IMPLEMENTATION OF THE STATE


LEGALIZATION IMPACT ASSISTANCE


GRANTS UNDER THE IMMIGRATION


REFORM AND CONTROL ACT OF 1986


STATE OF FLORIDA

RICHARD P. KUSSEROW


INSPECTOR GENERAL


OAI-07 -800 AUGUST 1989 
EXECUTIVE SUMMARY 

PURPOSE 

The purse of ths inspection was to determe how effectively Florida implemente the 

State Legalzation Impact Assistace Grats (SLIAG) progr, to identi potential problems 

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

BACKGROUND 

The SLIAG progr was established under the Imgrtion Reform and Contrl 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, $928.5 miion 

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

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

local levels. Payments ar mad for public assistace activities generaly available to all 

neey individuals and public health assistace services offered under the States ' public health 

progrs. The paymnts also cover educational servces designed to assist eligible legalized 

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

proficiency and citizenship skis necessar to beome perment residents. The Famly 

Suppon Admistrtion (FSA) is responsible for adisterig the progr. 

Because SLIAG establishes a new progr, FSA realze that prob.1em aras would surace 

early in its implementation. In adtion to the norm diculties encountered in crating new 

processes and procedurs, FSA reognze that SLIAG would have unique problems. Some 

of these issues include the diversity of progrs which SLIAG encompasses, cultual and 

language barers assocate with the servce population mataing confdentiality of 

inormation, and the extrmely shon ti fres for the grt awar proess. 

METHODOLOGY 

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

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

of States ' implementig this progr. The FSA selected nine States and the Distrct of 

Columbia beause of the varety of progr they offere the number of eligible legalized 

aliens in the population, or the amount of the grt awar The nie States ar Arzona, 

Caifornia, Colorado, Flori Ilinois, Masachusetts, New York, Texas, and Washington. 

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

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

this repon. This report represents the review conducte in the State of Florida and repons on 

its implementing the SLIAG progr as of August 1988. 
Both FSA and Florida were commtt to identiyig problem aras 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 repon. The FSA and Florida have 

alady intiated 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 share 

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

application process, and the documentation of costs 

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

demographic data from the Imgration and Natualzation Servce. 

FINDING: Florida established a strtue to identfy organizational and program needs. 

The Refugee Prgrs Admnistrtor for the Deparnt of Health and 

Rehabiltative Servces is the single point of contat for Florida. The Governor 

placement of the single point of contact in the deparent ensures high visibilty 

for SLIAG. 

- Florida sureyed its public assistace, public health assistace, and educational 

services programs to assess the overa need in providing expanded assistance 

to eligible legalze alens. 

To assist eligible legalze alens meet educational reuiements for permanent resident status, Florida develope a new educational progr caled 

Citizenship. " 

FINDING: Florida also took immediate steps to documnt exenditures and .;ontrol 

disbursements . 

Florida began planing modfications to the existig State Automated 

Management Accountig System to captu addtional new data elements for 

SLIAG. Alowable expenditus wi be identied by object cods or other 

mechanisms to prevent reimburment for unalowable expenditus. 

Plans for implementig SLIAG include developing form contracts, grts, or

operatig agrements with servce providers such as the counties, a major 

hospital, and the Deparent of Education. Expenditur and disbursement 

contrls wil be an integr pan of the form agrments. The SLIAG services 

ar provided on a cost-reimburable basis. 

No cash advances or cash balances ar anticipated. Contrct compliance wil be 

closely monitore accordig to established State stadads. 

Neverteless, there ar some funds contrl vulnerabilties. 
FINDING: Florida' s planned modifcation of its aumated accounting system to control 

SUA.G expenditures and disbursements ha not been implemented. 

FINDING: The necessary forml operating agreements between the State, countes, and 

major providers containing the details for implementng SUAG ha not yet been formlized. 

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

which created adinistrative and service delivery problems for Florida public health agencies. 

FINDING: At the time of the inspectin, Florida ha onl broad, informl guidelines from 

FSA on the allowability of SUAG costs and the documntation requirements which it could 

share with the counties. 

FINDING: The FSA applicatin review process created a nuer of significant problems for 

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

for services.


Delay in FSA issuing the implementing reguation resulted in the State 

inabilty to properly plan for SLIAG. 

Numerous policy misinterpretations and disagrments resulted beause FSA 

did not provide defintive wrtten instrctions to assist Florida in understading 

SLIAG application reuirements. 

The tie frames were too short for submittg the initial SLIAG application 

FSA review and comment, and revisions of the application. 

The implementation of SLIAG-funded progr was delayed because of a 

signifcant delay in notig Florida of the grt award. 

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

review. 

As mentioned earlier, FSA and Florida have aleady intiated action on some of the 

reommendations made in this repon. Steps have ben taen by FSA to provide States with 

more specific, formal guidelines for identing and documentig actual progr and 

adistrative costs. However, adtional actions ar necessar in other aras on the pan of 

FSA and Florida 

RECOMMENDATION: Florida should complete its planned modifcation of the automated 

system to control SUAG exenditures and disbursements. 

RECOMMENDATION: Florida should develop SUAG operating agreements with the 

counties and providers as soon as possible. 

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

health services as public assistance and mae appropriate adjustments to thi position. 
RECOMMENDATION: The FSA shoul issue written guidelines for determining and 

documnting SUAG costs. In tun, Florid should ensure disseminating informtionfor 

determining and documntng SUAG program and adnistrative costs to the counties. 

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

orderly. Specifcally, FSA should 

provide defitive wrtten instrctions on the SLIAG application requirments 

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

reponig issues to minie the confsion that occured in the initial application 

process; 

ensur that sufficient tie is alott to the application process including 

Florida' s initial application, FSA' s review and formal comment, Florida' 

consideration of FSA comments and negotition of disputes, and its submission 

of the revised application for FSA approval; 

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

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 Florida prior to the begig of the fiscal year. 

COMMENTS 

The FSA and the State of Florida both commented on the drt repon. The commnts 

include as Appendices B and C, respetively. 

The FSA and the State generaly agr with our fmdigs and recommendations. Both 

reponed havig taen a number of steps to improve implementig SLIAG. Where 

appropriate, we have moed the repon based on their comments. 
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.... .. .. . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . ............. . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . .

TABLE OF CONTENTS 

EXECUTIVE SUMMARY 

INTRODUCTION. 

FLORIDA' S ORGANIZATIONAL STRUCTURE. . . . . . . . 

FINDINGS AND RECOMMENDATIONS 

Public Assistace. . . . 


Public Health Assistace. . 


Education


Crosscuttg Issues


OIG RESPONSE TO COMMENTS 

APPENDICES 

APPENDIX A: Goo Prctices 

APPENDIX B: Famy Suppon Admnistration s Comments 

EN:DIX C: Florida's Comments 
INTRODUCTION


--'i ' 

PURPOSE 

The Famy Suppon Admnistrtion (FSA) reuested that the Offce of Inspector General 

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

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

progr awarded under the Imgrtion Reform and Control Act (lCA) of 1986. The 

insption include reviewig mehansms in place to identify these funds and determning 

whether present or projected policies and predures adere to FSA gudelies. The FSA also 

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

which all States could shar. Ths repon presents the results of the inspection penag to the 

State of Florida. 

BACKGROUND 

Under IRCA, eligible legalize alens may apply for permanent residency within a I-year 

period afr they ar fIrst eligible (Le., by the 31 st month afr they receive tempora resident 

status). 

Ths new population will incrase the demand for State public assistace and public he 

assistace servces signcantly. It wil also incras the demand for State educational 

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

S. 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 fear (F 1988 thugh 1991 for SLIG grts, less an amount 

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

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

Childrn (AFC), foo staps, and Medcaid. The "Fedra offset" is the estiate cost to 

the Federa Government of providig these servces or benefits to those few legalize aliens 

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 Legalization 

Assistace, which is respnsible for apprvig applications and adnistering the progr. 

The application must be approved in tota for a State to reeive any SLIG funds. The FSA 

also provides States with tehnical assistace on policy issues and on the method use to 

estimate costs and veriy actual costs. 

The basic reuirment for States to clai reimburement is that costs must be alowable, 

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

be the same ones avaiable to the genera public. States cannot crate new progr in these 
aras speifcaly for eligible legalize alens. However, States may create new or additional 

education progrs for eligible legalize alens. States may also claim reimbursement for 

progr adstrtive and SLIAG adstrative costs. 

Reimburement for public assIstace and public health assistace is lite only to the amunt 

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

reimburment for educational servces is an average of $500 per year per eligible legalize 

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

reguation at 45 CP 402.22. 

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

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

norm diculties encountered in cratig new processes and proedures, FSA reognizd 

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

progrs which SLIAG encompasses, cultu and language barers assoiated with the 

servce population matang confdentiity of inormtion, and tle extrmely shon tie fres for the grt award process. 

METHODOLOGY 

The FSA selected nine States and the Distrct of Columbia for the inspection beause 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, Calornia, Colorado, Florida, llinois, 

Massachusetts, New York, Texas, and Washington. This repon reviews Florida' 

implementation of the SLIAG progr as of August 1988. 

Pror to conducting the inspetion, the OIG develope strctu discussion guides for each 

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

were held with progr and/or financia offcias at the State capita in Talahassee, two 

metrpolita counties (Dad and Broward), and a county. (St. Lucie). 
. ,

FLORIDA' S ORGANIZATIONAL STRUCTURE


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

progr. The Governor designated the Deparnt of Health and Rehabiltative Servces as 

the agency responsible for adstering the SLIAG progr in Florida The SLIAG single 

point of contact is the Admistrtor of Refugee Progrs. The State supervises and the 

counties adister the SLIG progr in Florida. 

The Deparent of Health and Rehabiltative Servces has 11 servce delivery distrcts 

thughout Florida. Distrct Admistrtors, who have the same standing as an Assistat 

Secta, ar appointed by the Secta and ditly responsible to the Deputy Secrta for 

Oprations. The Distrct Admtrtors have dit-lie authority over al deparenta 

progr operatig in their distrcts. 

The delivery of educational serces for both school-age childrn and adults is handled by the 

Florida Deparnt of Education. Its head is the Commssioner of Education who is an 

elected offcial. The designated point of contat in the education deparent responsible for 

seurng and submittg reuir information relative to SLIAG is the Burau of 

Compensatory Education at the State capita in Talahasse. Adult education inormtion and 

concerns ar provided to the Bureau of Compensatory Education by the Burau of Adult and 

Community Education. The two buraus wi adister and deliver SLIAG-related 

educational servces to eligible legalze alens of school age (kderganen though 12th 

grad) and adults. 

The inspection revealed that the counties exercise signcant autonomy and contrl over 

progrs and other matters withn their resptive jurdictions. Robust competition exists 

between the counties for avaiable Fedra and State progr funds alocated by the State. 
FINDINGS AND RECOMMENDATIONS


Both FSA and Florida wer commtt to identiyig problems and developing innovative and 

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

outle of the State concerns identied in ths report The FSA and Florida have alady 

intiated action on some of the fidigs and reommendations. 

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

on imlementng the SUAG program. 

The FSA held severa national conferences begig in 1987 to shar 

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

application process, and the documentation of costs. 

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

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

FINDING: Florida established a strtue to identfy organizational and program needs. 

The Refugee Prgrs Admistrator for the Deparnt of Health and 

Rehabiltative Servces is the single point of contact in Florida. The Governor 

placement of the single point of contat in the deparent ensures high visibilty 

for SLIAG. 

Florida sureyed its public assistace, public health assistace, and educational 

servces progrs to assess the overa need in providig expande assistace 

to eligible legalze alens. 

To assist eligible legalize aliens meet educational reuiments for perment resident status, Florida develope a new educational progr caled 

Citizenship. " 

St. Lucie County and a local rado station ar workig jointly to broadcast 

avaiable servces (including those under SLIAG) in Crole to reach a large 

Haitian population. 

Broward County adistrators conducte a ZI cod analysis to determne 

where concentrtions of eligible legalze alens reside in the county. Thus, 

local servce delivery centers likely to be affected most fruently can be quickly 

identified, and aras where providers ar nee can be tageted This tol 
useful for the county in carng out its progr assessment and planning 

functions for expanding existing progr. 

In Dad County, Jackson Memorial Hospitallses an on-lie computer to 

identiy patients meetig Fedra guidelies on povert. These data ar kept on 

me to aid hospita offcials to adister servce delivery programs including 

SLIAG. Jackson Memori Hospita has also developed new SLIAG patient 

registration proedures indicating the reuir documentation for eligible 

legalze alens. 

FINDING: Florida also took immdite steps to document exenditues and control 

disbursement . 

Florida began planning modcations to the existig State Automated 

Maagement Accounting System to captu addtional new data elements for 

SLIAG. Alowable expenditus wi be identied by object cods or other 

mechansms to prvent reimburment for unallowable expenditus. 

Plans for implementing SLIAG include developing form contracts, grts, or

operatig agrements with servce providers such as the counties, a major 

hospita, and the Depanent of Education. Expenditu and disbursement 

contrls wi be an integr pan of the form agrments. The SLIAG services 

ar provided on a cost-reimburable basis. 

No cash advances or cash balances ar anticipate. Contrct compliance will be 

closely monitore accordig to established State stadads. 

State and county officials indicate that existig internal controls, fmancial 

management stada, and reportg reuiments applicable to progrms 

servg the refugee population wi be use for SLIAG wherever possible. No 

new or substatially augmented systems ar planned. Ordiar modfications 

wi be made to cwrnt processes as reuird to accommodte SLIAG 

implementation and monitorig. 

Neverteless, there are some funds contrl vulnerabilties. Findings and reommendations 

concerng these vunerabilties follow under major topic aras. Findings and 

reommendations which afect mor than one assistace progr ar discusse in the 

Crosscuttng Issues setion of this repon. 
PUBLIC ASSISTANCE 

Assistance or Serve Activities 

Major public assistace progrs provide by Florda that wi incur SLIAG-related costs 

as follows: Medcaid; AFC; childrn s medcal servces; foster substitute car; primar 

health car; community car for the elderly; dit emergency assistace for foo clothing, 

shelter, and fiancial aid; home health car to low-income or indigent persons; housing; 

menta health; alcohol and drg abuse tratment; trsprttion for the elderly, low-income 

and handicappe clients; and domestic intervention. 

State offcials indicate that new progr for eligible legalze alens ar not anticipated. 

Existig systems and proesses wi be use wherever possible. However, it was disclosed 

that needs assessments were being conducte thoughout the State to determe the impact on 

existing progrs which were reuired to more effectively serve the eligible legaliz alien 

population. .At the time of the site viits, no new progr had ben speifcaly established 

beause of the avaiabilty of SLIAG funds. 

Documentaton of Eligible Legalized Alien Stats 

Documentation of eligible legalizd aliens for SLIAG public assistace wi be accomplished 

at the intae stage of processing. For example, Dad County has amended its Basic Intae 

Form to include a section for ths population. Identity documents, e.g., those issued by the 

INS (Le., 1-688, Tempora Resident Car or 1-688A, Employment Authorization Card, etc. 

wi be scrtiize and checked agaist a State- prepar list of acceptable identification. The 

single point of contact is now workig with distrct ditors to clar and establish the list 

These identity documents wi also be photocopied and mataed in the client me for futue 

reference.. Qualty assurce wi include me reviews and contacts with eligible legalzed 

alen famy members to veri identity. 

Program Costs 

FINDING: Florida' s planned modifcation of its automated accounting system to control 

SUAG exenditues and disbursements ha not been implemented. 

The State reognize the nee for modying its accounting system to determne and 

document SLIAG costs. However, at the time of the review, the State had not implemented 

methodologies to do ths. Prgr costs wi be monitor by the mechanisms the State 

employs in documentig SLIAG funds from drwdown to claimed expenditu. Florida fiscal 

offcials advise that the State Automated Management Accounting System will be modfied 

by adg new cod data elements for SLIAG. Allowable expenditus wil be defmed 

object codes or other mehanisms. Once these contrls have been established, the State wil 

make a stada accountig joural entr to move the fuds frm the State account to the 

grte account. This results in a disburement entr to the State s records and a reeipt in the 

grte s reords. The grtee agency then advises the State on using the grt funds by 
submittng cla for reimbursement Oai contag unalowable items wi be reuced.. 

accordigly by the automated system prior to payment authorization. 

The State automated system also reords monthy and year-todate expenditus agaist 

budget alocations for salares, expenses, and operatig capita outlay. Expenditu rates are 

reorded monthly. These monthly rates project annual expenditues based on curnt spendig 

levels and keep maagers awar of potential surlus or deficit situations. 

The Deparent of Health and Rehabiltative Servces uses a stadad contract management 

system for al contrted servces. It is expeted that contracts for some servces wil involve 

community-bas organzations. 

Any irgularties involvig noncompliance with contrts that reuire planned corrctive 

change wil be incorprate in a corrective action plan. Ths plan wi be develope 

cooperatively by the subcontrctor and distrct contrt maager. Financial, maagerial, and

adistrtive functions of subcontrtors wi ordary be reviewed at least annually. 

Al contrcts wi be cost-reimburable. These ar usualy paid withn 21 days. No cash 

balances ar planed, nor ar cash advances anticipate. However, if a cash advance is 

neeed, the contractor must justify the request. The State wi requir contrctors to account 

for interest on cash balances. Such sums ar deucted frm the face of the contrctor 

ounty is a contrctor of the State, e.g., for SLIAG servces, a cap on the 

amount of funds a county can access is established in the contrct. The State wil re-examne 

and re-negotiate a higher limit where appropriate and issue a contract amendment, if

invoices. Where a 


warted 

RECOMMENDATION: Florida should complete its planned modifcation of the automated 

system to control SUAG exenditues and disbursement. 

Administratve Costs


State fiscal offcials said that actual adistrtive costs ar monitored by crating cost pools 

using a coded data element called an "Other Cost Accumulator" in the State automated 

system. The State Cost Alocation Plan is followed in calculating costs as a percent of a 

claim. 

At the county level, local offcials advised that the actual adnistrtive costs for each 

progr (includig SLIAG) is bas on a percent of annual funding. This percent is 

predcated upon estiate sta nee and the county federaly approved indit cost rate for 

genera and adnistrtive costs. State claimig of progr adnistrtive costs is addressed 

in the final regulation at 45 CF 402.22. 

One county, however, did not have an indict cost rate approved by the cognizat Federal 

agency. Other county offcials were unclear about alowabilty of SLIAG costs. They 

indicate that they had only reeived broad guidelines from the State. 
Drawdown of Funds and Cash Bales 

The State drws down Fedra funds only on an as-nee basis and no soner than 3 days 

prior to the actuaJ expenditu. "Nee" is based on history of cost estimates. The State 

automate system produces grt award estiates for each quaner. Weekly averages 

calculate bas on known pattrns, e.g., payrll. Drws versus expenditus ar monitore 

monthy and expenditus versus eargs ar reviewed quanerly. 

The county must submit its application for fuds to the State single point of contact. This 

reuest is include in the State s application to FSA for SLIAG funds. A notice is issued by 

the State to the county when the county application is approved. The county then provides the 

SLIAG-relate servces to eligible legalze alens and submits invoices to the State for reimburment 

FINDING: The necessary forml operating agreements between the State, counes, and 

major providers containing the details for implementng SUAG ha not yet been formlized. 

Ths ty of argement is usually contrlled by a formal interagency agrment, contrct, 

grt, or other device. At the ti of the insption, a major aspet of SLIAG 

implementation, i.e., the fonn and content of the controllg instrments, had not yet ben 

determed. 

RECOMMENDATION: Florida should develop SUAG operating agreements with the 

counties and providers as soon as possible. 

PUBLIC HEALTH ASSISTANCE 

Assistam:e or Serve Activities 

Major public health progrs that wi incur SLIAG-relate costs include imunizations, 

famy planning, menta health, prenataperiata car, chid health, counselig and testig for AIS, examnation and tratment of sexualy trsmitted dieass, trating and follow-up of 

tuberculosis, dit inpatient and outpatient hospita servces, rehabiltation and acute care, 

laboratory and pharcy servces, X-rays, and psychiatrc consultation. Delivery of these 

servces is accomplished thugh the Deparent of Health and Rehabiltative Servces 

community health facilties in the counties, major health car providers, private physicians, 

and laboratores under contract. 

In one county, offcials have tentatively identied one new progr for indigent patients. If 

adopte it wi reimbur physicians for servces provide to these patients. Servces are 

contrte out on a cas-by-cas basis and can include laboratory and phary servces, 

X-rays, and psychiatrc consultation. 
Documentaton of Eligible Legalized Alien Stats 

Eligible legal alen documentation for cost reimburment in public health progrs 

under SLIG is not reui if cost estiates ar derived frm a population ratio formula. 

However, some public health progrs have ben identified by FSA as "public assistace 

and therefor reui such documentation. 

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

which created adinistrative and service delivery problems for Florida public health agencies. 

Severa program adistere by the Deparent of Health and Rehabiltative Servces 

considere public assistace progr for SLIAG reimburment purses. The distinction is impot beause identiyig a servce as public assistace reuis documenting costs 

inCUled for individual eligible legalze alens served If a progr or servce is considere 

public health, the population ratio method for establishing costs can be used Applying this 

method costs are determed by the percentage of eligible legalze alens in a servce 

population to al members of the relevant service population. Ths percentage is applied to 

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

Whle there is no quarel with the logic of FSA's definition of public assistace versus public 

health, the distiction crated serious adnistrtive and service delivery problems for public 

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

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

document costs. Public health offcials in Florida ar concerned that askig patients about 

their legal status wi seriously afect the wilingness of patients who ar ilegal residents to 

access public health servces. These peple oftn enter the countr with highly contagious 

diseass such as Hepatitis B and nee tratment imately. The effect of this policy on the 

public health in genera is not known at ths tie. 

Florida offcials pointed out that FSA offere no satisfactory explanation for requirng Dade 

County s Jackson Memorial Hospita (the prime public health provider for eligible legalize 

alens) to be considere engaged in public assistace rather than public health matters. This 

reuiement has resulted in Jackson Memorial Hospita havig to identify individual eligible

legaliz aliens receivig servces and ask progr eligibilty-oriented questions, which is a 

process not norally done at the public health intae phas. Jackson Memorial Hospita 

offcials find that the reuirment crates new and dicult problems in adsterig the 

progr and tends to confse applicants for SLIAG-relate servces. 

To fulfill the FSA reuirment, new SLIAG patient registrtion procedurs have been 

develope by Jackson Memorial Hospita indicatig the requir eligible legalze alen 

eligibilty documentation. The documents ar photocopied and retaned in the patient s me 

for futu reference. These policies and proedurs have ben in effect since May 20, 1988. 
Oter counties have reuested providers to keep reords documentig eligible legalze alen 

status. The counties ar also developing a handbok depictig the varous INS documents 

providers use in scrnig applicants for servces. 

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

health services as public assistance and mae appropriate adjustmnts to thi position. 

Program Costs 

Intial progr costs were estiate using a population ratio formula based on what it now 

costs to provide servces. By 1990, actual data wi be used in calculatig costs. 

Some progr costs wi not reui speifc documentig beause they were derived by a 

population ratio formula; other program costs must be documented by public health providers 

as "public assistace" to satisfy FSA reuirments. Trational method wi be use for 

ensurng that SLIAG funds ar use to provide servces only to the intende population and 

avoid duplicate clai for reimburment. These method could include reuirng acceptable 

identication obtag supponig documntation, being famar with progr guidelies, conducting tring, and monitoring. However, at the tie of the field visits, county offcials 

were unsur of the speific reuirments FSA may impose. 

Applications for public health assistace servces frm eligible legal aliens ar processed 

no dierently than other patients. However, intae form ar coded to denote eligible legaliz alens. In one county, a financial class cod is alo assigned These ar also the 

pricipal means for avoidig claimig reimburement from SLIG and other Federal 

progrs. No distiction is mad between alens who perform seasonal agrcultu services 

and those who have reside unlawflly in the Unite States prior to Januar 1 , 1982, and are 

adjusting their status to lawful tempra resident for establishing alowable costs. 

Identifyig eligible legalize aliens for State match to FedraState match progrs 

accomplished based on a class cod and the documentation in the client s fie. 

The counties also have a review proess in place for determng the allowabilty and accury of invoices frm contrtor and vendors in refugee progrs. This process wil 

accommodte SLIAG. A second review by county accountats is performed and a third 

review is done at the State level. These steps ar similar to those descbe previously under 

Public Assistace. Contracts ar cost-reimburable only and ar bas on perforance. Each
 contrct is closely monitore. 

Admnistrators reponed that ordiarly, cash surluses, if any, accred by contrtors must b 

repo to the State. Any resultig interst must be included. In adtion, a prject number is 

assigned to identiy the funds thughout the lie of the progr. 
Administratve Costs


State and county offcials indicated that actual adnistrtive costs for each progr (includig SLIAG) is based on a percentage of anual fundig. That percentage had not yet 

ben determed at the tie of the site viits. The costs must be diectly related to the SLIAG 

progr. State claig of progr adstrtive costs is adsse in the fial regulation at 

45 CF 402.22. 

Drawdown of Funds and Cash Balanes 

Predurs for trsferrg SLIAG fuds from the State to the county ar in place and ar, 

accordig to county offcials, being followed However, the form instrments governing 

SLIAG implementation have not yet ben negotiated by the State, the counties, or providers. 

In Dad County, a hospita adstrto repo that SLIAG funds for reimburment will 

be trsfen-ed frm the county to Jackson Memoral Hospita bas on monthy billings. It is 

expete that ths item wi be stipulate in the contrt or operatig agrment to be entere 

into between the State and the hospita. 

EDUCATION 

Assistance or Serve Activities 

Major educational progr that wi incur SLIG-related costs include kinderganen though 

gre 12, Adult Basic Literacy, English as a Second Language, Citizenship, and History. 

Educational servces to adults wi be provide priary by the 58 school distrcts and 13 

unity colleges designate as the adult education local providers. Educational servces wi also be avaible thugh community-bas organiztions, both public and private, and 

qualfied designate entities concerned with adult genera education and imgrt education. 

An overl nee assessment wi be done though meetigs with distrct education offcials 

and the Fedra progrs coonator to determe if new progr ar requir Thus far, 

only one new progr for adults (Citizenship) has ben crate due to the avaiabilty of 

SLIAG funds. Ths cour assists eligible legalize alens in metig the reuirments related 

to the English language and knowledge of the history and Govemment of the United States to

att lawfl permanent resident status. 

Documentaton of Eligible Legalized Alien Stas 

Servces under SLIAG will only be provide to those students who were born outside the 

United States and have complete less than 3 academic year of schooling in this countr. Stada enrllment and registrtion proedurs ar followed as pan of the eligibilty proess. 

Eligible legalize aliens are reuir to prouce acceptable identity documents, e.g., evidence 

of lawfl temporar residence (fonn 1-688, Tempora Resident Card) at that tie. Prviders 

are reuired to mata speific documentation on each eligible legalze alen to receive 
reimburement A brohure explaig SLIAG has ben produced and distrbuted statewide 

by the Deparent of Education. 

Program Costs 

The Deparent of Education exclusively uses the data provide by the INS (by way of FSA) 

to determe the number of eligible legal alens. Payments to providers ar mad on the 

basis of the lesser of $500 per student or the providers ' actual costs. 

Workshops with the distrcts ar now being planed to develop applications for submission to 

the Deparnt of Education to implement SLIAG educational servces. State offcials 

advise that they ar followig the law and regutions in strctug the applications. Fund 

source cod numbers to be incorrated in the S te automated system wil be used to ensur 

that SLIAG-relate costs wi not be mistaenly claied under SLIAG and other grts. 

Administratve Costs


The SLIAG adstrtive costs ar determed by using the 1.5 percent lit for education 

cited in the Emergency Immgrt Education Act of 1984. Ths limit is incorprated into the 

SLIAG regulation. The SLIAG costs ar distinguished from costs for other ongoing progrs 

by using a system of titles and cods. As of Mach 31, 1988, an indit cost rate of 17 

percent was fied by the cognizat Fedra agency. This rate covers a porton of items such as 

utities, rent, and, in some instaces, sta salares. 

Deparent of Education offcials advise that local education agencies will be audited 

anually. The audits wi focus on doumntig (1) adstrtion of distrct progrs, (2) 

student eligibilty identication, (3) fuds budgete and alocate (4) progr curculum and 

servces, and (5) evaluation of students and progr. 

Drawdown of Funds and Cash Balances 

State education offcials advise that no modcations to prsent accounting systems are 

planed to drw down and documnt SLIAG education fuds. 

The method ordiary use to imlement education prgrs is a grt frm the Deparent 

of Education to the distrcts. Trasfer of fuds is ac,omplished by stadad accounting 

joural entres. Drwdown follows State proedurs previously descrbe 

Although no contracts for delivery of SLIAG educational servces had ben let at the time of 

the field visits, monitorig and compliace of such contrts wi be contrlled at the distrct 

level. Stada contract compliance crteria ar followed For example, if a contrctor 

reuests an advance for working capita, a wrttn repon of cash on hand is reuir before the 

advance is authorize. Durg the contrt review proess, if large cash balances 

discovered, a full review is conducted, a corrtive action plan is develope, and close 

monitoring is perfonned by the distrct thereafr. 
CROSSCUTTNG ISSUES 

Intervews with State and local adstrtors disclose that certn aspets of SLIAG 

implementation were perceived to have had profound effects that reached beyond progr lies. Below ar the major issues that afected al th programs. 

FINDING: At the time of the insectin, Florida ha only broad, informl guidelines from 

FSA on the allowability of SUAG costs and the documntation requirements which it could 

share with the counties. 

Florida counties indicate that they had reeived litte guidace on acceptable SLIAG costs

frm the State. The State advise that FSA had provided no form dition on the 

alowabilty of costs or the documentation reuirments for such costs. As a result, guidelines 

for determg the alowabilty and amount of actual progr costs had not ben develope 

for distrbution thoughout the State. In the interim, the gudelines for preparg the SLIAG 

application were being use by Florida offcials. Estiate costs for FY 1990 and FY 1991 

wi be develope from FY 1988 and FY 1989 actual costs. 

A hospita adistrtor expresse concern over the hospita's abilty to retroactively identiy 

many patients who applied for and reeived trtmnt, but who did not have a form 1-688, 

Tempora Resident Car or 1-688A, Employment Authorization Car when the tratmnt was 

rendere Likewise, it would also be dicult to retroactively document costs for servces to 

these patients. It was only later that the hospita leared from FSA that reimbursement for 

tratment must be documente by form 1-688 or 1-688A. Hospita offcias ar anous that 

audit disalowances for reimburement could result beause of lack of reuir doumentation. 

The aformentioned national confernces held by FSA and its publication of "Question and 

Answer" issuances have provided some guidace to the State and counties on the alowabilty 

of SUAG costs. However, a nee contiues for foral gudelies on acceptable methods for 

documentig SLIG progr and 'adistrtive costs. 

RECOMMENDATION: The FSA should issue written guidelines for determning and documntng SUAG costs. In tun, Florid should ensure diseminating informtion for 

determining and documentng SUAG program and adinistrative costs to the counties. 

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

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

for services


Delay in FSA issuig the implementig regulation resulted in the State 

inabilty to properly plan for SLIAG. 
Numerous policy misinterpretations and disagrments resulted beause the FSA 

had not provide definitive wrtten instrctions to assist Florida in understading 

SLIAG application reuirments. 

The tie fres were too shon for submittg the initial SLIAG application 

FSA review and comment, and revision of the application proess. 

Implementig SLIAG-funde progrs was delayed beause of a signifcant 

delay in notiying Florida of the grt awar 

No formal appeals proess exists if program costs ar denied in the fIrst level 

review. 

State and local SLIAG plag effons had to be delayed pendig release of the fial rules. 

Ths setback, coupled with problems in the grt application approval proess and the belated 

reeipt of the FY 1988 grt awar cause last minute "scblig" by the State and counties 

to implement SLIAG. 

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

application by May 16, 1988. Revisions were due by July 15, 1988, and the FY 1989 

application had to be submitted by July 15, 1989. Due largely to these short tie fres, FSA 

provided no formal feeback on revisions necessar in Florida's FY 1988 application. The 

inoration was trsmitted verbally by telephone or personal conferences. 

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

If changes were not ma in accordce with FSA's suggestions, the enti application was 

disapproved 

State offcials reponed that instead of providig wrttn gudelines, FSA encourged Florida to 

be "crative" in the State inti application. Two subseuen! submitts of the application 

were reuir by FSA before an "approvable" version was fially accepted A senior county 

offcial said, "I was shocked at the waste of time and effon expende by the county to comply 

with FSA demands, only to be told that in the end the FSA-supplied population data and no 

other, must be used in the application. 

Thus, the confused application proess resulted in planng and adistrtive problems and 

delays plus frstrtion by State and local offcial in respondig to changig FSA 

requirements. 

Addtionally, State and county adnistrtors believe that cuts in the eligible legalize alien 

population estites by FSA were, as one put it, "arbitr and capricious." Ofcials who 

were intervewed assened that FSA gave no reason for the reuctions except that the figues 

were too high. In one county, an adnistsrator said, "The Fed are in a no-risk situation with 

SLIAG, yet rejected goo faith eligible legaliz alien estimates by a county which has been 
ver close to the refugee population for a long tie, and in the best position to assess the 

demogrphics of that population. The FSA's action has resulted in lost revenue to the county. 

However, dierences exist between refugees and the eligible legalize alien population. 

The FSA did not provide Florida with an appeals proess when program, costs, or 

methodologies were not approved Thus, Florida had no choice other than to accept the FSA 

deision or foreit al of the SLIG funds for that flScal year. 

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

orderly. Specifcally FSA shoul 

provide defiitive wrttn instrctions on the SLIAG application reuirments 

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

reponig issues to mimie the confusion that occur in the intial application 

process; 

ensur that sufficient tie is alotted to the application process including 

Florida' s initial application, FSA' s review and formal comment, Florida' 

consideration of FSA comments and negotition of disputes, and its submission 

of the revised application for FSA approval; 

develop an appeals proess to use if program or costs associated with providing 

servces ar denied in the initial application proess; and 

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

grt awar reaches Florida pror to the beging of the fiscal year. 
OIG RESPONSE TO COMMENTS 

The FSA and the State of Florida both commente on the drt repon. 

The FSA 

The FSA has generay agr with the OIG repon fidings and recommndations (see 

Appendi B). The FSA has taen a number of steps to improve implementation of the SLIAG 

progr includig clarg progr policies and proedurs. We have moded cenan 

asts of the repon based on the commnts reeived from FSA. 

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

assistace and public health assistace servces. 

Early estites indicate that large numbers of alens would qualy to access the SLIAG 

progr. The repon reognze that inormtion obtaed durg the review determed that 

substatial incrases in workoad and expenditus could occur in these aras as well as in 

education. However, we understad frm reent discussions with States ' offcials that demand 

for servces is falg behid earlier projections. 

The FSA's defition of public assistace included some public health activities, which created 

adistrtive and servce delivery problems for Florida public health agencies. The OIG 

reommende that FSA reonsider ths position. 

The FSA replied that they se this priy as an issue of cost identication and that they wil 

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

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

alternative method is responsive to our concerns. 

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

cass, would reuir considerable revisions to the State s system or statutory reuirments. 

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

System and a revised population ratio method system which reflects usage, would be a 

positive effon to enhance cost effectiveness without reuig States to develop new systems 

or mae considerable revisions to present systems. The population ratio method could be 

revised to consider not only eligible legalize alens in the servce population but use of those 

seces by the eligible legalize alien population bas on informtion alady obtaned from 

progr experience. Where appropriate, other alternatives might be use which would 

prouce a more effcient system for the States and adss congrssional intent that the States 

would not be reuired to establish new or elaborate systems. 
We repo that no formal appeals proess exists if progr costs ar denied in the fIrst level 

review. 

We agr with FSA's statement that the Grat Appeals Boar does have juridiction over 

mattrs for witholdig and repaymnt of SLIAG fuds. However, it was the State s concern 

that an effective appeals mechanism be in place for issues involvig progr or costs at the 

fit level of FSA's review in the application proess. 

TIu Stae Of Florida 

The State has generay agr with our fidigs and reommndations (se Appendi C). 

Since the tie of the on-site review, the State has also taen signifcant steps to effectively 

implement the SLIAG progr thugh proedur and system changes. 
APPENDIX A 

GOOD PRACTICES 

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

1. The Refugee Prgr Admistrto for the Deparnt of Health and Rehabiltative 

Servces is the single point of contat in Florida The Governor s placement of the single 

point of contat in the deparent ensurs high viibilty for SLIAG. 

2. Florida sureyed its public assistace, public health assistace, and educational servces 

progr to assess the overa nee in providig expande assistace to eligible legal alens. 

3. To assist eligible legalze alens meet educational reuirments for perment resident 

status, Florida develope a new educational progr caled "Citizenship. 

4. St. Lucie County and a local rao station ar workg jointly to broadast available 

seces (includig those under SLIAG) in Crle to reach a lare Hatian population. 

5. Browar County adstrtors conducte a ZI cod analysis to determe where 

concentrtions of eligible legaliz alens reside in the county. Thus, local servce 

delivery centers liely to be afecte most frequently can be quickly identied and aras 

where providers ar neeed can be tagete Ths tool is usefu for the county in carng 

out its progr assessment and plang functions for expandig existig progrs. 

6. Jackson Memoral Hospita has develope new SLIG patient registrtion proedures 

indicatig the reuir documentation for eligible legalze alens. 

7. Plans for imlementig SLIAG include developing form contrts, grts, or operatig 

agreements with servce providers such as the counties, a major hospita, and the 

Deparent of Education. Expenditu and disbursement contrls will be an integral pan 

of the form agrments. The SLIG servces ar provide on a cost-reimbursable basis. 

8. No cash advances or cash balances ar anticipate Contrct compliance wil be closely 

monitore according to established State stadads. 
APPENDIX B


Family Support Administratn Comments

. :( 

APPENDIX B 

DEPARTMENT OF HEALTH II HUMAN SERVICES Family Suppon Admlnlstratl 

Offce of Refugee Ruetllerr 

Refer to: Memorandu 

D.tl: duly 11. 1989 

Acting Assistant Secretary

From for Family Support 

OIG Draft Reportl Implementation of the State Legalization Subjet: Impact Assistance Grants Under the Immigration Refor. and 

Control Act of 1986 - Florida (IJA.r- 'J'- '5j 

To:	 Richard P. Kusserow 

Inspector General 

Attached are the Family Support Administration coments on 

the above report. Many of our coments are technical in 

nature due to the complexity of the legislation and the fact 

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

review. 

We appreciate the assistance and cooperation we have


received from you in response to our request to 	 onduct this


round of r views of the SLIAG program. The reports we


received are very useful to us in understanding how States


are impleme ting the program.


. Attachment 

B-1

OIG DRA REPORT:


Implementation of the state Legalization Impact Assistance Grants 

Under the Immigration Reform and Control Act of 1986: 

FLORIDA 

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. 

Narrative: 

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


population will increase the demand for State public assistance


and public health assistance services significantly. 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 

heal th assistance services. Preliminary cost data from States

suggests that newly legalized aliens are accessing public 

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

health 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 OIG' s onsite visits in August 1988, we have continued to 

provide assistance to States. We have conducted several more 

workshops and meetings to assist states in implementation. 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 onsite technical assistance. We are in the process of conducting 

initial program reviews of the major States, and intend to visit


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


reflect this continuing dialoge with States. 
Page 4 (Findings and Recommendations) -- The draft report lists a 

number of steps Florida took to identify "organizational and

program needs. (Many of these steps also are featured in the

Appendix, "Good Practices, " which the draft report suggests could 

be emulated by other States. It is not clear from the 

description of these steps that the statute and regulation limit 

use of SLIAG funds for public assistance and public health 

assistance to activities that are "generally available. This 

means that states may not use SLIAG funds to set up public 

assistance or public health assistance programs specifically for 

eligible legalized aliens. The final report should make clear


how this requirement relates to the state actions featured in the


draft report.


Page 6 (Pulic Assistance) -- The draft report states, "state 

officials indicated that no new programs for eligible legalized 

aliens are anticipated. The draft report also says that the 

Broward County zip code analysis of eligible l galized aliens in 

the county could be used to "identify areas where providers of 

services will be needed. It is important to note that all 

programs of public assistance must meet three criteria. First 

they must be generally available to the population of the State.

Secondly, they must be means-tested. Lastly, they must provide 

for the subsistence or health of the individual. As noted above, 

the requirement that the programs be generally available would 

preclude the state from developing any programs for "eligible legalized aliens. The final report should make that point clear. 

Page 9 (Public Health Assistance) -- The draft report says, "In 

one county, officials have tentatively identified one new program 

due to the availability of SLIAG funds. As noted above, the 

statute and regulation require that programs of public health 

assistance be generally available to the population. The final 

report should make clear how the proposed new program would 

conform to that requirement. 

Page 11 (Administrative Costs) -- The draft report says that 

actual administrative costs for each program (including SLIAG) 

are based on a percent of annual funding. That percent had not 

yet been determined at the time of the site visits. The final 

report should note that acceptable methods for determining SLIAG 

and program administrative costs are outlined in Federal regulation. Several methods for determining the share of 

administrative costs in ongoing programs that are allocable to 

SLIAG and which are acceptable 
 a priori are specified in the 

regulation at 4S CFR 402. 22. This section of the regulation also 

permi ts use of other methods for determining program 

administrative costs that will document that these costs are 

allowable, allocable to SLIAG, and reasonable. 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 OMB circulars.


Page 12 (Education) -- The draft report says that the Department 

of Education "exclusively uses the data provided by INS (by way 

of FSA) to determine the allowable amount of SLIAG funds 

available to providers who serve the eligible legalized alien population. We assume that this description applies to the way 

the state determines funding priorities, and is not descriptive 

of its basis for paying providers. Because the IRCA and federal 

regulations specify 11mi ts on the use of SLIAG funds for education purposes (the lesser of $500 per student or actual 

costs) the state Department of Education is required to make 

payments on the basis of providers' costs. The draft report 

should make this point clear. 

Findinas 

Finding: 

The FSA' s definition of public assistance includes some


public health activities which creates administrative


and service delivery problems for Florida public health


agencies. 

Comment: 

We question how the definitions of public health and 

public assistance create service delivery problems for Florida public health agencies. By statute 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. (The draft report notes 

that undocumented aliens access public health

assistance services. 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. 

Page 9 of 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 the OIG recommends that FSA reverse 

its logic. The final report should explain that the 

regulatory definitions of public assistance and public 

heal th assistance are based directly on section 204 of 

the Immigration Reform and Control Act of 1986 (IRCA), 

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

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 

considered by FSA to be public assistance. 

IRCA defines programs of public health assistance as


programs which "provide public health services, including immunizations for immunizable diseases,


testing and treatment for tuberculosis and sexually-


transmitted diseases, and family planning services"


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

and the legislative history indicate that Congress 

intended to allow certain traditional public health 

functions under the public health assistance category 

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

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" , (4S CFR 402. 2 J . The scope of programs included 

in that regulatory definition of public health 

assistance goes far beyond the specific activities 

listed in the IRCA. 

Regarding the draft report' s concern, on pages 9-10,


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 a11owabi1ity of


costs associated with any particular health program.


The report notes that Florida 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, Florida would likely


use the population ratio method to establish costs for


all programs run by the Commission on Public Health.


Implicit in this method is the assumption that eligible


. legalized aliens will access programs in the same


B-S

Finding:


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 emDirical 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 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 numers of program 

participants with those of newly leqalized aliens. 

This system gives states information on the numer of 

newly legalized aliens participating in a program and the' cost of services to them. It is now available and 

allows states to establish costs for FY 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. 


The draft report on page 10 says, wFlorida officials 

pointed out that FSA offered no satisfactory 

explanation for requiring Dade County' s Jackson Memorial Hospital.. . to be engaged in public assistance 

rather than public health matters. FSA informed Florida that the .activities in question did not meet 

the statutory and regulatory criteria for public health assistance. In addition, guidance on allowable 

activities issued to states on June 17, 1988 described 

in great detail the kinds of activities which met the 

criteria for public health assistance and those that 

met the criteria for public assistance and how to

distingu sh between the two categories. 

We will continue to work closely with Florida to


develop methodologies to document costs for all


programs in its approved applications.


At the time of the inspection, Florida had only broad,


informal guidelines from FSA on the allowability of

Comment: 

Finding: 

Comment: 

SLIAG costs and the documentation requirements which it


could share with counties. 

As the draft report notes, at the time of the 

inspection, FSA already had held several national 

conferences, beginning in 1987, and had provided states 

wi th "Question and Answer" issuances, which dealt with 

specific questions about allowability of costs.

June . 1988, we issued detailed guidance on kinds of 

activities that met the statutory and regulatory cri teria for each of the three categories of services 

for which SLIAG funds may be used (public assistance, public health assistance, and educational services). 

The regulation and its preamble provided guidance both 

about allowabili ty of costs and requirements for 

establishing costs. Additionally, Federal staff spent 

extensive time in conversations with\ state officials answering questions about cost allowabili ty and cost 

documentation. The final report should include this information. 

The FSA applicati n process created a numer of significant problems for Florida. Also, the FSA' application review process interfered with the State' 

ability to plan for services.


The draft report on page 14 says that the time period


for submission, review, " t-evision 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, one reason for the


compressed timeframe was that IRCA required that we
 allocate funds in part on the ratio of each state' 

estimated costs to total estimated costs for all states. This meant that we could not allocate funds 

until we approved estimates for all states. The final 

report should note this factor.


The draft report on page 14 says that -numerous policy 

misinterpretations and disagreements resulted because 

FSA did not provide definitive written instructions to 

assist Florida in understanding SLIAG application 

requirements. " Had there been more time, we would have 

communicated more extensively in writing. (As noted 
above, FSA did issue written guidance concerning allowability of costs. Comments on Florida' s FY 1989 

application were made in writing in response to

Florida' s request. 

The report on page 15 says no formal appeals process


exists if programs or costs are denied. The final


report should note that the Grant Appeals Board has


jurisdiction over issues related to the witholding and


repayment of funds. For other matters, the State may


follow normal procedures for disagreeing with an agency


finding. 

The draft report on page 15 quotes State and county


officials who "asserted that no reason was given by FSA


for the reductions (in estimated costs) except that the


figures were too high. In cases in which we did not


accept initial State cost estimates, we communicated to 

the state that it had not provided data to back up its estimates. Because funding is based in pa on each State' s share of total estimated costs for all States, an individual state' s cost estimates impact not only on 

its allocation, but also on all other States' allocations. (If one State' s cost estimates were 

unrealistically high, it would receive more than its 

fair share of funds, which would mean ' other states 

would receive less than their fair share. Therefore, it was necessary for us to apply consistent standards 

for evaluating the reasonableness of state estimates. 

(These standards are specified in the preamble to the 

regulation, 53 lB March 10, 1988, page 7855. The 

draft report also quotes a county administrator who 

compares the eligible legalized alien population to 

. refugees. It should be pointed out in the final report


that these two populations are not necessarily


analogous because of differences in the circumstances


under which they entered the United States and in their


demographic characteristics.


Recommendations 

Recommendation: 

The FSA should issue written guidelines for determining


and documenting SLIG costs. 

Response: 

FSA has issued such guidance. In October 1988, we


issued a comprehensive compendium of guidance on


"Establishing and Reporting Actual Costs, " which we


upda te as needed.

since the OIG inspection, we have continued to provide


specific quidance to states through national and


regional meetings, through additional written quidance


distributed to States, and through correspondence and


conversations with individual state officials.


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 departents. 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 method for all 

programs run by State health departments 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. 

Recommendation: 

The FSA grant process should be made more orderly.


Response:	 The draft report' s recommendation refers to the 

FSA grant process, but the specifics indicate 

that it is referring to the SLIAG application 

and grant award process. The lanquage of the 

recommendation should be more specific. 

We agree that the appl ication process should be


conducted in a more orderly fashion than was the case


for the initial submissions. As the draft report


B-9 
indicates, the timeframes for the FY 1988 and FY 1989 

application processes were necessarily short. 

effect, the states and FSA had to complete two 

application processes in less than a year. We do not 

expect similar problems for the FY 1990 and FY 1991

appl ication 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 questions, issues, or 

descriptions of new programs, and have advised them 

that they may submit all or portions of their 

applications at any time. In order to reduce the 

possibility of misunderstanding, we have advised 

states that we will communicate all substantive 

questions and concerns on their FY 1990 applications in
 wri ting, as was done for States' end- year reports. We issued extensive written guidance on th, FY 1990 

application process and the standards we will apply. 

The draft report on page 16 recommends that we "revise 

the grant award process for approved application so 

that notice of grant award reaches Florida prior to the 

beginning of the fiscal year. Under the regulation, that is not possible. For FY 1990, the deadline for 

submitting applications is October 1, 1989, and


applications must be approvable by December 15, 1989.


While we cannot run the allocation formula or award


grants until all states' applications are approved, we
 expect to run the formula in January 1990. However, 

States have told us that, because they have FY 1988 and 

FY 1989 funding that they can carry over into FY 1990, 

the delay will not be a problem for them. For FY 1991, 

the deadline for filing applications is July 15, 1990, 

and applications must be approvable by October 

1990. We expect to run the allocation formula and 

prepare grant awards early in FY 1991. 

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

application 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. 

B-IO 
.. 

APPENDIX C


Flori' s Comments

,. 

. . . .,,. ((.

APPENDIX C


STATE OF FLRIDA 

DEPARTMEN OF HEALll AND REABIUTAllYE SERV1CrS 

c;, 

July 7, 1989 
 4! ;, 

tp.. 

'.;0 

Mr. 'Richard P. Kusserow Inspector General 

Department of Health ' Human services


Office of Inspector General


Washington, DC 20201' 

Dear Hr. Russerow: 


Your report entitled "Implementation of the state


Legalization Impact Assistance Grants Under the Immigration


Reform and Control Act of 1986 - State of Florida" has been sent
 y office for review and response. The report generally 

reflects an accurate understanding of the situation .the state and 

the u. s. Family Support Administration (FSA) faced at the 

inception of implementation of the State Legalization Impact

to 

Assistance Grant (SLIAG) program. From the states perspective, 

it is important to note that FSA' s final SLIAG regulation had


only been released five months prior to the Inspector General'


review and the state' s application was not approved by FSA.


Since that time, both the state and FSA have made enormous


strides in implementing SLIAG. Below are our comments to the


various findings of this report.


Pulic Assistance 

Pindinq 1 : Florida' s planned modification of its


automated accounting system to control SLIAG

expendi tures and disbursements had not been 

implemented. 

Recommendation: Florida should complete its planned 

modification of the automated system to control SLIAG 

expenditures an disbursements. 

Comment: At the time of this review, the state had not 

modified its accounting system. However, this system 

is now operational and the necessary control of SLIAG

. expenditures and disbursements is in place. 

Pindinq 2 The necessary formal operating agreements

betw en the state, counties, and maj or providers t: yet been formalized.

containing the details for implementing SLXAG had not

IVED

JUL 2 11999 

SPECTOR 

OFFICE OF 

GENEF7 WINEWOOD BLVD. . TA LAIiASSEE FL 32399-700 

--- .....-.... """I' GRGOY L. COLE. SECRrIMY 
,. 

Recommendation: Florida should develop SLIAG operating


agreements with the counties and providers as soon as
 possible. 

Comment: As the report indicates, Florida was delayed


in developing SLIAG operating agreements with the


counties because of the application approval process.


Florida received a letter on July 11, 1988 approving


the states original FY 1988 application. However, this


application was amended with the 1989 application and


approval was not received until October 24, 1988.


Florida uses a formal contract agreement with the


counties and these agreements could not be executed


without an approved application.


The contract language for SLIAG was not developed at
 the time of this review. Today, we have executed 

contracts with the state Departent of Education and 

all but a few participating counties.


Pulic Health Assistance 

inding 3 The FSA' s definition of public assistance


ncludes some public health activities which creates


administrative and service delivery problems for


Florida public health agencies.


Recommendation: The FSA should reconsider its position


to classify certain pUblic health services as public


assistance and make appropriate adjustments to this
 position. 

Comment: Florida concurs with this recommendation. 

Our public health agencies are. still wrestling with this issue. Documenting public health costs to the 

individual defeats the purpose of public health 8ervice units. These units are to provide public health 

services to those in need in order to protect the

public from contagious health hazards. Asking 

immigration status of those requiring services sends a


different message to the public.


We understand that FSA is interpreting the Immigration 

Reform and Control Act of 1986 to the best of its abili ty, but action should be taken to correct this situation. Otherwise, States will shoulder the health 

costs of this federal amesty program. 

Finding 4 : At the time of the inspection, Florida had 

only broad, informal guidelines from FSA on the 

allowabili ty of SLIAG costs and the documentation 

requirements which it could share with the counties. 
. .

Recommendation: The FSA should issue written 

guidelines for determining and documenting SLIAG costs. 

In turn, Florida should ensure the dissemination of


information for determining and docuenting SLIAG 

program and administrative costs to the counties. 

Comment: Since this review, FSA has issued a detailed 

manual covering SLIAG cost documentation. A copy of 

FSA' s manual has been sent to participating counties and the Departent of Education. 

Findinq 5 . The - FSA application process created a numer of siqnificant problems for Florida. Also, the 

FSA' s application review process interfered with the States' a ability to plan for aervic8.. 

Delay in FSA issuing the implementinq regulation
 resulted in the state' a inability to properly plan 

for SLIAG. 

Numerous policy misinterpretations and disagreements 

resulted because the FSA had not provided definitive wri tten instructions to assist Florida in 

understanding SLIAG application requirements. 

The time frames for submitting the initial SLIAG


application, FSA review and comment, and revision of


the application process were too short.


The implementation of SLIAG-funded programs was 

delayed because of a siqnificant delay in notifying 

Florida of the qrant aw rd. 

There is no formal appeals process if program costs


are denied in the first level review.


Recommendation The FSA grant process ahould be made 

more orderly. Specifically FSA should: 

provide definitive written instructions on the SLIAG


application requirements and establish a dialogue


with Florida on SLIAG policy, compliance, and


reporting issues to minimize the confusion that


occurred in the initial application process;


ensure that sufficient time is allotted to the application process including Florida' s initial 

application, FSA' s review and formal comment,

Florida' s consideration of FSA comments ' and 

negotiation of disputes, and its submission of the 

revised application for FSA approval; 
.. 

develop an appeals process to use if program or


costs associated with providing services are denied


in the initial application process; and


revise the grant award process for approved


applications 80 that the notice of grant award


reaches Florida prior to the beginning of the fiscal


year. 

Comment: Since this review, FSA has established

wri tten instructions on the SLIAG application 

requirements, the review criteria and approval process. 

In addition, FSA has extended the FY 1990 application 

deadline to ensure states have sufficient time to 

submit their applications. The extension also allows 

states to document more cost, since the FY 1990 

application is based on actual FY 1988 recorded costs. 

FSA has been attentive to both federal and state needs 

in this area since the first application. 

The findings identified were real problems during the first


and second applications. We believe both FSA and states learned


a great deal as a result. Hopefully the FY 1990 application 

process will be a smooth one. 

Florida strongly suggests that this report be u.ed to inform 

Congress of the hardships states experienced in implementing SLIAG. states had little or no time to begin implementing SLIAG 

until applications were approved and grant awards were received 

let alone document costs. 

This report could be an effective tool to dissuade Congress 

from cutting SLIAG funding. States have incurred ,costs but due 

to slow implementation on the Federal level, states have not been 

able to show costs when the first report to Congress was due. 

Thank you for the opportunity to comment on this draft report. Should you have any questions, please contact me or Gary 

Crawford at (904) 488-3791 

With kind regards, 

istrator 

NKW: cym