IMPLEMENTATION OF THE STATE


LEGALIZATION IMPACT ASSISTANCE


GRANTS UNDER THE IMMIGRATION


REFORM AND CONTROL ACT OF 1986


STA TE OF ILLINOIS 

'!IlVICE$. 

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1f"dIa 

OFFICE OF INSPECTOR GENERAL 

OFFICE OF ANALYSIS AND INSPECTIONS 

OCTOBER 1989 
OFFICE OF INSPECTOR GENERAL


The mission of the Offce of Inspector General (OIG) is to promote the effciency, effectiveness, and integrty of progrs in the United States Deparent of Health and Human Services (HS). It does this by developing methods to detet and prevent fraud, waste, and 

abuse. Created by statute in 1976, the Inspector General keeps both the Secreta and the Congress fully and curently informed about programs or management problems and recommends 

corrctive action. The OIG performs its mission by conducting audits, investigations, and inspections with approximately 1,300 staf strategically located around the countr. 

OFFICE OF ANALYSIS AND INSPECTIONS 

This report is produced by the Offce of Analysis and Inspections (OAI), one of the thee 

major offces within the OIG. The other two are the Offce of Audit and the Offce of Investigations. Inspections are conducted in accordance with professional stadards developed by 

OAI. These inspections ar tyically short-term studies designed to determe program effectiveness, effciency, and vulnerabilty to fraud or abuse. 

This study was conducted to determne the effectiveness of Ilinois ' implementation of State 

Legalzation Impact Assistace Grats funds awarded under the Imgrtion Reform and Control Act of 1986. 

The report was prepard under the diction of Don McLaughlin, the Regional Inspector General of Region VII, Offce of Analysis and Inspections. Parcipatig in this project were the 

following people:


Kansas City San Fransisco 

Hugh Owens, Project Leader Apryl Willams 

Raymond Balandron 

James Wolf 

Alicia Smith 

Headquarters New York 

Albert J. Nace Lucile M. Cop 

Debra Robinson 
IMPLEMENTATION OF THE STATE


LEGALIZATION IMPACT ASSISTANCE


GRANTS UNDER THE IMMIGRATION


REFORM AND CONTROL ACT OF 1986


STATE OF ILLINOIS

Richard P. Kusserow 

INSPECTOR GENERAL 

OAI-07 -88-00446 OCTOBER 1989 
EXECUTIVE SUMMARY 

PURPOSE 

The purose of ths inspection was to determe how effectively ilnois implemented the 

State Legalzation Impact Assistace Grants (SLIAG) program, to identi potential problems 

early in the process, and to identiy goo practices which al States could share. 

BACKGROUND 

The SLIAG progr was established under the Imgration Reform and Control Act (IRCA) 

of 1986 to reuce the fmancial burden of providig public assistace, public health assistace, 

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

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

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

local levels. Payments ar made for public assistace activities generally avaiable to 

needy individuals and public health assistance servces offered under the States' public health 

progrs. The payments also cover educational servces designed to assist eligible legalze 

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

proficiency and citizenship skis necessar to become permanent residents. The Famy 

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

Because stIAG was a new progr, FSA realze that problems would surace early in its 

implementation. In addition to the norm diculties encountered in creatig new processes 

and proedures, FSA recogn that SLIG would have unique problems. Some of these 

issues include the diversity of programs which SLIAG encompasses, cultu and language 

barers associated with the servce population, maintaing confdentialty of informtion, and 

the extremely short tie fres for the grt award process. 

METHODOLOGY 

In response to the anticipated diculties with implementing SLIAG, FSA reuested that the 

Offce of Inspector General (OIG) conduct reviews in 10 States to determe the progress of 

States ' implementing ths progr. The FSA selected nine States and the Distrct of Columbia 

because of the varety of program they offere the number of eligible legalized aliens in the 

population, or the amount of the grant awar. The nie States ar Arzona, California, 

Colorado, Florida, Ilois, Massachusetts, New York, Texas, and Washington. 

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

documentation fuished by FSA and State and local offcials, built the base of information for 

ths report. This report represents the review conducted in the State of llinois and reports on 

its implementation of the SLIAG progr as of August 1988. 
Both FSA and ilnois were commtt to identiying problems and developing innovative and 

effective solutions for them. Imedately following our on-site visits, FSA was given an 

outle of the State concerns identied in this report 

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

on implementing the SUAG program. 

The FSA held several national conferences beging in 1987 to share 

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

application process, and the documentation of costs. 

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

demographic data from the Imgration and Natuzation Servce (IS). 

FINDING: Illnois established a structue to identify organizational and program needs. 

The Deparent of Public Aid has been assigned overal responsibilty for 

SLIG plang. The Deparent held numerous meetigs with State and local 

agencies to obta their input on SLIAG implementation. 

Chicago established an overa planng and coordiation agency to develop. 

SLIAG-related programs and operations and to share inormation with other city 

and State agencies on policy, procedures, and statistical data. 

FINDING: Illnois also took steps to document exenditures and control disbursements. 

The Deparent of Public Aid has contracted with a consulting fi to evaluate 

the State s systems and determe what modcations of present systems or 

expanded systems ar needed to implement SLIAG. 

To faciltate progrm implementation and monitoring, the State Board of 

Education established a policy limitig the amount of educational expenses. At 

the tie of the review, the amount was lited to a maximum of $4 per hour. 

Neverteless, there are some funds contrl vulnerabilties. 
FINDING: The Illnois Departent of Public Health was unsure about its responsibilities for 

implementing SUAG and the amount of funding available for SUAG purposes. 

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

Illnois. Also, the FSA's applicatin review process interfered with the State s ability to plan 

for services.


Delay in FSA issuing the implementing regulation resulted in the State 

inabilty to properly plan for SLIAG. 

Numerous policy misinterpretations and disagrments resulted because FSA 

did not provide defmitive wrtten instrctions to assist Ilois in understadig 

SLIAG application requiements. 

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

FSA review and comment, and revisions of the application. 

No formal appeals process exists if progrs or costs ar denied in the fIrst level review. 

FINDING: The State was unale to access minimal eligible legalized alien informtion in 

INS files. 

In many cases, State records did not provide fle information for specifc 

identication of eligible legalze alen status. Although INS fles conta 

identier inormation, procedurs did not exist to permt access to that fIle 

inoration which would alow Ilois to retractively identiy servces to 

eligible legalzed alens. 

FINDING: State systems to identify eligible legalized aliens and associated costs were not 

operational at the time of this review. 

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

which created adinistrative and service delivery problems for Chicago. 

As mentioned earlier, FSA and llinois have aleady initiated action on some of the 

recommendations made in this report. Steps have been taen by FSA to provide States with 

more specifc, formal guidelines for identifying and documentig actual program and

adstrative costs. However, additional actions ar necessar in other areas on the par of 

FSA and llliois. 
. .

RECOMMENDATION: The Illnois Departent of Public Aid should provide fuNher 

guidance to the Illinois Departent of Public Health regarding the functions exected of the 

Illnois Department of Public Health and the funding available under the SUAG program. 

Also, the Illnois Departent of Public Health needs to understand how to monitor and report 

program and adinistrative costs for health program classifed as public health. 

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

orderly. Specifcally, FSA should 

provide defitive wrtten instrctions on the SLIAG application requirments 

and establish a dialogue with Ilois on SLIAG policy, compliance, and 

reportg issues to mie the confsion that occured in the initial application 

process; 

ensur that sufficient tie is alott to the application process includig ilnois 

intial application, FSA' s review and formal comment, llliois ' consideration of 

FSA comments and negotiation of disputes, and its .submission of the revised 

application for FSA approval; and 

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

servces are denied in the initial application proess. 

RECOMMENDATION: The FSA should coordinate with INS to conduct matches of State 

and INS records to permt the State to ma retroactive determinations of SUAG eligibilty for 

public assistance and education, as well as public health assistance. 

RECOMMENDATION: The Illnois Departent of Public Aid should complete developing 

the automated system to monitor and control SllAG exenditures and disbursements. Also, 

the Illnois Departent of Public Aid should adequately instrct local components and 

agencies on the policy and procedures for identifying and keeping track of costs. 

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

health services as public assistance and mae apprl(priate adjustments to this position. 

COMMENTS 

The FSA and the State of Ilois both commented on the drt report. Both generaly agreed 

with our fmdings and recommndations. Both reported having taen a number of steps to 

improve implementing SLIAG. We have moded the report based on their comments, which 

are included verbati in appendices B and C. 
...... .... ................ ....... ........ ... 

TABLE OF CONTENTS 

EXECUTIVE SUMMARY 

NTRO DU CTIO N .... .... ..... II ... II
 811811..811.. II 11..8. .811 1 

ILLINOIS' ORGANIZATIONAL STRUCTURE .............................................. 3


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


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


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


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


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


Crosscuttin g Issues....................... .1111. .11....... ..... ....1111""11.1111......1111........ ..11 II.... ... 


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


APPENDICES 

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


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


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

INTRODUCTION


PURPOSE 

The Famy Support Admstrtion (FSA) reuested that the Offce of Inspector General 

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

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

progr awarded under the Imgration Reform and Control Act (!CA) of 1986. The 

inspection included reviewig mechansms in place to identi these funds and determning 

whether present or projected policies and proedures adere to FSA guidelies. The FSA also 

was interested in identig potential problems early in the process and goo practices which 

al States could shar. Ths report presents the results of the inspection pertg to the State 

of Ilois. 

BACKGROUND 

Under IRCA, eligible legalze alens may apply for permanent residency with a I-year 

period afr they ar fIrt eligible (i.e., by the 31st month afer they receive temporar resident 

status). 

Ths new popultion wi incrase the demand for State public assistace and public health 

assisumce servces signcantly. It wi also incras the demand for State educational 

servces as these new residents obta Englsh language and civic skis neeed to become 

S. citizens. 

To help States defry many of the costs of providing public assistace, public health 

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

each year from Fiscal Year (F 1988 thugh 1991 for SLIAG grts, less an amount 

identied as the "Federa offset." With few exceptions, eligible legalzed aliens are ineligible 

for federaly funded public assistace progrs such as Aid to Fames with Dependent 

Chdrn (AFC), foo staps, and Medcaid. The "Fedral offset" is the estiated cost 

the Federal Governent of providig these servces or benefits to those few legald alens 

who ar eligible for them. In FY 1988, the law alocated $928.5 millon to States. 

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

Assistace, which is responsible for approving applications and admnistering the program. 

The application must be approved in tota for a State to receive any SLIAG funds. The FSA 

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

determne costs and verify actual costs. 
The basic reuirment for States to clai reimburement is that costs must be alowable, 

reasonable, and allocable. State public assistance and public health assistace program must 

be the same ones avaiable to the general public. States cannot create new program in these 

aras speifcaly for eligible legalze alens. However, States may create new or adtional 

education progrs for the eligible legalze alen population. States may also clai 

reimbursement for progr adistrtive and SLIAG adnistrative costs. 

Reimburement for public assistace and public health assistance is limite only to the amount 

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

reimbursement for educational servces is an average of $500 per year per eligible legalzed 

alen. Determg progr adistrtive costs is mad in accordce with the fmal 

reguation at 45 CP 402.22. 

The FSA is responsible for adisterig the program Because SLIAG was a new program, 

FSA real that problems would surace early in its implementation. In addtion to the 

norm diculties encountere in creatig new processes and predures, FSA recogn 

that SLIG would have unque problems. Some of these issues include the diversity of 

progr which SLIAG encompasses, cultu and language barers associated with the 

. servce population, maitag confdentialty of information, and the extrmely short tie fres for the grant award process. 

METHODOLOGY 

The FSA selecte nie States and the Distrct of Columbia for the inspection because of the


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


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


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


implementation of the SLIAG progr as of August 1988.


Pror to conductig the inspetion, the OIG develope strctud discussion guides for each 

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

were held with offcials frm the Ilois Deparent of Public Aid, the Ilois Deparent of 

Public Health, the Ilois State Boar of Education, the Chicago Commssion on Human 

Relations, the Chicago Deparent of Public Health, the Chicago Community College, and a 

community-based organtion, the Polish Welfare Association. 
ILLINOIS' ORGANIZATIONAL STRUCTURE


Each State designated a single point of contact to admster and coordiate the SLIAG 

progr. The Director of the ilnois Deparent of Public Aid, which is responsible for 

public assistace in Ilois, is the State s single point of contact and the grantee agency. 

Whe the agency dictor is the designate single point of contact, program responsibilties 

have ben delegate to individuals within the Ilois Deparent of Public Aid' s Bureau of Prgr Services. The burau is responsible for SLIAG progr planning and operational 

functions. The Ilois Deparent of Public Health is responsible for public health on the 

State level. The Ilois State Board of Education is respnsible for statewide education 

progrs. Admstrtion is a function of all th components. The Ilois Deparent of 

Public Aid compiles and report their adstrative expenditus; its fiscal offce handles 

processing SLIAG fuds. 

The Ilois Deparent of Public Aid maages the Genera Assistace program under a State 

adstered system in the Chicago/Cook County area. Elsewhere in the State the progr 

localy adstered Al other assistace progrs ar adistere statewide by the Illinois 

Deparent of Public Aid In Chicago, agencies provide cash, medical, or other public aid 

assistace to supplement that provide by State agencies. Outside Chicago, local 

governnts ar the point of contact for public aid assistace. 

The Ilois Deparent of Public Health interacts with the local health deparents which 

provide servces thughout the State. Ths applies to al local public health deparents, 

includig the Chicago Deparent of Public Health. 

The Ilois State Board of Education oversees local boards of education and has oversight 

responsibilty for al educational facilties in the State. Ths includes State universities, 

colleges, techncal schools, private education companes, and other local education agencies 

or communty-based organzations which provide servces under grants or contrcts. Most 

SLIAG-relate educational servces (English as a Second Laguage, citinship, and literacy) 

wi be provided thugh local education agencies and community-based organtions. The 

local education agencies include local boar of education and colleges. The 

communty-based organizations priary wi be those organzations that function as local 

designated entities previously approved by the Imgration and Natualzation Servce (IS) 

to assist alens in fig for tempora residence under IRCA. 

FINDINGS AND RECOMMENDATIONS


Both FSA and Ilois were commtt to identiying problems and developing innovative and 

effective solutions for them. Imedately following our on-site visits, FSA was given an 

outle of the State concerns identied in this report 

FINDING: 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 share 

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

application process, and the documentation of costs. 

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

demographic data frm the INS. 

FINDING: Illnois established a structure to identif organizational and program needs. 

The State of Dlois has considered resources, organzations, and Federal 

gudelies in preparg its SLIAG program. It held a number of meetings with 

State and local agencies to obtan input on SLIAG implementation. 

Chicago established an overal coordiation component within the Chicago 

Commssion on Huma Relations early in 1987. Ths Commssion s fuction is 

to develop a centr point of expertse on the IRCA legislation and to act as a coordiatig entity to digest and funnel inormtion to the varous city 

components perting to policy, procedurs, and statistical data The 

coordiatig agency also acts as the centr point of reference for State agencies 

and has sponsor a number of meetings on SLIAG. 

The cooatig agency was found to work quite well in the Chicago ara 

where there ar considerable agencies and grantees both in size and number. 

Also, 90 percent of eligible legalize alens in the State reside in the Chicago 

ara. 
FINDING: Illinois also took steps to document exenditures and control disbursements. 

The Ilois Deparent of Public Aid has contracted with a consultig fIrm to 

evaluate the State s systems and determe what modcations of present 

systems or expanded systems ar needed to implement SLIAG. 

Prsent plans cal for crating an identication system which wi be use to follow eligible legalze alens for public aid or education and to identiy costs for 

public health. The fial specifcations were being developed when we viited 

the State agency. Accordg to the State agency, for ths short-term program a 

contrct would be preferable to developing internal expertse. 

The Ilois State Board of Education established a lit on educational expenses 

and a system for keeping trck of servces and costs. At the tie of the review, 

- reimburement was lited to maxum of $4 per hour for eligible legalize 

alens attendig educational progrs. 

Ths reimburement litation, combined with the statutory limit of $500 for educational servces per individual, could serve as a control mechansm. Once operational, the system wi permt lllinois to reord an eligible alen s attendace 

hour for reimburement and prevent duplicate biling. 

Neverteless, there ar some fuds contrl vulnerabilties. Findigs and recommendations 

concerng these vulnerabilties follow under major topic areas. 
PUBLIC ASSISTANCE 

Assistanee or Service Activities 

Ilois offers a number of public assistace programs and servces to its residents. To be 

eligible for these program, an individual must be an llinois resident and, in most cases, meet 

S. residency reuiments. 

The major program afecte by SLIAG ar Medcaid, Aid to the Medcaly Indigent, General 

Public Assistace, and Emergency Medcal Assistace. In addition, public assistace includes 

the State supplement to the Fedra Supplementa Securty Income progr, Pr-maternal 

Care, and Project Chance. 

The llois Deparent of Public Aid projected low use of public assistance durg FY 

1988-89 and anticipates incrmenta incrases in futue year. The State is evaluatig the cost 

benefits of imlementig a system to clai costs for domestic violence shelters and substace 

abuse tratment servces. If it appear that the system can be used to identi eligible legal alens, costs for these servces wil be included thugh amendig the application. 

Documentaton of Eligible Legalized Alien Stats 

Identiyig individuals as eligible legalze alens wi be made durg the intae process 

where the individual wi be reuested to provide evidence of eligible legalze alen status 

(I-688, Temporar Resident Car or 1-688A, Employment Authorization Card). 

Program Costs 

The Ilois Deparent of Public Aid plans to establish fmancial accountabilty though 

implementig an extensive system which identies costs to eligible legalize alens. While 

the extent of present fue documentation is unkown, begiing in 1988 the illiois 

Deparent of Public Aid me was moded to accept a th-digit numeric code to identify 

the individual as an eligible legalze alen. Use of the assigned alen number would be 

beneficial, but me space presents a problem yet to be solved. Another identication 

methodology considere by the State would be to match llinois Deparent of Public Aid 

files agaist the INS records fie. The match would be by Social Securty number. The State 

has reueste assistace from FSA in working with the INS on such a match. 

The system wi be capable of associating costs to identified eligible legalze alens. This 

should help in situations where duplicate costs ar being claied or expenditues are being 

claimed for individuals who ar not eligible legalzed aliens. 
Administratve Costs


There wi be SLIAG admstrative costs for activities of approximately five Ilois 

Deparent of Public Aid sta. At the local level, the Chicago Commssion on Human 

Relations has a dedicated sta of th. Admnistrtive functions or progr management 

operations wi include policy development, program implementation and functions, and 

monitorig the system of associatig costs to identied legal alens. In the case of 

assistace, State offces at the local level wi provide intae servces dictly. The State 

countig system wi collect adstrtive cost data for identiying SLIAG progr 

individuals or offces, and indit costs of overhead for sta and other support The State 

wi be contatig FSA to discuss and determe the speifics for allocatig costs to the 

SLIAG progr. 

The Ilois Deparnt of Public Aid' wil admnister SLIG funds in cooperation with other 

governnta agencies and applicable contrctors. The adnistrtion wi be thugh the 

existig State deparenta organtion using support sta and purchased services. 

Drawdown of Funds and Cash Balances 

Pressing SLIAG funds is the responsibilty of the lllinois Deparent of Public Aid's fiscal 

offce. Ths offce calculates expenditus for the varous Ilois Deparent of Public Aid 

progrs, fiscal reportg, and fiancial funds control. In Ilois, the legislatue appropriates 

fuds that ar identied to specifc progrs/offces. The SLIAG funds can be drawn to the 

extent that expenditus have not exceeed appropriation. The Comptroller General 

produce warts agaist the appropriations as long as funds are avaiable. Mter expenditus 

for alowable SLIAG servces, documentation is prepar and coriuncate to the Ilois 

Deparent of Public Aid. In tu, each progr has a fiscalfiancial component The 

component is responsible for contrllng and monitorig funds thugh expenditues, grt reimburement, and fiancial reporng. In Ilois, trsfer of funds frm one agency to 

another is basicaly the same as that of a servce contract 

The Ilois Deparnt of Public Aid is the grantee agency and is responsible for drawdown 

of Federa funds, disbursement of funds to State agencies providig SLIAG-related servces, 

and reportg those expenditus to FSA. Drawdown is made periodcally base on reported 

expenditus and is use to reimbure State and l al agencies or contrctors providing 

SLIAG-related servces. In public assistace, there are no cash balances since funds must be 

expende before reimbursement is claimed and drwdown is made. 
PUBLIC HEALTH ASSISTANCE 

Assistance or Serve Activities 

The Ilois Deparent of Public Health interacts with the local health deparents, which 

provide servces thughout the State. Services include health education and famy planning 

progrs, communcable sexual disease screening and treatment, screenig assessment for 

menta health and substace abuse, and maternal and child health, Hansen s disease, vision 

hearg, and denta car. Genera health oversight services, such as monitorig/testig of the 

envinment, ar also covered 

As noted in more deta in the section on Ilois' Organzational Strctue, the Ilois 

Deparent of Public Health uses a network of local governent unts and 

grtes/contrctors to provide servces thughout the State. Public health in Chicago is the 

responsibilty of the Chicago Deparent of Public Health. 

Documentaton of Eligible Legalized Alien Status 

The natu of servces provided does not render the common practice of identiyig costs to a 

parcular eligible legalze alen to be feasible. To protect the enti population" frm 

communcable disease, public health servces are provided to anyone who nees them without 

identig individuals served The Ilois Deparent of Public Health is relyig upon the 

system being develope by Ilois Deparent of Public Aid thugh contracts to identiy 

eligible legalze alens. The system is to have the capabilty of associatig costs for 

alowable activities. 

Program Costs 

Under SLIAG, fudig for public health assistace is avaiable for services that ar par of the 

State or local public health progr. The Illois Deparnt of Public Health plans to use 

the State SLIG system being develope which wil identify costs to those alowable 

activities and servces. In tu, a population ratio formula will be use to calculate specifc 

State and local SLIAG-related costs. At the tie of the on-site visit, public health sta did not 

know detas of this system nor speifcs related to report processing. 

Public health/costs wil be claied agaist allowable activities/servces. Without going to the 

source for verication, the Ilois Deparent of Public Health is not in a position to ensure 

that duplicate servces have not ben reuested and received by eligible legalzed alens, and 

costs accred for those servces. At the tie of the review, the State was aware that there 

could be a problem with ensurg duplicate services had not been requested and received. 

anticipation of this situation occurng, the State was in the process of developing contrls for 

the intae process to ensur that duplicate costs would not be reimbured by SLIAG funds. 
Administrative Costs 

Admstrative costS wi be broken down based on SLIAG and progr adnistrtion 

activities. Admstrtion wi be identied to specifc sta and costs accred in developing 

and implementig the SLIAG progr. Ongoing program costs wil be broken down into 

costs of adisterig the SLIG progr in varous State and local agencies. 

There wi be SLIAG adstrative costs for activities of approximately two public health 

sta in Ilois. Admstrtive fuctions or progr management wi include policy 

development, progr implementation, ongoing operations, and monitorig the system of 

assoctig costs to identied legalze aliens. Admistrtive progr costs wi be 

calculate and include the applicable indit cost rates established by the cognzant Federa 

agency. Using the State accountig system, adistrative costs will be compiled for 

reportg to FSA. 

Drawdown of Funds and Cash Balances 

The Ilois Deparent of Public Health is responsible for controllg and monitorig funds 

thugh expenditus, grant reimburement, and fiancial reportg. Funds ar obtaed by 

trsfer frm the llinois Deparent of Public Aid to cover expenditus. In most cases, 

payments ar for cost reimbursement. However, because cash flow may be crtical to some 

servce providers, advance paymnts do exist. 

FINDING: The Illinois Departent of Public Health was unsure about its responsibilities for 

implementing SUAG and the amunt of funding available for SUAG purposes. 

The Ilois Deparent of Public Aid staf indicate that fundig and reportng for public 

health activities would be though the State s public health agency. However, the Ilois 

Deparent of Public Health indicate uncertty as to the depth of fuctions (Le., 

oversight/monitorig) expete of that offce and the extent of admtrative funding. The

Ilois Deparent of Public Health was aware of the system being developed by the Illnois 

Deparent of Public Aid consultat to identi and document program costs, but did not 

know of its proedures. 

RECOMMENDATION: The Illnois Departent of Public Aid should provide further 

guidance to the Illnois Departent of Public Health regarding the functions exected of the 

Illnois Department of Public Health and the funding available under the SUAG program. 

Also, the Illnois Departent of Public Health needs to understand how to monitor and report 

program and adinistrative costs for health program classifed as public health. 
EDUCATION 

Assistance or Service Activities 

The Ilois State Board of Education oversees local boards of education and has oversight 

responsibilty for al educational facilties in the State. Ths includes State universities, 

colleges, techncal schools, private education fmns, and other education organzations 

agencies, as detaed in the setion on Ilnois' Organizational Strctue. The State is claiming 

reimbursement only for adult education servces. The State alady offers a number of 

courses for English, literay, and civic skis. From experience, it is known that a substatial 

propoon of eligible legalze alens ar ilterate, which wi reuir adssing their literacy 

and citizenship skis. 

Documentaton of Eligible Legalized Alien Status 

The Ilois State Board of Education plans to ditly access llinois Deparent of Public 

Aid recipient fies to documnt eligible legald alen status and use its identication system. 

At intae, education agencies ar to question individuals regardig residency and citizenship 

status, and, as applicable, to make reference to the INS car (I-688, Tempora Resident Car or 1-688A, Employment Authorzation Cad). 

Program Costs 

The Ilois State Board of Education is awaiting procedurs from the illinois Deparent of 

Public Aid to gude the agency on the system for identiying individual eligible legalized 

alens and reporg servces provided. The intae proess will be moded to ensur 

reordg eligible legald alens by the registrtion number. Information on prior education 

attendace would be obtaed but offcials do not expect school attendace to be an issue 

since most of ths population does not have a grat deal of formal education. 

As mentioned before, the Ilois State Board of Education established a reimbursement of $4 

for each hour eligible legalze alens attend educational progrs. Combined with the 

statutory lit of $500 for educational servces per individual, ths hourly reimburement 

litation could serve as a control mechanism. More importtly, the hourly reimbursement

litation wi be par of a system which will permt Illnois to monitor attndace to prevent 

duplicate bilg. 

Discussions were held with offcials of the city colleges and a community-based organization 

the Polish Welfar Association. The Association plans to fie as a contractor to provide 

educational services. Both offcials indicated that the $500 limitation for eligible legalized 

alien education assistace was more than adequate considering costs and related funding 

sources. 
Administratve Costs


There wi be SLIAG adstrative costs for activities of approximately two education staf. 

The ilinois State Board of Education s admistrative functions will include progr 

management, policy development, program implementation and monitorig, and reportg. 

At the local level, admstrtive expenses ar to be covere though the payment rate for 

educational servces. The State accountig system will captu dit and indict costs for 

reportg by the Ilois Deparent of Public Aid. 

Drawdown of Funds and Cash Balances 

The procedur for interagency trsfer of funds is a servce contrct tye of aIangement sim to that for other Federa progrs. Trasfer of fuds wi be backed up by an agency 

agrment on fuctions or activities to be conducted, and the presentation of a report which 

identies servces perfored and expenditus. Reports received from local unts wil be 

compiled into Ilois State Board of Education report that ar submitt in lie with the 

Ilois Deparnt of Public Aid' s interagency agrments. Based on these report, vouchers 

wi be drwn to trsfer fuds from the Ilois Deparent of Public Aid to the ilnois State 

Board of Education. 

The Ilois State Board of Education is aware of the relationship of State matching funds 

ing claied for SLIAG reimburement that relate to matching for other Federal programs. 

In most cases, the llliois Deparent of Public Aid reimburses other State or local agen ies 

only for expenditues afer they have been made. In situations where an education grtee requis an advance of funds to meet cash flow nees, provisions ar built into the system to 

identiy such receivables for adjustment at a later time. The Ilois State Board of Education 

indicate that such crt balance adjustment is made with 3 months on a flow basis. 

LOCAL AGENCIES 

Assistance or Serve Activities 

The State application include a separate sec on on projected costs for servces provided by 

the city of Chicago. These ar detaed in the sections on ilinois' Organizational Strctu, 

Public Assistace, Public Health Assistace, and Education, and Goo Prctices in the 

appendi. Since more than 90 percent of eligible legaliz alens in Illnois ar located in the 

Chicago/Cook County area, aduate contrl at ths level is important if State agencies and the

Ilois Deparent of Public Aid ar to receive accurate expenditue and servce data. To 

prepar for SLIAG, in 1987 Chicago established an offce within the Chicago Commssion on 

Human Relations to conduct planning activities and coordiate SLIAG activities for all city 

agencies. 
Documentaton of Eligible Legalized Alien Stats 

Loal agencies in llinois follow the State agencies' proedures. See program costs for the 

city of Chicago. If eligible for a Federal progr, the requirements of that progr are 

followed 

Program Costs 

In Chicago, an executive orr does not pennt requestig information relate to imgration 

status. Therefore, city servces allowable as public assistace, public health assistace, and 

education wi not be claied if they must be lined to individual eligible legalzed alens. 

However, costs for educational servces provided though the system of colleges can be 

identied to. individual eligible legalze aliens and claied for SLIAG reimbursement. 

Administratve Costs


Admstrative costs for sta of the Chcago Commssion on Human Relations have been 

appropriated and expended thugh the city of Chicago. The Commssion was to address the 

city s response to the impact of eligible legalize alens on city deparents and serve as a 

basic tehncal assistace resoune. The Commssion also developed a needs assessment to 

work with the varous deparents to determe costs of services and the payment source for 

those servces (locaVStatelFederalrivate). Each agency will report to the Commssion with a 

combined city report for SLIAG expenditus to be made to applicable State deparents. 

An importt concern of the Commssion regared the eligible legalze alens' abilty to cope 

and be effectively and effciently assimated. Parcular efforts were made to involve the 

community and employ local resoures to the maum to reach out to al individuals who 

could qual for public assistace and public health assistace servces generay available in 

the communty. 

Drawdown of Funds and Cash Balances 

The State s system provides for proessing a wmat to reimburse services only where 

adequate funds have been approprated to the activity by the State legislatu, and the 

expenditus have not exceeed the appropriated amounts. Drwdown of Federa funds 

mae agaist expended State and local funds. In most cases, the State reimburses other State 

or local agencies, or contrctors/grtees only for expended funds. Where a contrctor or 

grte reuies an advance of funds to meet cash flow reuirments, revisions ar built into 

the system to identiy such receivables for adjustment at a later time. These proesses have 

been covere in the Public Health Assistace and Education sections of this report 
CROSSCUTTING ISSUES 

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

Illnois. Also, the FSA's application review process interfered with the State s ability to plan 

for services.


Delay in FSA issuing the implementig regulation resulted in the State 

inabilty to properly plan for SLIAG. 

Numerous policy misinterpretations and disagrments resulted because FSA 

did not provide defitive wrtten instrctions to assist ilnois in understadig 

SLIG application reuirments. 

The tie fres were too short for submittng the initial SLIAG application 

FSA review and comment, and revisions of the application. 

No formal appeals process exists if progrs or costs ar denied in the fIrst level 

review. 

Final reguations, published March 10, 1988, cal for the States to submit the FY 1988 

application no later than May 16, 1988, with revisions submitted by July 1 , 1988. As such 

deisions coverig the State progrs, servces, and SLIAG-related cost estimates had to be 

made under shor tie fres and without a form process of grt appeals. The 

grt-makg proess followed durg ths tie mae it dicult for Ilois to effectively and 

effciently implement the SLIAG program Likewise, State planing was negatively impacted 

by delays of FSA and the INS in promulgatig regulations, and changig policies that were 

specifed in more than one drt regulation released at varous times by the INS. 

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

orderly. Specifcally, FSA should 

provide defitive wrtten instrctions on the SLIAG application reuirments 

and establish a dialogue with lllinois on SLIAG policy, compliance, and 

reportg issues to mimie the confsion that occured in the initial application 

process; 

ensur that sufficient time is allotted to the application process including llinois 

initial application, FSA' s review and formal comment, llinois ' consideration of 

FSA comments and negotiation of disputes, and its submission of the revised 

application for FSA approval; and 
develop an appeals process to use if program or costs associated with providig 

servces are denied in the initial application proess. 

FINDING: The State was unale to access minimal eligible legalized alien informtion in 

INS files. 

Unti the maagement system is established the State generay wil not be able to identiy 

eligible legalze alen status. Though INS data fies conta this inormtion, it is unavaiable 

to other agencies due to unsolved confdentiality and transfer provision issues. Accordig to 

the ilois Deparent of Public Aid, the State is thus unable to retractively identiy services 

provide to reipients who may or may not be legalze alens. From recent inormation 

obtaed thugh contacts with FSA, FSA is workig with INS to establish a way to match 

flies so statistical data can be obtaned but not specifc eligible legalze alen data. 

RECOMMENDATION: The FSA should coordinate with INS to conduct matches of State 

and INS records to permit the State to make retroactive determinations of SUAG eligibilty for 

public assistance and education, as well as public health assistance. 

FINDING: State systems to identify eligible legalized aliens and associated costs were not 

operational at the time of this review. 

Discussion with sta indicated that the Ilois Deparent of Public Aid had not yet 

implemented mechansms to permt identiying servces and costs to individual eligible legal alens. The State is using a general contrctor to develop and implement a major 

system that wi follow al recipients of public assistace and education servces. Also, a 

contrctor wi be selected for aggrgate data collection and management of the client 

identication and Prject Chance (assistance-relate employment) servces for eligible legal alens receivig public assistace. The system will be tied to an eligible legalzed 

alen identier for public aid and education assistace to clai costs associate with 

individual eligible legal aliens. 

A th-digit identier has ben used by the nlinois Deparent of Public Aid since March 

1988. The number of the Ilnois Deparent of Public Aid reipients entere onto the rolls 

since then is unown. The contrctor was conducting a special fie review to determne the 

number of reords reflectig such an identier. 

The system is planned to ditly access llinois Deparent of Public Aid recipient fies. In 

the case of public health and education, local agencies or grtees wil report to the ilinois 

State Board of Education, ilinois Deparent of Public Health, or dictly to the contractor 

operating the identication system. At the time of the on-site visit, complete detais of this 

system and specifc detais on the maner of report processing had not been finalized. The 
llois State Board of Education will be releasing a Request for Proposal for local agencies to 

submit proposals to provide language and civics education to eligible legal aliens. 

However, they wi not have a means to trace services to eligible legalzed alens and check for 

duplication of services unti the Ilois Deparent of Public Aid' s system is implemented. 

In the case of public health, costs wi be identified by activities and a ratio-to-population 

formula wi be used to calculate thc? SLIAG porton of State and local expenditus. The

Ilois Deparent of Public Health indicated dependency on the identication system being 

developed by the contrtor. Without the benefit of the system, components wi not be able 

to monitor fuds to the component or grte contrtors. 

RECOMMENDATION: The Illnois Departnt of Public Aid should complete developing 

the automated system to monitor and control SUAG exenditues and disbursements. Also, 

the Illnois Departent of Public Aid should adequately instrt local components and 

agencies on the policy and procedures for identifying and keeping track of costs. 

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

which created adinistrative and service delivery problems for Chicago. 

Chcago has a unque situation afecting the identication proess. Thugh an executive 

order, the city does not permt its agencies to inquie about the legalization status of 

individuals seekig varous fors of assistace. 

Loal public health components noted that present plans called only for monitorig 

expenditus thugh applyig a ratio-to-population method. Public health cliics in Chicago 

also provide a fu range of tratment for tertar level of car. Under curent FSNSLIAG 

policy, such care would fal under the public assistace category. The distiction is importt 

because identiyig a servce such as public assistance reuirs monitoring costs by 

identiyig individual eligible legalze aliens served. As such, the intae identiyig, 

monitorig, and reportg system at the public health servce clinics must be equipped to 

distiguish public assistace from public health and to correctly report progr or service 

costs. 

The distiction between public assistace versus public health creates serious admstrtive 

and programatic diculties for the city of Chicago s public health agency. Public health 

offcials ar concerned that any effort to document clinic health car servces will afect the 

wigness of sick patients who ar ilegal alens to access public health servces. 

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

health services as public assistance and make appropriate adjustments to this position. 
OIG RESPONSE TO COMMENTS 

The FSA and the State of llinois both commented on the drt report. 

THE FSA 

The FSA has generaly agr with the OIG report findings and reommendations. The FSA 

has taen a number of steps to improve implementig the SLIAG progr including 

claryig program policies and proedurs. 

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

assistace and public health assistace servces. Early estimates indicate that lare numbers 

of alens would qualy to access the SLIAG program. The report recogn that inormation 

obtaed durg the review aetered that substatial incrases in workloads and 

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

recent discussions with State offcials that demand for servces is projections. falng behid earlier

We report that no formal appeals proess exists if progr costs ar denied in the first level 

review. We agree with FSA' s statement that the Grt Appeals Board does have jursidiction 

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

concern that an effective appeals mechanism be in place for issues involvig program or 

costs at the fIrt level of FSA' s review in the application proess. 

The FSA defmed public assistace to include some public health activities, which crated 

admstrtive and servce delivery problems for Chicago. The OIG recommended that FSA 

reconsider ths position. 

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

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

with FSA's responsibilties as stewar of public fuds. We believe that FSA's actions to 

identiy alternative method is respnsive to our concerns. 

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

cases, would reuie considerable revisions to the State s system or statutory requirements. 

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

Documentation System and a revised population ratio method system which reflects usage. 

These would alow for accurate cost accounting without requirng States to develop new 

systems or make considerable revisions to present systems. Where appropriate, other 

alternatives might be used which would prouce a more effcient system for the States and 
addss congrssional intent that the States would not be reuir to establish new or elaborate 

systems. 

The FSA made numerous comments to clar cert matters of fact, policy, or procedur. 

We have include these comments verbati in Appendix B. 

The Stae of Illinois 

The State has generay agr with the OIG report findigs and recommendations. Their 

comments ar include verbati in Appendix C. Since the time of the on-site review, the 

State has taen signcant steps to effectively implement the SLIAG program thugh 

procedur and system changes. 
APPENDIX A


GOOD PRACTICES

A number of practices have been identied that other States could shar. 

Chicago established an overal coordnation component within the Chicago Commssion 

on Hum Relations early in 1987. This Commssion s function is to develop a centr 

point of expertse on the Imgrtion Reform and Control Act legislation and to coordinate inormation sent to the varous city components perting to policy, proedures, and 

statistical data. The coordatig agency also acts as the central point of reference for 

State agencies and has sponsore a number of meetigs on SLIAG. 

The coodiatig agency was found to work quite well in the Chicago ara where there 

ar considerable agencies and grtes both in size and number. Also, 90 percent of eligible legalze alens in the State reside in the Chicago ara. 

Considered a goo practice, other States or local communities may wish to consider this 

concept where a centrze coordiation component might be beneficial. 

The Ilois Deparnt of Public Aid has contrcted with a consult:ng firm to evaluate 

the State s systems and determne what modcations of present systems or expanded systems ar neeed to implement SLIAG. 

Prsent plans cal for crating an identification system which wil be used to follow eligible legalze alens for public aid or education and to identify costs for public health. 

The system is to be use for input frm State agencies and for output data for drawig 

funds and reportg. The fial specifcations were being developed when we visite the 

State agency. Accordng to the State agency, for this short-term program, a contract 

would be preferable to developing internal expertse. 

Dependig upon the sophistication of a State s systems and resources, the extent of eligible legalze alens and servces, and the cost for a contrct, a State may want to explore 

such an alternative. 

The Ilois State Board of Education established a limit on educational expenses and a 

system for keeping trck of servces and costs. At the time of the review, reimbursement 

was lited to maxum of $4 per hour for eligible legalzed alens attndig educational programs. This reimbursement limitation, combined with the statutory limit of 

$500 for educational servces per individual, could serve as a contrl mechanism. Once 

operational, the system wi permt llinois to record an eligible legalize alen s attendace hour for reimbursement and prevent duplicate billing. 
APPENDIX B


FSA' S COMMENTS

.. 

APPENDIX B


"""'1(1, 

DEPARTMENTOF HEALTH &. HUMAN SERVICES	 Family Support Admlnlstratioo 

Memorandum 

Date:	 June 27, 1989 

From: Acting Assi stan t Secretary 

for Family Support 

Subject:	 OIG Draft Report: Implementation of the State Legalization 

Impact Assistance Grants Under the Immigration Reform and 

Control Act of 1986 - Illinois (OAI-07-88-00446) 

To: 

Richard P. Kusserow


Inspector General


At tached are the Family Support Administration comments on 

the above draft report. Many of our c roents are technical 

in nature due to the compl exi ty of the legi slation and the 

fact that the SLIAG program was very new at the time of the

review. 

We appreciate the assistance and cooperation we have


received from you in response to our request to conduct this


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

are implementing the program. 

'I 

Attachment 

B-1

OIG DRA REPORT: 

Implementation of the State Legalization Impact Assistance 

Grants Under the Immigration Reform and Control Act of 1986:


ILLINOIS 

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

narrative material that does not relate directly to the draft report' s findings, comments on the findings , and responses to the draft report' s recommendations. 

Narra ti ve : 

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


population will increase the demand for State public assistance
 and public health assistance services significantly. The draft


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


analysis the conclusion is based. The final report should
 clarify these points.


In the course of implementing SLIAG, we have discovered that


neither state and local public health programs nor, with =ew
 exceptions, public assistance programs, inquire about legal status. This suggests that at least some aliens were using 

these services before legalization and that newly legalized 

aliens do not represent a "new population" for public assistance
 and public health assistance ' services. Preliminary cost data from States suggests that newly legalized aliens are accessing


public assistance services at rates far lower than the general population. There are indications that a backlog of public 

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


for public health assistance or public assistance services. 

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

information to States on implementing the SLIAG program. Since 

the OIG' s onsi te visits in August 1988, we have continued to 

provide assistance to States. We have conducted several more 

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

formal guidance previously provided to States on methods of cost 

documentation. We also have provided assistance to individual 

States in the form of correspondence, telephone consultation, and 

onsi te technical assistance. We . are in the process of conducting initial program reviews of the major States, and intend to visit


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


reflect this continuing dialog e with States. 
.. .

Page 8 (Program Costs) -- The draft report says, " the 

Illinois Department of Public Health is not in a position to


ensure that duplicate services have not been requested and


received by eligible legalized aliens, and costs accrued for
 those services. II We request that the final report clarify the 

meaning of this point. For public assistance and public health 

assistance, the need for and provision of assistance or service 

to eligible legalized alien clients must be determined on the 

same basis as that for all other eligible clients residing in the State or county. These are program policy issues for which the 

state or local administering agency has responsibility, not HHS. 

Page 12 (Program Costs) The draft report says, "In Chicago, an


executive order does not permit requesting information related to 

immigration status. Therefore, city services allowable as public assistance, public health assistance, and education will not be 

claimed if they must be linked to individual eligible legalized aliens. The FSA has provided states guidance on alternate 

methods for establishing costs without checking ELA status of individuals. Guidance has been issued to states on how they can 

use the population ratio method for establishing costs related to 

public health assistance. Guidance has also been issued on how 

the Cost Documentation System can be used to track costs for any


program category. Our policy is to assist states in developing


methods for establishing costs for all allowable programs in


their applications. We have been extremely flexible on this


issue, recognizing that in some cases it may not be possible or 

practical to identify ELA program participants in some programs. A state that is having difficulty establishing costs in a program 

in its approved application' should get in touch with FSA. 

Page 12 (Administrative Costs) The draft report says, "An important concern of the Commission regarded the eligible legalized aliens I ability to cope and be effectively and 

efficiently assimilated. . Particular efforts were made to


involve the community and employ local resources to the maximum


to reach out to eligible legalized aliens. The above 

description implies that outreach activities have been carried 

out by city agencies. Outreach costs relating to legalization requirements are . not allowable under current law. Outreach 

activities relating to the availability of public assistance and 

public health services are allowable to the extent that they are 

generally available and not provided only to ELAs. The final 

report should clarify the nature of the activities identified in 

the draft report. 

Findinas: 

Finding: The FSA I s definition of public assistance includes 

some public health activities which creates ad­


ministrative and service delivery problems for


Chicago. 

B-3 
Comments:	 We question how the definitions of public beal th and 

public assistance create service delivery problems for Illinois public health agencies. By law and

regulation, all programs or activities under both 

categories must be generally available. In practice,

this means that SLIAG funds are available only to 

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

a condition of eligibility. If the alien is eligible 

for services, he or she would receive those services 

regardless of whether they we e reimbursed under

SLIAG. The final report should clarify this point. 

he draft report notes that "there is no quarrel with 

the logic of FSA I s definition of public assistance versus public health, " but does not explain why the OIG 

recommends that FSA reverse its logic. The final 

report should explain that the regulatory definitions


of public assistance and public health assistance are


based directly on the Immigration Reform and Control


Act of 1986 (IRCA) which created SLIAG.


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

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


emphasis added). Consistent with IRCA I S explicit inclusion of medical assistance under the public 

assistance category, FSA considers state or locally 

funded programs that provide medical treatment to needy 

individuals to be public assistance programs. 

IRCA defines programs of public health assistance as


programs which "provide public health services, 

including immunizations for immunizable diseases,


testing and treatment for tuberculosis and sexually-


transmitted diseases, and family planning services" 

(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 	IRCA. 
Finding:


The public assistance/public health assistance 

categorization issue is primarily one of cost

documentation requirements, not. the allowability of 

costs associated with any particular health program. 

Under our regulation, states are allowed to use a 

single ratio of the number of ELAs in the service 

population to the total service population to establish 

actual costs for public health assistance programs, as 

defined for SLIAG. Implicit in this method is the 

assumption that eligible legalized aliens will access 

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

assumption to be appropriate for medical assistance 

programs that provide treatment to needy individuals. 

To the contrary, the information that we have to date 

indicates that allowing use of the population ratio 

method for these programs generally would overstate 

costs, dramatically in some cases. However, we would 

be willing to allow use of the population ratio method

for any program for which there is an 
 empirical basis

to indicate that doing so would not overstate costs.


FSA realizes that many public assistance and public 

heal th programs do not routinely collect information on 

immigration status but has found that many do collect social security numbers. That is why we funded and 

devoted substantial staff resources to developing a 

system that will match the social security numbers of 

program participants with those of newly legalized aliens. This system gives states information on the 

number of newly legalized aliens participating in a 

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

available and allows states to establish costs for FY 

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

sent state SLIAG Single Points of Contact suggestions 

for other possible methods for establishing costs. 

None of these alternative methods requires setting up 

new administrative mechanisms or checking status of 

all program participants. 

We will continue to work closely with Illinois to


develop methodologies to document costs for all


programs in its approved appl ications.


The FSA application process created a number of


significant problems for Illinois. Also, the FSA' 


application review process interfered with the State


ability to plan for services.


Comments: The draft report says that the time period for


submission, review, revision and approval of the


B-5 
initial application was too short. We agree that it 

would have been preferable to have had a longer period 

of time between the publication of the final regulation 

and the deadline for submission and approval of FY 1988 

and FY 1989 applications. However, the final report 

should note that, because of the way IRCA set up the 

allocation formula, one maj or reason for the compressed 

timeframe was that we could not award funds to any 

state until all states' applications had been approved. In order for us to run the allocation 

formula, which IRCA requires to include estimates of 

costs, we must have approved estimates for all states 

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 Illinois in understanding SLIAG application


requirements. Had there been more time, we would have 

communicated more extensively in writing. Our current


practice is to communicate in writing on all


substantive issues regarding state applications,


amendments, and end-of-year reports. 

The report says that no formal appeals process exists 

if programs or costs are denied. The Grant Appeals 

Board has jurisdiction over issues related to the 

wi thholding and repayment of funds. For other matters, 

the State may follow normal procedures for disagreeing 

with an agency finding. 

Recommendations 

Recommendation: The FSA should reconsider its position to 

classify certain public health services as public 

assistance and make appropriate adjustments to this position. 

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

definitions of public assistance and public health

assistance is one of cost documentation. states would 

like to use the population ratio method for all 

programs run by their health departments. The final 

report should clarify whether the OIG is recommending 

that we allow use of the population ratio in programs 

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

We bel ieve that to use the population ratio method for 

all programs run by State health departments would be 
inconsistent with our responsibility to exercise fiscal


responsibili ty 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 I s 

population or for programs that few ELAs access. We 

will continue to work with States to ensure that a


method is available to allow them to establish actual


costs for each program in their approved applications,


consistent with our responsibilities as stewards of
 public funds. 

Recommendation: The FSA grant process should be made more orderly. 

Response: The draft report I s recommendation refers to the FSA 

grant process, but the specifics indicate that it is 

referring to the SLIAG application and grant award

process. The language of the recommendation should be 

more specific.


We agree that the application process should be 

conducted in a more orderly fashion than was the case 

for the initial submissions. As the draft report indicates , the timeframes for the FY 1988 and FY 1989 

application processes were necessarily short. 


effect, the States and we had to complete two


application processes in less than a year. We do not


expect similar problems for the FY 1990 and FY 1991


application processes.


To ensure that States have adequate time to prepare


their FY 1990 applications based on empirical data, we


have extended the deadline from July 15 to October 


Addi tionally, we have encouraged States to submit as 

early as possible any new programs, questions, or


issues, and have advised them that they may submit all


or portions of their applications at any time. 

In order to reduce the possibility of


isunderstanding, we have advised States that we will


communicate all substantive questions and concerns on


their FY 1990 applications in writing, as was done for


States I end-of-year reports. We issued extensive


written guidance on the FY 1990 application process and


the standards we will apply. 


The draft report also recommends that we develop an


appeals process to use if programs or costs associated


with providing services are denied in the initial
 applications process. We do not believe such a process 
is necessary. The Department' s Grant Appeals Board has


jurisdiction over cases involving the repayment or


wi thholding of funds. Normal channels wi thin the 

Department are open to states that disagree with


decisions made during the course of application review. 

Recommendation: The FSA should coordinate with INS to conduct 

matches of state and INS records to permit the State t.o 

make retroactive determinations of SLIAG eligibility 

for public assistance and education, as well as public 

heal th assistance. 

Response:	 The FSA has recently established the Cost

Documentation System (CDS). This system matches 

social security numbers of State/local program 

participants with social security numbers of eligible legalized aliens in the ASVI data base. states are 

provided aggregate numbers of ELA program participants 

and costs associated with providing services to them. 

The system will enable States to document costs 

associated with ELAs participating in State and local 

programs without asking program participants for their 

immigration status or setting up new administrative

mechanisms. The system also will match program 

participants with alien numbers of ELAs in the ASVI 

data base. 
APPENDIX C


ILLINOIS COMMENTS

.. .. .. 

!!!!_,. ;. . ... , ,. :. ...... ...

Illinois Department of oj .	 'V Public Aid 

Susan S. Suter Jesse B. Harris Building 

Director	 100 S. Grand Avenue East 

Springfield. Illinois 62762-0001 

July 19. 1989


Hr. Rich rd P. KusseroM


Inspector GenerAl


Departaent 01 Health And HUlan Services


011 ic. or th. Inspector General


W,shington . D. C. 20201 

Dear Hr. Kusserow:


Your letter of "ay 30. 1989 translitted th draft inspection report.
 ent it led 1!Rl!!!D!!!j9D_ 91_ b!g!lj!!!i9D_ e!!j!!!D !!D!!_ YDg!!_ !b!_1!!jg!!!j9D_B!29!!_ !Dg_ '9D!!91_ 91. . and 

requested our co..ents. ThAnk you for gr,nting the extlnsion to 

, July 19, 1989 for our couents. Ne hAVI rnh..ed the draft report and hAve the lollowing com.ents to the text: 

In the Executive SUllAry section on page ii. the eleventh parAgraph we hAV' the (allowing commenl. The $4. 00 p.r hour instructional 

rAte IAXi8U. for SLIAS rei.bursement hAS been revised to $5. 00 per hour (unless prior approvAl (or a higher rate is grAnted based on 

justifiAble circulstAnc.s). 

In the section reg ding Illinois ' orgAnizationAl structur. on pAge


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


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


Chicago/Cook County Area And is ad.inistered by local governments
 elsewhere in the State. This state.ent is true only for the 6enerAl
 Alliltance ProgrAm. It does not Accuralely describe the Statewide 

operation or IDPA in the administration of All other assistance

progra.s (i. l. AFDC. AABD. Food St.mps. Hedicaid And AHI). This 

paragraph should be clarified to establish greater credibility for 

IDPA. 

Ne realize that this report is baled on An August 1988 review. However . it lay be helpFul to note that. for new applicants. the individuals ' Alien rlgiltration numbers Are nON being entered And 

rlt.ined in the client dAta bAse .nd. beginning July 3. 1989. all 

individuals who claim to be legalized aliens will have their statuI 

verified through the INS Systematic Alien VerifiCAtion for Ent i tl ement (SAVE) Program. 

C-l	 I . 

APPENDIX C,

: .

r-.. 

Page 2


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


network of local health departments throughout the State. There


appears to be some confusion regarding the Chicago Department of


He a It h , and' pro v ide r s a f pub 1 i c h e a It h s e r v ice s . 

Local health departments in Illinois are all local 

government units, including the ChiCigo Deparhent of

Health. A local health depart.ent lay be composed of an 

entire county, a municipality, or several municipalities to 

comprise a district. The Illinois Department of Public

Health (IDPH) interacts Nith all local health departaents 

in the saae manner. 

The local health departments Ni 11 be the providers of 

public health services in the local areas. The draft 

report is incorrect in stating that for- prof it businesses 

and other non-prof it agencies are used. 

It should be noted that I aore accurate reference to locally


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


In the fourth paragraph lame section, the description of the 

Illinois Slate Board of Education (ISSEI organizational function is

not accurate. ISBE oversees local boards or Iducation, not 

educational facilities in Illinois. ISBE is, hONever , responsible 

oVlrsight or all SLIAG-runded educational services regardless of 

the type of facility providing the services. 

In the third paragraph section o Education, page lOt Ne have the 

following comment. ISBE never planned or Istablished a maximum of 

125 instructional hours per Eligible Legalized Alien (ELA). There is no ii it on the number of hours an ELA aay attend SLIAG-runded 

instructional services. 

nur responses to the two rec08mendations relevant to Illinois are


allached. 

If you have any questions relative to our co.ments, please contacl 

Mr. Robert J. Schwarz, Chief Auditor at (217)7B2-11 

Sincerely, 

4. 

Susan s. Suter


SSS: j 1m


Atllchunl 

Ct: Breg O' Connor 

Gail Huecker 

Mary Ring - Illinois Departmenl Public Hu lth 

Noreen Lope: - Illinois Slate Board of Education 
OA I -07-88-00446 

IMPLEMENTATION OF THE


STATE LEGALIZATION IMPACT ASSISTANCE


GRANTS UNDER THE IMMIGRATION REFORM


AND CONTROL ACT OF 1986


RECOH ENDAT IONS RESPONSES


STATE DF ILLINOIS


2!m!D 12n_ !1 : 

The Illinois Department of Public Aid should provide further guidance to the


Illinois Department of Public Health regarding the functions expected of the


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


progra Also, the Illinois Departaent of Public Health needs to understand 

how to monitor and report progral and administrative costs for health programs 

classified as public health. 

ag!a B!!22 i!: 

In the di cus5ion of this finding it was stated that soae confusion existed 

between IDPH and IDPA regarding which agency would be responsible for 

oversight, monitoring and reporting of public health expenditures. Because 

final definitions of public health services had not bIen received frol FSA, no 

decision could be reached an allowable activities at other state Igencies 

which provide services in the public heallh Irea. EXlaples of such Igencies 

include the Deparlment of Alcohol and Substance Abuse, Illinois Environlental 

Protection Agency, and Department of Nuclear Sarety. At the tiae of the 

program review, there was insufficient information Ivailable to lake a 

decision IS lo which agency (IDPH Ind IDPAI .ould .ork .ith these olher Slill


agencies to id ntify appropriate SLIAS clails. Since lhe review, Ind receipt 

of necessary aaterials frol FSA and INS, IDPA as the Stlte s lead SLIAG 

agency, has assuaed responsibility for developing the clai.ing process for 

olher state agencies.


Slaff from IDPA have been eltreaely helpful through the enlire life of SLIAG

and have al all tiae been cooperative and inslructive. Slarf of IDPH are 

knowledgeable about monitoring and reporting program and administrative

costs. Since receipt of program definitions and counls of eligible legali 

aliens from which populalioh ralios have been developed, IDPH has begun the 

claiming process at both the slale and local levels. 

Final ELA numbers necessary to establish actual FFY' B7-BB costs under the 

populalion ratio method Nere nol provided to the state until Harch 24, . 1989. 

The deter_inalion of actual SRF and local fund reimbursement for public health

livilies was not possible until receipl of final ELA nuabers froa HHS. 
!!: 

.."f 

Public Health activities alloNable under SLIAS are restricted to those 

generally available to lhe residenls of the slale This prohibition limits for IDPH functions to the administrative activity of claiaing reimburseaent 

existing state and local programs through application of the population ratio. . Fundin . as iaplied in the DIG report Mas never a possibility; only 

reimbursement for a pro- rata share of existing operations 15 alloNable under 

SLIAG Regulations.


IDPA and IDPH continue to Mork Milh HHS in the operation of SLIAG. HHS/ORR 

staff recently conducted a SLIAG program orientation visit in Illinois and aet 

Mith staff frol IDPH, IDPA and ISBE. Contacts such as these assist in 

addressing concerns and clar ifying issues in the iapleaentation and operation 

of SLIAS. Also David K. 6riffith, LTD., a private consulting fir. was hired 

to assist IDPH in identifying and reporting state public health costs. 

e!!! !tie 

The Illinois Departaent of Public Aid should coaplet. developing lh. autoaated 

system to aonitor and control SLIAG expenditures and disburseaents. AIIO, lhe 

Illinois Depart.ent of Public Aid should adequal.ly instruct local coaponents 

and agencies on lhe policy and procedures for identifying and keeping track of 

costs. 

t!t!_6g! R!i2en!!: 

IDPA believe that CDS 

IDPA has continued to Mork with HHS and "artin "ari.tLa Data Systeas in lhe 

development and operation of lhe Cost Docuaentation System (CDS). HHS and 

(social security .atching ystea) is an imporlant aethod 

01 eslablishing costs for public assistance and health costs. Further, IDPA


has continued to work with local agencies concerning the iaplementation and


. operation of SLUG.


IDPA' s Bureau of Fiscal Operations (BFO) has developed a .onthly activity 

report oJ Fund 236. Such: report. delinules t.he draNdoNn, the expenditures and 

cash balance. This report speci f ies these three accounting coaponents by t.he 

respective agency, i. I., IDPA, IDPH and ISBE. Such rlport is reconcil.d each 

aonth Mith lh. St.ate Comptroller s records. Additionally, BFO is aaintaining 

a ledger of the SLIAG Administrative costs. Such costs are posLld on a 

quarterly basis as a result of the Cost Allocation Plan aethodology.