public assistace programs and servces to its 

residents. To be eligible for these servces, an individual must be a Distrct of Columbia 

resident There ar no U.S. citizenship reuiments for these progr. In fact, a Mayor 

Executive Orr prohibits agencies frm askig questions about legal status uness that 
g;, 

inortion is necessar for determg eligibilty for a Federa progr; e. AFC, 

Medcaid, etc. 

The major progr afecte by SUAG ar Medcai Genera Public Assistace to 

Unemployables, Genera Public Assistace for Chdrn, Medcal Charties, and Emergency 

Assistace. Also, there ar six prgr that adtrtively ar public or menta health, but 

for purses of SUAG reimburment were approved by FSA as public assistace. These 

progr ar Clcal Heath, Maternal and Chid Health, Alcohol Treatmnt, Drg Treatment, 

Denta Servces, and the Multicultu Serces Division. (Te impact of th distiction on 

the public health agencies is dicusse in the Public Health Assistace and Menta Health 

setions.) The Distrct of Columbia General Hospita also is considere a public assistace 

sece for purses of SLIG reimburment. 

The Income Maitenance Admtrtion has 12 dentr offces thughout the Distrct 

of Columbia. Individuals can apply for most income matenance progr at any of these 

locations. To eas adstrtive problems assoate with identiyig individual eligible legal alens and to simpliy sta trg, a Multi-National Eligibilty Unit was established 

to determe eligibilty of al noncitizen applicants for AFC, General Assistace, Medcaid, 

and Medcal Charties. Ths unit alo completes al reetermations for contiuing eligibilty 

for these progrs for the noncitizen population. 

The Distrct of Columbia offcials th that centr intae for ths popultion is crtical 

for accurte and aduate delivery of seces and proper application of policy. The persons 

in ths unt have ben spcaly tred on the spial eligibilty issues related to eligible legal alens, persons grte citizenship under color of law, and peons eligible for 

assistace under the Ombus Budget Reconciation Act of 1986. 

Documentn of Eligible Legalizd Alien Stats 

The singie point of contact and the Income Matenance Admtrtion ar emphasizig the 

importce of identig individuals as eligible legalze alens at the tie the application is 

taen for benefits or servces. Questions ar asked in a nonthatenig way, and it is 

explaied that answers wi not afect eligibilty for the prgr nor be used by the INS to 

deport them or other members of the household. There is a question on the application which 

asks if the individual is a U.S. citizen. If the answer is no, the person is referr to the 

Multi-National Unit. If the peon is an eligible legalze alen, a copy of the alen 

registrtion car (1-688, Tempra Resident Ca or 1-688A, Employment Authorzation 

Cad) is mad for the case reord 

Program Costs 

As mentioned previously, a discte identification number identies an individual as an 

eligible legalze alen. The 11 th digit of the Distrct of Columbia identication number is 
coded "5" if the individual is an eligible legalzed alen. Ths number alo contas a th-digit progr cod for Medcaid which distigushes eligible legal alens 

parcipatig in ths prgr frm other reipients. Imlementig these identication 

numbers reuied only mior modcations to the exitig computer system whie alowig 

for accurte identication of individual eligible legalze alens reeivig any tye of income

matenance assistace. Use of these identication numbers also wi assist public and menta 

health progr that must identiy individual eligible legal alens to document costs, since 

may of these patients use Medcaid or Medcal Charties to pay for the servces. 

Administratve Costs


The Distrct of Columbia used 20 pent of the tota SLIAG prgr costs to estite their 

tota SUAG adtrtive costs for FY 1988 and FY 1989. The FSA approved the use of 

ths 20 percent to estite these costs. However, FSA indicated that ths approval was not a 

lie-item apprval and that the Distrct of Columbia would have to veri actual SUAG adtrtive costs when claig reimburement. The FSA has not defmed alowable 

SUAG admini strtive activities nor has FSA issued gudelies for documentig these costs. 

The Distrct of Columbia is concered that without any crteria to follow, any method they use 

may be questioned in an audit situation. Method for deterg the actual amount of the 

SUAG adstrtive costs in the afecte agencies had not ben develope at the tie of the 

review. To estiate progr adstrtive costs in the intial FY 1988 application 

percentages were use for each of the progr areas (17 percent for public assistace, 8 

percent for public health, etc.). The FSA approved these computations. When the FY 1988 

updte was submitt FSA indicated that there were problems with the percentages use in 

the intial application, the updte, and the FY 1989 application. The computations were 

realculate and the Distrct of Columbia submitted actual dollar figus for the progr admstrtive costs for 

FY 1988. Whe the Distrct of Columbia is more comfortble with the revised figus, there 

is concern with documntation of these costs for audit purses, espially for agencies like 

public health that ar not accustomed to tie studies and cost reimburment progrs. 

adtion, the Distrct of Columbia is concerned that FSA initialy approved their methodology 

and later disapproved it retroactively. 

Qrawdown of Funds and Cash Balances 

The Deparent of Human Serces, Ofce of the Contrller drws down Federal fuds, 

usually once each quarr, to reimbur the Distrct of Columbia governnt for expenditus. 

re ar no cash balances beause money must be expended before reimburment can 

reuested. The accountig system has ben moded to include a fundig soure code for 

SLIAG and program codes to identiy the program incung SLIAG expenses. 
The Commssions in the Deparent of Huma Servces wi be given budget authority to 

obligate a speifc amount frm the SLIAG fund. Prgr agencies wi submit vouchers 

monthy to the Controller s Ofce for reimburment. The vouchers provide inormation on 

the amount of money obligate for each progr and frm each fudig soure. 

Because the Ofce on Latio Afai and the Ditrct of Columbia Public School System 

not par of the Deparnt of Hum Servces, intr-Distrct agrments must be prepar 

trsfer funds frm the Deparent of Human Servces to these two agencies. Under the 

agrments, the seller (the Ofce on Latio Afai or the Distrt of Columbia Public School 

System) must incur costs and submit vouchers to clai reimburment. The Deparnt of Hum Servces Prgr Maager must approve the invoices before the Contrller s Ofce 

wi pay the invoice. 

Th press gives the Deparnt of Hum Serces much mor control over SUAG grt fuds than ther is in other States wher the grte agency simply trsfer cash to other 

agencies for SUAG activities. In adtion, there ar no cash balance or advance-of-funds 

issues beause agency fuds must be expended before clai can be mad for reimbursement. 

The sane priciple is tre of al contrts awar by the Ditrct of Columbia governent. 

PUBLIC HEALTH ASSISTANCE 

Assistane or Serve Activities 

The Commssion on Public Health provides a number of servces which ar reimburable with 

SLIG fuds. The Sexual Assault Follow-Up progr, one of those approved by FSA in the 

FY 1988 application, was denied in the FY 1989 application retroactive to FY 1988. Ths 

preednt generated considerable concern beause of the serious implications it has for both 

FSAand the States. 

Retractive diapproval of a program, coupled with retractive disapproval of the 

methodology use to calculte progr adstrtive costs discusse unde Public 

Assistace, has established an atmspher of uncerty and distrst. The Ditrct of 

Columbia felt that it is under consideble fiancial rik if costs ar incur for a prgr thought to be approved for SLIAG reimburment. The impact is geometrc if anticipation of 

reimburment causes the Distrct of Columbia to expnd adtional fuds for other activities. 

Documentaton of Eligible Legalizd Alien Stats 

Public health agencies, lie income maitenance agencies, emphasiz the importce of 

identiyig an eligible legal alen when the person reuests servces. However, no 

processes or identier codes had ben develope at the tie of the review. Using the Income 
Matenance Admtrtion mol, intae and referralfor wi be revise to ask 

spifcaly for th inormtion, and eligible legal alens wi be given identication 

numbers. 

Program Costs 

FINDING: The FSA's definition of public assistance includs some public health activities 

which created adnistrative and service delivery problems for the Distrct of Columia 

public health agencies. 

Sever prgr adste by the Commssion on Public Health ar considere public 

assistace prgr for SUAG reimburment purses. The distiction is impot 

beause the identication of a servce as public assistace reuis documentig of costs 

incur for individual eligible legal alens served H a progr or serce is considere 

public health, the population ratio method for establishig costs can be used Applyig ths 

method costs ar determed by the peentage of eligible legal alens in a serce 

population to al members of the relevant servce popultion. This percentage is applied to 

tota progr costs to determe how much can be reimbur with SLIAG funds. 

Whe there is no quarl with the logic of FSA's defition of public assistace versus public 

health, the distiction crates serous adstrtive and prgrtic diculties for public 

health agencies. These agencies, not the public assistace agencies, must develop and 

implement new proesses for identiyig individual eligible legal alens in order to 

document costs. Public health offcis in the Distrct of Columbia ar concerned that asking 

patients about their legal status wi adverly inuence the wigness of patients who are 

ilegal residents to access public health servces. These people often enter the countr with 

highly contagious diseases such as Hepatitis B and nee tratment imedately. The effect of 

ths policy on the public health in general is not known at ths tie. 

The Distrct of Columbia note that, initialy, FSA indicate that servces considere "public 

health" under the State s public health plan would alo be considere public health for SLIAG 

reimburment. Ths position changed in June 1988, n ssitating a tota rethg of ways 

to distigush public heath frm public assistace for servces provide by public health 

agencies. The feeling on the par of the Distrct of Columbia offcials is that by makg this 

proess more dicult, States wi not be able to claim reimburment for their costs, which 

wi have the effect of seuestering funds. 

RECOMMENDATION: The FSA should reconsider its position to classif certain public 

health services as public assistance and make appropriate adjustmnts to thi position. 
Administratve Costs


Although actual dollar claied for adtrtive costs must be documente in some way, 

the Distrct of Columbia public health agencies had not develope a method at the tie of the 

review. 

Most progr adstrtive costs ar par of progr costs for public health. However, 

some progr adstrtive costs ar not include in th figu. Intialy, the Ditrct of 

Columbia submitt a plan to clai these costs using as an estiate the 8 percent indit cost 

rate approved by the cognt Fedra agency. Because of FSA's concern about ths 

computation in the FY 1988 updte and the FY 1989 application, the Distrct of Columbia 

realculate these costs and submitt an actual dollar figu. 

The Commssion on Public Heath had not determed if attmptig to doument and clai 

costs retractively for FY 1988 is cost effective. The delay in the publication of fial 

regutions, coupled with the reuiment that may public health prgr identi 

individuals to document costs, has ma ths such a labor-intensive and costly effort that the 

Distrct of Columbia may not have the resoures nor the tie to prperly doument costs in 

orr to clai reimburment retractively. 

Drawdown 01 Funds an Cash Balanes 

The Deparent of Human Servces, Ofce of the Contrller provides the Commssion 

Public Health with budget authority to expend a speifc dollar figu under the SLIAG 

account. The Commssion must submit vouchers for funds expende in order to clai 

reimburment from the SLIAG account. The Prgr Maager must approve the vouchers 

before the Ofce of the Contrller wi authori payment. Since al payments ar cost 

reimburment, there ar no cash advance or cash balce issues. 

MENTAL HEALTH 

Asristance or Serve Activities 

The Distrct of Columbia has a separte Commssion on Menta Health. Within ths 

Commssion, the-Multicultu Servces Division was established in 1987. The Division is 

pry a communty-bas progr to meet the menta health servce nee of the grwig Distrct of Columbia imgrt population. The goal is to preserve the integrty of the famy, 

suppor ethc pride, and assist in adptation to U.S. cultu. The Division provides a wide 

rage of both inpatient and outpatient servces includig psychiatrc assessment, medcation 

nursing and social services, psychological testing, and individual, grup, and famy therapy. 
Documentaton of Eligible Legald Alien Stats 

Prgr offere by ths agency ar considere public assistace servces for SLIAG 

reimburment purses. Individual eligible legal alens must be identied to document 

costs. When a patient comes to the center for tratment, basic inormation is obtaed, includig the individual's legal status. The sta is sensitive in approachig ths question. May ties it is not dicusse unti there is a trst relationship between the patient and the counselor. However, at some point durg therapy, legal status is discusse beause it is an impot strssor and an integr par of therapy. Once it has ben established that the patient 

is an eligible legalze alen, a copy of the alen regitrtion car (1-688, Tempo Resident Ca or 1-688A, Employmnt Authortion Cad) is ma and beomes par of the patient reor 

Program Costs 

Patients ar told imedately that there is a bilg system. Diernt method for paymnt discussed includig Medcar, Medcaid, and Medcal Charties. The Division alady has a 

system to identi costs for individual. 

Once an individual is identied as an eligible legalze alen, a discrte income matenance identier cod is use There is also a progr cod which identies the fudig soure SLIAG. Oter fundig soures (e.g., Medcaid) ar shown in the progr cod so only the apprprate percentage is charged to SUAG. Al fianci inormtion provide to the 

counselor is vered by the fianci division with 30 days of the fit visit. 

Rates for tratment ar determ by Medcar, which views the Commssion on Menta 

Health as a hospita with afated clics. Financial statements ar submitted to Medcar in 

accordace with the State Menta Health Plan. From these statements, Medcar and the 

Commssion agr on a per diem inpatient rate and outpatient tratmnt rates. These rates 

could beome actual prgr costs for SUAG reimburment. 

Th "methodology of deterg progr costs was repo to the OIG reviewer at the tie 

of the on-site inspetion. 

Administratve Costs


The Distrct of Columbia has not determed a method to document actual adistrtive 

costs. The 8 percent figu used for public health was also used for menta health to compute 

progr adnistrtive costs in the initial FY 1988 applicaclon. Ths figu was reomputed 

for the FY 1988 update and the FY 1989 application. 
Drawdown of Funds and Cash Balances 

The Commssion on Menta Health uses the sam press as the Commssion on Public 

Health to obta SLIAG fudig. Since al payments ar cost reimbursement, there ar no 

cash advance or cash balance problems. 

EDUCATION 

Assistae or Serve Activis 

The Distrct of Columbia clai SLIAG reimburment only for adult education servces. 

The Distrct of Columbia Public School System aly offers a number of cours in English 

laguage and civics skis. Bas on curnt regitrtion inormtion, a large number of the 

40 eligible .legalze alen students at the Gordon Adult Education Center ar ilterate, which 

prsents speal prblems for plang classes. In response, the Distrct of Columbia Public 

School System is cratig a new prgr Amesty Orentation. Th progr 

siultaeously adsses litey and citizenship skis, which eligible legal alens nee 

to convert their status frm tempo to perment. 

The Distrct of Columbia Public School System had plaed to provide spal classes for 

eligible legalze alens durg the sumr when other adult education clases were not in 

session. However, beause the grt for the fIrst hal ofFY 1988 was not awarded unti July 

25, 1988, these classes could not be offere The lack of fundig also afecte the abilty of 

the Distrct of Columbia Public School System to pla for the fal semester. 

Although the Distrct of Columbia Public School System plans to contrt for some servces, 

no contrts had ben awar at the tie of the review. Because the grt was not awarded 

unti the end of July 1988, the reuest for prposal was sti being develope The Distrct of 

Columbia Public School System hope to have contrts awared by the end of November 

1988. 

Documentaton of Eligible Legalizd Alien Stats 

The Car and Adult Education Brach has not yet determed how they ar going to identiy 

individual eligible legal alens. Registrtion form have ben moded to reord the alien 

regitrtion number. The form will be used to identi individual eligible legaliz alens and 

to document costs. The registrtion form also provides inormtion on the student s U. 

school attendace. A copy of the alen registrtion car (form 1-688 or 1-688A) wi be kept 

in the student s reord. 
Program Costs 

The Distrct of Columbia Public School System offcials believe there wi be enough students 

in lower-level courses to establih separte classes for eligible legal alens, which should 

simpliy the doumntation of costs for individual students and the process of determg 

progr adstrtive costs. 

Matag an unduplicate count wi be a brach or division responsibilty. They 

prbably crss check registrtion in dierent progr using the alen registrtion number to 

ensur that clais ar not in excess of the average $500 per eligible legal alen per year. 

Contrto wi be reui to have a prgr approved by the INS and to use the alen 

regitrtion number for accurtely doumntig costs and ensur no duplication of ces. 

Administratve Costs


The State education agency, which in the Distrct of Columbia is the Boar of Education, can 

only charge 1.5 percent of prgr costs for SLIG progr adstrtion costs. The Adult 

and Ca Education Brach has not detered how to calculate progr costs, progr adstrtive costs, or SUAG adstrtive costs. They have not established a method for 

documentig actual costs in any of these aras. The method they use depends heaviy on the 

abilty to establih separte classes for eligible legaliz alens. The Distrct of Columbia 

Public School System preferr the establishment of separte classes for eligible legalzed 

alens if there were suffcient numbers to wart these classes. Ths would faciltate 

identiying such individuals for cost determation purses. However, regaress of class 

strctu, the methodology. use would nee to identi those individual eligible legal 

alens for whom costs would be clamed 

Drawdown of Funds and Cash Balances 

The Distrct of Columbia Public School System wi enter into an intr-Distrct agrment 

with the Deparnt of Hum Servces. The agrment wi sp servces to be provided 

by the school system in exchange for the money provide by the Deparent of Human 

Servces. The agrment gives the school system budget authority, not cash, to expend funds 

unde the SLIAG account establihed in the Deparent of Hum Servces. The school 

system wi submit vouchers to clai reimburment for any of their fuds expende in 

prvidig SLIAG servces. The Prgr Maager must approve these voucher befor the 

Deparent of Human Servces, Ofce of the Contrller wi authori payment. 
CROSSCUTTNG ISSUES 

FINDING: The Distrct of Columia Commssion on Public Health and the Distrct of 

Columia Public School System ha not estalished methods to identify and validate costs for 

services and benefits to individu eligible legalized aliens. Without thi documntation, the 

Distrct of Columiacannot be reimbursed for the fu exended. 

As note in the setions on Public Health Assistace and Education, the Commssion on 

Public Health and the Distrct of Columbia Public School System either have method to 

identiy eligible legal alens or ar developing method. However, these agencies have 

not develope systems to doumnt costs for individual eligible legal alens. 

RECOMMENDATION: The District of Columia should ensure that its Commssion on 

Public Health and Public School System deelop a method to identfy and validate costs for 

services and benefits to indidu eligible legalized aliens. 

FINDING: The FSA applicatn review process created a nuer of significan problems for 

the Distrct of Columia. Also, the FSA's application review process interfered with the 

Distrct's abilty to plan for services. 

Delay in FSA issuig the implementig reguation resulted in the Distrct of 

Columbia s inabilty to properly plan for SLIAG. 

Numerous policy misinterptations and disagrments resulted beause FSA 

did not provide defitive wrttn instrctions to assist the Distrct of Columbia 

in understadig SUAG application reuiments. 

The tie fres were too short for submittg the intial SLIAG application 

FSA review and comment, and revisions of the application. 

Implementig SLIAG-fude prgr was delayed beause of a signcant 

delay in notig the Distrct of Columbia of the grt award 

No foral appeals proess exists if progr or costs ar denied in the fllst level 

review. 

Accordig to fmal regulations published Marh 10, 1988, States had to submit the 1988 

application no later than May 16, 1988. Revisions to the application had to be submittd by 

July 1 , 1988, and the FY 1989 application had to be submitte no later than July 15, 1988. 

Applications were to contan brief descrptions of the States progrs or servces, estiates 
of the States' SLIAG-relate costs for each progr or activity for that parcular fiscal year 

(includig inormation on the number of eligible legalze alens residig in the State), and a 

brief explanation of the methodology used to estimate these costs. 


Due lagely to these shan ti fres, FSA provide no for feeback on revisions 

necessar in the Distrct of Columbia s FY 1988 application. . The inormtion was trsmitted 

by telephone or in meetigs. The tie frs to make necssar revisions did not 

accommodte the organzational strctu or the nee to communcate with or sek apprval 

frm the progr components impacte by revisions reueste by FSA. Although some 

changes had a major impact on progr and grt amounts, the single point of contact 

reeived no offcial rationale from FSA for reuestig the changes. Ths could place the 

single point of contat or the sta level persn who assum responsibilty for revisions in an 

awkwar position should the changes or the amount of the grt be questioned 

The FSA would not grt paral fundig nor would FSA conditionaly approve applications. 

If changes wer not ma in accorce with FSA suggestions, the enti application was 

disapproved In adtion, FSA did not prvide the Distrct of Columbia with an appeals 

procss when progrs, costs, or methodologies were not approved The Distrct of 

Columbia had no reour other than to delete the progr entily frm its application or 

forfeit al of the SLIAG funds for that fiscal year. 

The Distrct of Columbia grt awar notice for the fit hal of FY 1988 was reived in late 

July 1988, afr the fit hal of the fiscal year had ende Coupled with the delay in 

publishig the reguation, ths ma it dicult for the Distrct of Columbia to cla 

reimburment for much of FY 1988 costs. The Distrct of Columbia wi have to determe if 

it is cost effective to retractively identiy actual costs associate with providig servces to 

eligible legalze alens. 

As of mid-October 1988, the Distrct of Columbia had not reeived the grt awar notice for 

either the seond hal ofFY 1988 nor the fit half ofFY 1989. The contiued delay in 

offcialy notig the Distrct of Columbia of its grt awar has crated fiscal problems. 

the Distrct of Columbia, agencies cannot legaly expend funds unti fundig soures 

crate Since SUAG was a new progr, agencies could not authorze or obligate fuds 

without the grt awar notice. 

RECOMMENDATION: The FSA shoul ma its application and grant process more 

orderly. Specifcally, FSA should 

prvide defitive wrtten instrctions on the SLIAG application reuirments 

and establish a dialogue with the Distrct of Columbia on SLIAG policy, 

compliance, and reportng issues to minimize the confsion that occur in the 

intial application process;

ensur that sufcient tie is alotted to the application process includig: the 

Distrct of Columbia s initial application, FSA' s review and formal comment, 

the Distrct of Columbia s consideration of FSA comments and negotiation of 

disputes, and its submission of the revise application for FSA approval; 

develop an appeals prss to use if progr or costs assocate with providig 

servces ar denied in the intial application prss; and 

revise the grt award proess for approved applications so that the notice of 

grt awar reaches the Distrct of Columbia prior to the begig of the fiscal 

yea. 

FINDING: At the time of the insectin, the Distrct of Columia ha onl informl 

guidelinesfrom FSA on determning and claming SUAG adnistrative costs, an the 

Distrct of Columia ha not deeloped methods for determning an documntng these costs. 

The Distrct of Columbia agencies indicated that the most pressing nee is for form 

gudelies which deal with acceptable method of documentig adstrtive costs. The 

Distrct of Columbia offcials did not feel sufcient guidelies existed to detenJe alowable 

SUAG adstrtive activities. . 

The FSA held severa national conferences begig in 1987 to shar inormation with States 

on SLIAG legislation, the implications and effects of the legilation on the States, the 

application pross, and most reently the documentation of costs. As par of ths effor FSA 

prvide the States with progr inoration via "Question and Answer" issuances and 

demogrphic data from the INS. Yet, accordg to the Distrct of Columbia, "question and 

answer" issues ar not enough and more foral guidelies ar neeed 

The Distrct of Columbia Commssions on Socal Servces, Public Health and Menta Health, 

as well as the Distrct of QJlumbia Public School System, reognze the nee for captug adtrtive costs. However, at the tie of the review, they had not develope 

methodologies to do ths. 

The Distrct of ColumbIa -agencies must reogniz that there ar litations on the dition 

that FSA can provide. Guidelies must be flexible enough to accommodte vartions in State 

systems and interal presses. Ultitely the Distrct of Columbia, as the grtee, respnsible for development and implementation of SLIAG progr activities, and for fiscal 

documentation of costs and expenditus. 
RECOMMENDATION: The FSA shoul issue written guidelines for determning and 

claiming SUAG adnistrative costs. Also, the Distrct of Columia should develop methods 

for determning and documntng these costs. 
OIG RESPONSE TO COMMENTS 

The FSA and the Distrct of Columbia both commente on the dr report. 

The FSA 

The FSA has genery agr with the OIG repo fidigs and reommendations. The FSA 

has taen a number of steps to improve implementig the SUAG progr includig

clarg prgr policies and prurs. We have moded cert asts of the report 

bas on the comments reived frm FSA. 

The FSA questioned the statement that the new population would signcantly incras public 

assistace and public heath assistace servces. Early estiates indicate that large numbers 

of alens would qual to access the SLIAG prgr. J"e report reogn that inoration 

obtaed durg the review deteed that substatial incrases in woroad and 

expnditus could occur in these aras as well as in education. However, we understad from 

rent discussions with State offcis that demand for servces nationaly is falg behind 

earlier projections. 

The FSA' s defition of public assistace includes some public health activities which crated 

adstrtive and serce deliver prblems for the Distrct of Columbia public health 

agencies. The OIG reommende that FSA reonsider this position. 

The FSA replied that they se th priary as an issue of cost identication and that they 

work with the States to develop method of documentig costs which ar consistent with 

FSA' s respnsibilties as stewar of public fuds. We believe that FSA's actions to identiy 

alternative method is responsive to our conces. 

We contiue to believe that a strct intetation which pets public health costs to be clai only for spc eligible legalze alens is burdensome to the States and, in many 

cass, would reui considerable revisions to the States' system or statutory reuiments. 

However, we do agr that FSA' s use of alternative systems, such as the Cost Documntation 

System and a revied poulation ratio method system which reflects usage, would be a 

positive effor to enhance cost effectiveness withou, reuig States to develop new systems 

or mae consideble reviions to present systems. The population ratio method could be 

revied to consid not only eligible legalze alens in the servce population but also use of 

those servces by eligible legalze alens. Where appropriate, other alternatives might be 

used which would prouce a more effcient system for the States and addss congrssional 

intent that the States would not be reuir to establish new or elaborate systems. 
We report that no for appes proess exists if progr costs ar denied in the fit level 

review. We agr with FSA's statement that the Grant Appeals Board does have jursidiction 

over mattrs for witholdig and repayment of SLIAG funds. However, it was the States 

concern that an effective appes mechansm be in place for issues involvig progr 

costs at the fit level of FSA's review in the application press. 

The FSA ma numus comments to clar cert matt of fact, policy, or procedur. 

We have include these commnts verbati in Appendi 

The Ditrt 01 Columbia 

The Distrct of Columbia agr with the DIG report findings and reommendations. Their 

comments ar include verbatim in Appendi C. Since the time of the on-site review, the 

Distrct has taen steps to fulf stag nee and the designation of a new SUAG 

coordator. 
APPENDIX A


GOOD PRACTICES

A number of pratices have ben identied that other States could shar. 

Based on curnt registrtion inormation, a large number of eligible legalze alen students ar ilterate, which causes problems for plang purses. The Distrct of Columbia crate a new prgr caled Amesty Orentation which adsses both literacy 'and 

citinship ski simultaeously. 

Intr-Distrct agrments establish "buyer" and "seller" relationships between cert Distrct of Columbia agencies. The buyer is the agency using the servce whie the seller 

the one providig the sece. Unde the agrments, money is not actualy trsfelTed to 

the provider of servces, inste the agrments give the provider budget authorty. The 

prvi must incur costs and submit voucher to claim reimburement. Th pross 

gives the grte agency much more contrl over the SUAG funds than in other States 

wher the grantee agency simply trsfers cash to other agencies for SLIAG activities.

Th system contas a buit- , ongoing contrl proess. 

The Distrct of Columbia Deparnt of Huma Servces established a Multi-National Eligibilty Unit to determe eligibilty for al noncitin applicants for AFC, Genera Assistace, Medcaid, and Medcal Charties. Ths process is crtical for accurte and 

aduate delivery of servces, and proper application of policy. 

The Executive Dirtor of the Ofce on Latio Afai is the single point of contact for 

the Distrct of Columbia. The Dito of the Ofce on Latio Afai is a cabinet-level 

position. The placement of the single point of contact with ths offce ensur high visibilty for ths progr which is relatively sma in most States and could be lost among 

the larger progr adstere by the larger agencies. 

A discrte identifier cod has ben develope which identies a persn as an eligible legalze alen. Th number also contaed a th-digit progr code for Medcaid 

which distigushes eligible legal alens parcipatig in ths progr from other 

tys of repients. These minor modcations to the existig computer system alows 

for accurte identication and documentation of individual eligible legalze alens receivig any tye of income matenance assistace. 

Drwdown of Fedra fuds is used to reimburse the Distrct of Columbia governent 

for expenditues. There ar no cash balances beause money must be expende before reimburment can be reueste 
APPENDIX B


FSA' S COMMENTS

(( 

APPENDIX B


DEPARTMENT OF HEALTH & HUMAN SERVICES .mily SU5:port Administration 

Memorandum 

Date; June 27, 1989 

Acting Assistant Secretary
 From: for Family Support


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

Control Act of 1986 - District of Columia (OAI-07-88-00444) 

To: Richard P. Kusserow


Inspector General


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


fact that the SLIA


rev iew. program was very new at the time of the 

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. /L-r

!it. I, , f/

r n


Attachment 

B-1

OIG DRA REPORT: 

Implementation of the state Legalization Impact Assistance Grants 

Under the Immigration Reform and Control Act of 1986: District of Columia 

The Family Support Administration' s comments are divided into three sections: Comments on background information and other 

narrative material that does not relate directly to the draft

report I s findings, comments on the -findings, and responses to the 

draft report I s recommendations. 

Narrati ve:


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

population will increase the demand for state public assistance 

and public health assistance services significantly. n The draft 

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

analysis the conclusion is based. The final report should 

clarify these points. 

In the course of implementing SLIAG, we have discovered that 

neither State and local public health programs nor, with few 

exceptions, public assistance programs, inquire about legal status. This suggests that at least some aliens were using these 

services before legalization and that newly legalized aliens do not represent a "new population" for public assistance and public 

health assistance services. Preliminary cost data from States 

suggests that newly legalized aliens are accessing public 

assistance services at rates far lower than the general 

population. There .are indications that a backlog of public 

heal th needs existed and was identified during the medical 

examinations required of all applicants for legalizations. However, there is no data to suggest that, other than this 

temporary bulge in demand for public health services, newly

legalized aliens will generate a significant increase in demand 

for public health assistance or public assistance services. 

Page 4 (Findings and Recommendations) -- The draft report says, "Since 1987, FSA has held national conferences and issued 

information to States on implementing the SLIAG program. Since 

the OIGl s onsite visits in August 1988, we have continued to 

provide assistance to States. We have conducted several more 

workshops and meetings to assist states in implementation. In October 1988, we issued a compendium incorporating the extensive 

formal guidance previously provided to States on methods of cost 

documentation. We also have provided assistance to individual 

States in the form of correspondence, telephone consultation, and 

ohsi te technical assistance. We are in the process of conducting 

initial program re iews of the major States, and intend to visit 

B-2 
.. . ...) 

the District of Columbia and selected other states as well. We 

request that the final report reflect this contin ing dialogue 

wi th states. 

Page 10 (Public Health Assistance: Administrative costs 

The draft report says, "The Commission on Pulic Health had not 

determined if attempting to document and claim costs 

retroactively for FY 1988 is cost effective. The District of 

Columbia can claim costs for those public health programs for 

which they are using the population ratio method without 

documentation. We have provided guidance to States on various 

approaches to establishing actual costs on behalf of individuals, 

including extrapolation from partial year data, statistical 

sampling, and using comparable programs in other States or jurisdictions as a basis. We are continuing to work extensively 

with states to help them establish costs for periods during which 

they did not have tracking systems in place. 

Page 12 (Mental Health: Program Costs) -- In the discussion on


how patient rates are determined, the draft report says,


Medicare and the Commission agree on a per diem inpatient 

rate and outpatient treatment rates. These rates become actual 

program costs for SLIAG reimbursement. We are unclear as to 

what the report intends to say. The rates can become the basis 

for determining SLIAG-related costs, but do not automatically 

become the costs because other factors (e. g., sliding scale fees, insurance, etc. ) may determine what portion of the rate is an 

allowable SLIAG cost. 

Page 13 (Education: Administrative Costs) -- The draft report

says, liThe Adult and Career Education Branch has not 

establ ished a method for documenting actual costs.... The method 

they use depends heavily on the ability to establish separate 

classes for eligible legalized aliens. We are uncertain as to 

why the draft report says that the.. District of Columbia needs 

separate classes for eligible legalized aliens in order to 

document costs. They only need to identify as eligible legalized 

aliens those persons they are claiming costs for. There is no need to establish separate classes. 
 lease document and explain


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


sense. 

Findinas: 

Finding:	 The FSA' s definition of public assistance includes some 

public health activities which creates administrative 

B-3 
Comments: 

and service delivery problems for the District of


Columbia public health agencies.


We question how the definitions of public health and 

public assistance create service delivery problems for 

the District of Columbia public health agencies. 

law and regulation, all programs or acti vi ties under 

both categories must be generally available. 

practice, this means that SLIAG funds are available 

only to reimburse costs in ongoing, generally available programs. In most programs, immigration status is not 

a condition of eligibility. If the alien is eligible 

for services, he or she would -receive those services 

regardless of whether they were reimbursed under SLIAG. 

The final report should .clarify this point. 

The draft report notes that "there is no quarrel with 

the logic of FSA' s definition of public assistance versus public health, " but does not explain that logic 

or why OIG recommends that FSA reverse its logic. The 

final report should explain that the regulatory


definitions of public assistance and public health


assistance are based directly on IRCA.


Programs of public assistance are defined as programs that "provide for cash, medical or other assistance.. . desianed to meet the basic subsistence or 

health needs of individuals" (section 204 (j) (2) (A) 

emphasis added). Consistent with IRCA' s explicit inclusion of medical assistance under the public 

assistance category, state or locally funded programs 

that provide medical treatment to needy individuals are public assistance. 

IRCA defines programs of public health assistance. as programs which "provide public health services, 

including immunizations for immunizable diseases, 

testing and treatment for tuberculosis and sexuallytransmitt$d diseases, and family planning services" 

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

and the legislative history indicate that Congress 

intended to allow certain traditional public health 

functions under the public health assistance category 

and medical assistance to the needy under the public assistance category. In implementing SLIAG, we have followed that statutory framework. We have defined 

public health assistance as, among other things, programs or activities that "are provided for the primary purpose .of protecting the health of the general public" (45 CFR 402. 2). The scope of programs included 

in that regulatory definition of public health 

assistance goes far beyond the specific activities 
listed in the Immigration Reform and Control Act of


1986 (IRCA), which created SLIAG.


Regarding the draft report' s concern that aliens "often 

enter the country with highly contagious diseases and 

need treatment immediately, " the final report should 

note that the treatment of dangerous contagious 

diseases, including tuberculosis and sexually 

transmitted diseases, is included in the statutory and 

regulatory definition of public health assistance. 

The public assistance/public health assistance 

categorization issue is primarily one of cost 

documentation requirements, not the allowability of 

costs associated with any particular health program. 

The report notes that District of Columbia officials 

feel that because of this issue, "States will not be 

able to claim reimbursement for their costs, which will 

have the effect of sequestering funds. Without the 

distinction between categories, the District of

Columia would likely use the population ratio method 

to establish costs for all programs run by the 

Commission on Pulic Health. Implicit in this method 

is the assumption that eligible legalized aliens will 

access programs in the same frequency and at the same cost as the general population. We do not believe this 

assumption to be appropriate for medical assistance 

programs that provide treatment to needy individuals. 

To the contrary, the information that we have to date 

indicates that al owing use of the population ratio 

method for these programs generally would overstate costs, dramatically in some cases. However, we would 

be willing to allow use of the population ratio method emoirical basis 

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


FSA realizes that many public assistance and public 

heal th programs don't routinely collect information on 

immigration status, but, we have found that many do 

collect social security numers. That is why we funded 

and devoted substantial staff resources to developing a 

system that will match the social security numbers of 

rogram participants with those o newly legalized aliens. This system will give states information on 

the number of newly legalized aliens participating in a 

program and the cost of services to them. It is now 

available and allows states to establish costs for FY 

1988 as well as current and future years. Recently, we 

sent state SLIAG Single Points of Contact suggestions 

for other possible methods for establ ishing costs. None of these al ternati ve methods would require setting. 
Finding: 

Comments: 

Finding: 

up new administrative mechanisms or checking status of


all program participants.


We will continue to work closely with the District of


Columia to develop methodologies to document costs for


all programs in its approved applications.


The FSA application process created a numer of 

significant problems for the District of Columbia. 

Also, the FSA' s application review process interfered with the District' s ability to plan for services. 

The 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 report 

should note that, because of the way IRCA set up the allocat on formula, one major reason for the compressed 

timeframe was that we could not award funds to any state until all" States' applications had been approved. 

In order for us to run the allocation formula, which 

IRCA requires to include estimates of costs, we must 

have approved estimates for all states before we can 

calculate states' allocations. 

The draft report says that "numerous policy


misinterpretations and disagreements resulted because


FSA did not provide definitive written instructions to


assist the District of Columbia in understanding SLIAG


application requirements. Had there been more time,


we would have communicated more extensively in writing.


Comments on the District' s FY 1989 application were


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


The report says no formal appeals process exists if


programs or costs are denied. The Grant Appeals Board
 has jurisdiction over issues related to the wi thholdinq 

and repayment of funds. For other matters, the state


may follow normal procedures for disagreeing with an


agency finding. 

At he time of the inspection, the District of Columbia


had only informal guidelines from FSA on determining


and claiming SLIAG administrative costs, and the


District of Columbia had not developed methods for


determining and documenting these costs.


B-6 
Comments:	 Several methods for determining the share 

administrative costs in ongoing programs that are 

allocable to SLIAG and which are acceptable 	 a Driori


are specified in the regulation at 45 CFR 402. 22 (b) . Addi tional quidance is offered in the manual 

"Establishing and Documenting Actual Costs, " October 

1988, Modules 8 and 9. The process of determining 

SLIAG administrative costs, like all costs associated 

with administering HHS grants, is governed by 45 CFR 

Parts 74 and 92 and relevant OMS circulars. 

We would like to note that this comment applies to the


draft report. s discussion under public assistance 

administrative costs (p. 7) and public health 

assistance administrative costs (p. 10). We ag ee with the draft report' s assertion that " (UJ 1 timately the District of Columia, as the qrantee, is responsible for. . . fiscal documentation of costs and expenditures. 

Three of the draft report' s recommendations propose action on the


part of FSA:


Recommendation: The FSA should reconsider its position to 

classify certain public health services as public 

assistance and make appropriate adjustments to this position. 

Response:	 As discussed above, the primary issue relating to the 

definitions of public assistance and public health

assistance is one of cost documentation. States would 

like to use the population ratio method for all 

programs run by their health departments. The final 

report should clarify whether the OIG is recommending 

that we allow use of the population ratio in programs 

where, as discussed above, its use would likely overstate actual costs. 

We believe that using the population ratio method for


all health department programs would be inconsistent


with our responsibility to exercise fiscal


responsibility in administering SLIAG funds. However, 

we recognize that some states may encounter


difficulties in establishing actual costs, especially


where ELAs are a small percentage of a State' 


population or for programs that few ELAs access. We


will continue to work with States to ensure that a


method is available to allow them to establish actual


costs for each program in their approved applications, consistent with our responsibilities as stewards of
 public funds. 

B-7 
. .

Recommenda t i on: The FSA gran t process should be made mor orderly. 

Response:	 The draft report' s recommendation refer$ to the 

FSA grant process, but the specifics indicate that 

it is referring to the SLIAG application and grant 

award process. The language of the recomendation should be more specific. 


We agree that the application process should be 

conducted in a more orderly fashion than was the 

case for the initial submissions. As the draft 

report indicates, the timeframes for the FY 1988 

and FY 1989 application processes was necessarily short. In effect, the States and we had to complete two appl ic tion processes in less than a 

year. We do not expect similar problems for the 

FY 1990 and FY 1991 application processes. 

To ensure that States have adequate time to 

prepare their FY 1990 applications based on 

empirical data, we have extended the deadline from 

JUly 15 to October 1. Additionally, we have 

encouraged States to submit. as early as possible 

any new programs, questions, or issues, and have 

advised them that they may submit all or portions 

of their applications at any time prior to the deadline. 

In order to reduce the possibility of 

misunderstanding, we have advised States that we will com nicate all substantive questions and 

concerns on their FY 1990 applications in writing, as was done for States' end-of-year reports. We

issued extensive written guidance on the FY 1990

appl ica tion process and the standards we will apply 

The draft report also recommends that we develop


an appeals process to use if programs or costs


associated with providing services are denied in
 the initial applications process. We do not 

believe such a process is necessary. The
 Department' s Grant Appeals Board has jurisdiction 

over cases involving the repayment or withholding
 of funds. Normal channels within the Department 

are open to States that disagree with decisions 

made during the course of application review. 

Recommendation: ' The FSA should issue written guidelines for 

determining and claiming SLIAG administrative costs. 
Response: Our comments under Finding #4 specify the 

guidelines offered to States in the regulation and. in subsequent written guidance. 
APPENDIX C


DISTRICT OF COLUMBIA'S COMMENTS

APPENDIX C


GOVERNMENT OF THE DISTRICT OF COLUMBIA 

EXECUTIVE OFFICE OF THE MAYOR 

OFFICE ON LATINO AFFAIRS 

REEVES MUNICIPAL CENTER


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


WASHINGTON. D. C. 20008


TELE HONE 12021 838-8785 

August 9. 1989


Richard P. Kusserow


Ins pector Gene ra 1 

S. Department of Heal th and Human Services 

Washington. D.C. 20201 

Dear Mr. Kusserow:


We have reviewed your offi ce ' s draft report on imp1 ementati on of the 

SLIAG program and found it to be a fai rly accurate representa ti on of the 

status of the Distri'ct of Columbia implementation of the State 

Legalization Impact Assistance program as of the end of last sumer. The 

few errors.. which naturally occur during brief site visits. in no way 

take away from the description. which is fair and sound. We ' had not 

planned to submit coments. but are sending you this letter at Mr. Hugh 

Owens s request. 

This spring the District of Columbia Department of Human Services 


which serves as grantee and administering agency and will soon become 

Single Point of Contact as well -- completed hiring staff for its SLIAG unit. Ms. Gayle Smith -- a DHS staff member of long standing who has 

worked on SLIAG since its inception -- is coordinator of the new unit. 

Shoul d you requi re i nfonna ti on on the current status of SLIAG 

implementation. please do not hesitate to call Ms. Smith. 202-673-3420 

Si re1Y.

cs-e 

Susan B. But1 

SLIAG Coordinator/OLA


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