, . ., ,. ,

,n. ' 

IMPLEMENTATION OF THE STATE


LEGALIZATION IMPACT ASSISTANCE


GRANTS UNDER THE IMMIGRATION


REFORM AND CONTROL ACT OF 1986


COMMONWEAL TH OF MASSACHUSETTS

t.RVICESO ll.r 

'0 

1t"":fQ 

OFFICE OF INSPECTOR GENERAL 

OFFICE OF ANALYSIS AND INSPECTIONS 

DECEMBER 1989 
OFFICE OF INSPECTOR GENERAL


The mission of the Offce of Inspector Genera (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 detect and prevent fraud, waste, and 

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

corrctive action. The OIG perform its mission by conductig 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 three 

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

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

This study was conducted to determne the effectiveness of the Commonwealth of 

Massachusetts' implementation of State Legalization Impact Assistance Grants funds awarded 

under the Imgrtion Refonn and Control Act of 1986. 

The report was prepard under the diction of Don McLaughlin, the Regional Inspector 

General of Region VII Office of Analysis and Inspections. Parcipating in this project were 

the following people: 

Kansas City San Francisco 

Hugh Owens, Project Leader Apryl Wiliams 

Raymond Balandron 

James Wolf 

Headquarters New York 

Albert J. Nace Lucile M. Cop 

Debra Robinson 

Alicia Smith 
. I 

IMPLEMENTATION OF THE STATE


LEGALIZATION IMPACT ASSISTANCE


GRANTS UNDER THE IMMIGRATION


REFORM AND CONTROL ACT OF 1986


COMMONWEALTH OF MASSACHUSETTS

Richard P. Kusserow 

INSPECTOR GENERAL 

OAI-07-88-00447 DECEMBER 1989 
EXECUTIVE SUMMARY 

PURPOSE 

The purose of this inspection was to determe how effectively the Commonwealth of 

Massachusetts implemented the State Legalization Impact Assistance Grants (SLIAG) 

progr, to identiy potential problems early in the process, and to identify good practices 

which all States could shar The Commonwealth of Massachusetts is referred to as "State" in 

this report. 

BACKGROUND 

The SLIAG program was established under the Immgration Reform and Control Act (IRCA) 

of 1986 to reduce the fmancial burden of providing public assistance, public health assistance, 

and educational services to eligible legalized aliens. In Fiscal Year (FY) 1988, $928.5 milion 

in program funds were allocated to States, and funds wil continue to be alocated through 

FY 1991. These funds also cover administrative costs for implementing SLIAG at the State 

and local levels. Payments are made for public assistance activities generally available to all 

. needy individuals and public health assistance services offered under the States' public health 

programs. The payments also cover educational services designed to assist eligible legalized 

aliens to attain a satisfactory level of performance in school and to achieve English language 

proficiency and citizenship skils necessar to become pennanent residents. The Family 

Support Administration (FSA) is responsible for administerig the program. 

Because SLIAG was a new program, FSA realized that problems would surface early in its 

implementation. In addition to the normal difficulties encountered in creating new processes 

and procedures, FSA recognized that SLIAG would have unique problems. Some of these 

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

barers associated with the service population, maintaning confidentiality of information, and 

the extremely short time frames for the grt award process. 

METHODOLOGY 

In response to the anticipated diffculties with implementing SLIAG, FSA requested that the 

Office of Inspector General (OIG) conduct reviews in 10 States to determine the progress of 

States ' implementing this progrm. The FSA selected nine States and the Distrct of Co1 umbia 

because of the varety of programs they offered, the number of eligible legalized aliens in the 

population, or the amount of the grant award. The nine States ar Arizona, California, 

Colorado, Florida, llinois, Massachusetts, New York, Texas, and Washington. 
Interviews based on strcturd discussion guides for each major program ara, as well as 

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

this report. This report represents the review conducted in Massachusetts and reports on its 

implementation of the SLIAG progr as of August 1988. 

Both FSA and Massachusetts were commtted to identiying problems and developing 

innovative and effective solutions for them. Immediately following our on-site visits, FSA 

was given an outline of the State concerns identified in this report. 

1987 FSA has held national conferences and issued information to 

States on implementing the SLIAG program. 

FINDING: Since 


The FSA held several national conferences beginning in 1987 to share 

infonnation 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 Immigration and Naturalization Service (INS). 

FINDING: Massachusetts established a structure to identify organizational and program 

needs, and to adapt existing resources for SLIAG purposes. 

The heads of each deparment involved in implementing SLIAG programs held 

meetings with the Office for Refugees and Immigrants, and have designated 

specific persons for SLIAG implementation and admnistration. There was a 

good working relationship among all paricipating agencies. 

The State s Executive Order Number 257 prevents agencies from requesting and 

disseminating information on citizenship status unless required by Federal 

statute. Questions on citizenship status have been removed from all applications 

for services and benefits. The State is moving to implement the SLIAG program 

with these restrctions.


FINDING: Massachusetts also took steps to document expenditures and control 

disbursements. 

Massachusetts has recently implemented the Management Account Reporting 

System. This system provides for a unifonn reporting capabilty and wil be 

used by the Deparent of Education to document costs identifiable to specific 

eligible legalized aliens. As par of this system, the Office for Refugees and 

Immigrants can access the Deparent of Education s SLIAG account to 

monitor distrbution of funds and identify any excess funds that may have 

accumulated. 
Neverteless, there were some fuds contrl vuerabilties. 

FINDING: The FSA' definin of publi assistle includs some public health assistance activies whih creatd adinitratve an serve delivery problems for 

Massachusetts publi healh agencies. 

FINDING: Conflicting interpretans oftl term "publi clue" and "permanently 

residng under color of law hi caused unertntis for alns as to wht serves they are 

entiled to receive without fear of deportn. 

FINDING: The FSA appliatn reviw process creatd a number of signifant problems 

for Massachusett. Also, the FSA' appliatn reviw process interfered with the Stat' 

abilit to plan for serves. 

Delay in FSA issuing the implementig regulation resulted in the State 

inabilty to properly plan for SLIAG. 

Numerous policy misinterpretations and disagrments resulted beause FSA 

did not provide definitive wrttn instrctions to assist Massachusett in 

understading SLIAG application reuiements. 

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

review and comment, and revisions of the application. 

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

signcant delay in notiyig Massachusett of the grt award. 

No formal appeals process exists ifprogrs or costs ar denied in the first level 

review. 

FINDING: At the tie of th inspection, Massachusett Iu not received formal guidlines 

from FSA on determining and claing SUAG adinistratve costs, and Massachusetts 

had not developed methods for determining and documenting these costs. 

FINDING: The Stat Deparents of Publi Welfare and Public Health and the Bureau of 

Adult Educaton had not estalished methods to document costs for servces and benefits 

provided to indvidual eligible legalized aliens. 

As mentioned earlier, FSA and Massachusett have alady initiated action on some of the


recommendations mad in ths report. Steps have ben taen by FSA to provide States with


more speifc, formal guidelines for identig and documentig actual program and

adstrative costs. However, adtional actions ar necessar in other aras on the par of 

FSA and Massachusett. 

RECOMMENDATION: The FSA should reconsir its positn to classify certain public 

health servces as publk assistace an nu appropri adjustments to this positon. 

Several programs admnistere by the Deparent of Public Health 

considere as public assistace for SUAG purses. This crates a burden on 

public health agencies who, for the fit tie, ar reui to identify individual 

eligible legalze alens. 

RECOMMENDATION: The FSA and th INS should further clafy whl is meant by 

public chae" and ''prnuuumtly residng umkr color of law," and widly disseminate 

this informaton to alens who have raied concerns abut their residnt stas. 

RECOMMENDATION: The FSA should mak its applkaton and grant award process 

more orderly. Specifally, FSA should 

provide defiitive wrttn instrctions on the SLIAG application reuiments 

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

reportg issues to mi the confsion that occur in the intial application 

process; 

ensur that sufficient tie is allott to the application process includig 

Massachusetts' intial application, FSA' s review and for commnt, 

Massachusett' consideration of FSA comments and negotiation of disputes, and 

its submission of the revise application for FSA approval; 

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

servces ar denied in the initial application process; and 

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

grant awar reaches Massachusett prior to the begiing of the fiscal year. 

RECOMMENDATION: The FSA should issue writtn guilines for determining and 

claiming administratve costs. Also, Massachusetts shoul develop methods for determining 

and documenting these costs. 

RECOMMENDATION: The Sta Deparents of Publk Welfare and Public Healh and 

the Bureau of AduU Educatn should develop a process or methodology to identify and 

document costs for servces and benefits to indiviua eligible legalized alens. 
COMMENTS 

The FSA and Massachusett both commente on the drt report The comments ar included 

in Appendices B and C. resptively. 

The FSA generaly agr with our fidigs and reommendations. The State. however, took 

exception to many of the statements mad in the report Neverteless, both repo having 

taen a number of steps to improve implementation of SUAG. Where appropriate, we have 

moded the report bas on their comments. 
................................... .......... ........... ....................... ....................................................................... ............... ... .... ...... .... ..... 

TABLE OF CONTENTS 

EXECUTIVE SUMMARY


I NTR 0 D UCTIO N II........ II........ 1


M ETHO DOLOG Y ................ ..... .... .... ........ ... ...................118...... II.................... 


PU RPOSE .... ......... ....... 1


BACKG ROU ND ..................... ................... ......... ............ ......... .... ...... ....... ... 1


MASSACHUSETTS' ORGANIZATIONAL STRUCTURE............. .................. 3


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


PU B LIC ASSISTANCE . ........ ... ....... ....11................... ...lIlIa...e...... ...... II.......... ... 5


PUBLIC HEALTH ASSISTANCE................................................ 6


ED U CA TI 0 No.. II II.. II II.. II".. II II.. II II.. II II III II II.. II II.. II... II II.. II II.. II II.. II II.. II II.. II 11..8..... II... ".. tI"8................. 9


CROSSCUTTING ISSUES ...............""..8..............11...........",,11....... a."I1.......... 1 0


APPEN DIX A. ...........1111........ ...................... a. ....... ".8. .1111............. .... A - 1


APPEN DIX B ............................... ................................ ......... ..11. ..11. ... ... ..... .... B­


APPENDIX C................ ................................ ..... ...........11....... ..... .11...... ........... ..... .... C - 1

INTRODUCTION


PURPOSE 

The Famy Support Admstrtion (FSA) reueste that the Ofce of Inspetor General 

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

effectivenly the States implemente the State Legalzation Impact Assistace Grats (SLIAG) 

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

inspection included reviewing mehansms in place to identi these funds and determg 

whether present or projecte policies and proedurs ader to FSA guidelies. The FSA also 

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

which al States could shar. 

Ths report presents the results of the inspetion perting to the Commonwealth of 

Massachusetts, referred to as "State 

BACKGROUND 

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

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

status). 

Ths new population wi incrase the demad for State public assistace and public health 

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

services as these new residents obta English language and civic skis nee to become 

S. citizens. 

To help States defray many of the costs of providig public assistace, public health 

assistace, and educational servces to eligible legalize alens, IRCA authorize $1 bilion 

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

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

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

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

the Fedral Government of providig these servces or benefits to those few legal aliens 

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

To reeive SLIAG funds, States must apply to the FSA Division of State Legaltion 

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

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 used to 

determe costs and veri actual costs. 

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

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

be the same ones avaiable to the gener public. States canot crate new program in these 

areas speifcaly for eligible legalze alens. However, States may crate new or adtional 

education progrs for eligible legalze alens. States may also clai reimbursement for 

progr adstrtive and SLIAG adstrtive costs. 

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

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

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

alen. Detennng progr adstrtive costs is mad in accordce with the fmal 

regulation at 45 CP 402.22. 

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

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

norm diculties encountere in cratig new processes and proedurs, FSA reogn 

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

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

servce population, maitag confdentialty of inormation, and the extrmely short time 

fres for the grant award process. 

METHODOLOGY 

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

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

amount of the grt. The nie States ar Arna, Caorna, Colorado, Florida lllinois, 

Massachusetts, New York, Texas, and Washigton. Ths report reviews Massachusetts 

implementation of the SLIAG progr as of August 1988. 

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

major program activity at the State and local levels. We held on-site discussions with 

representatives frm the Offce for Refugees and Imgrts; Deparnt of Public Health; 

Offce of Communities and Development; Deparnt of Education, including potential 

providers; and Deparent of Public Welfar. 

The visits were coordinate by sta frm the Ofce for Refugees and Imgrts. Pror to 

the visit, materials supplied by the Ofce for Refugees and Immgrts wer reviewed as well 

as the application that was approved by FSA. Materials supplied by respondents were also 

reviewed. 
. , , ;

MASSACHUSETTS' ORGANIZATIONAL STRUCTURE


The Offce for Refugees and Imgrts has ben designate as the single point of contact. 

Organzationaly, the Offce for Refugees and Imgrts is in the Executive Ofce of Human 

Servces. The Ofce for Refugees and Imgrts alocate cert percentages of its 

executive and fiscal sta salares to SLIAG adstttion, in relation to the tie spent on 

SLIAG. Direct SLIAG prgr sta ar fuly chared to the grt. 

The Deparent of Public Health is alo with the Executive Ofce of Hum Servces. 

Loal health servces ar adstere by local boar of heath, with the overa 

responsibilty resting with the State. In the State, there ar few muncipal health deparents 

and no county health deparnts. The Deparent of Public Health has regional and distrct 

health offcers who maita a liaison role with individual boards of health. 

The Deparent of Public Welfar is also locate in the Executive Offce of Human Services. 

There ar 63 local offces arund the State. Overa responsibilty rests with the commssioner. 

The Bureau of Adult Education is the responsible entity for SLIAG-fude educational 

progr. It is locate in the Deparnt of Education which has ful jursdction for 

education at the local level. 

The Division of Housing is par of the Executive Ofce of Communities and Development. 

This Division is responsible for progrs to assist individuals and famies which requir 

housing and energy assistace.

FINDINGS AND RECOMMENDATIONS


Both FSA and Massachusetts were commtted to identiying problems and developing 

innovative and effective solutions for them. Immediately following our on-site visits, FSA was 

given an outline of the State concerns identified in this report. 

1987 FSA has held national conferences and issued information to 

States on implementing the SLIAG program. 

FINDING: Since 


The FSA held several national conferences beginning in 1987 to share 

infonnation 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 Immgration and Naturalization Service (INS). 

FINDING: Massachusetts established a structure to identify organizational and program 

needs, and to adapt existing resources for SLIAG purposes. 

The heads of each deparent involved in implementing SLIAG programs have 

held many meetings with the Office for Refugees and Immigrants, and have 

designated specific persons responsible for SLIAG implementation and 

admistration. There was a goo working relationship among all parcipa ting 

agencies. 

The State s Executive Order Number 257 prevents agencies from requesting and 

disseminating information on citizenship status unless required by Federal 

statute. Questions on citizenship status have been removed from all applications 

for services and benefits. The State has diected resources to obtain the 

necessary progrm information and is moving to implement the SLIAG program 

despite these restrctions.


FINDING: Massachusetts also took steps to document expenditures and control 

disbursements. 

Massachusetts has recently implemented the Management Account Reporting 

System. This system provides for a unifonn reportng capabilty and wil be 

used by the Deparent of Education to document costs identifiable to specific 

eligible legalized aliens. As par of this system, the Office for Refugees and 

Immigrants can access the Deparment of Education s SLIAG account to 

monitor distrbution of funds and identify any excess funds that may have 

accumulated. 
Neverteless, there were some fuds contrl vuerabilties. Findigs and reommndations 

concerning these vulnerabilties follow under major topic aras. 

PUBLIC ASSISTANCE 

Assistance or Serve Activis 

The Deparent of Public Welfar sought SUAG reimburment only for General Relief and 

Medcaid. Contrtors/providers may supply employment and retring servces, day care 

servces, and medcal car for the unsur eligible legalze alens. There were no new 

progrs established beause of SLIAG. 

Housing and related progr adstere by the Executive Offce for Communties and 

Development ar include in the servces avaiable to eligible legal alens. The Fuel 

Assistace Prgram curntly supplements Fedra appropritions. To be eligible, the alens 

income must not excee 175 percent of the povert level. The Executive Ofce for 

Communties and Development was experiencing diculty in determnig benefits, 

espeialy in the low income home energy assistace progr. The usual proedure would be 

to review the enti household, but if one or more individuals but not the tota famy unit falls 

into the eligible legalze alen category, benefits for the individuals wi be diffcult to 

determe. 

The Gateway Cities Municipal Grats progr is also with the purew of ths offce. It 

was a new program in FY 1987 and was fully operational in FY 1988. The tagets are all 

immgrants and newcomers regardless of alen status. 

The Executive Offce for Communities and Development has not fully implemented the 

SLIAG porton of its progr beause of insufcient gudace frm FSA. 

Documentaton of Eligible Legalized Alien Stas 

Public assistace program wi use the same application proess for eligible legalze alens 

as ar used for al individuals reuesting servces. Ths includes the usual social work 

intervention and verication process. For General Relief, citizenship status is not requested, 

but verication of State residency is perfonn In the Medcaid progr, a retractive match 

search occurs before clai ar mad for eligible legalze alens; but there is not a "citin 

field, which is par of the computer fIe. 

The Deparent of Public Welfar has not established a fonnal system to identify individual 

eligible legalize aliens due, in par, to the Executive Order s prohibition of discation 

based on alen status. 
:j. ;.....

, c' " 

Program Costs 

The eligible legalize alens wi abide by the sam progr gu lines as other reipients. 

Eligibilty for program servces wi be veried every six months. Vouchers for 

reimburment of servces for eligible legal alens wi come into the State centry and 

pass thugh normal edts and scns, with utization review a par of ths process. 

Administratve Costs


The Deparent of Public Welfar has its own indit cost rate established by the U. 

Deparent of Health and Human Servces (HS). For budget purses, the State estiate 

adnistrative costs and the number of eligible legalze alens who would access servces. 

Ths estiate was done beause there was no history on the population or a qualty control 

sample frm which costs could be projecte As a benchmark, the curnt legal resident 

alens' use rate was determed and a cost alocation formula use bas upon a percentage of 

the case load. It was felt that the smal estited case load of eligible legalze alens did not 

make it cost effcient to mod the present accountig system. 

Drawdown of Funds and Cash Balanees 

The Offce for Refugees and Imgrts wi drw SLIAG Fedra funds for public assistace 

each quarer, with reimbursement being procsse thugh the State treasurer s offce and 

deposit ditly to the State s genera fud. In effect, drwdown wi replace those State funds 

alady expende for SLIAG-relate servces. 

PUBLIC HEALTH ASSISTANCE 

Assistanee or Serve Activities 

The Deparent of Public Health wi provide the followig public health assistace services: 

emergency medcal servces coodiation


uncompensate car,


community health centers, 

preventive denta car, 

famy health progrs, 

envionmenta health, 

health care qualty, 

alcohol and drg abuse prevention, 

AIS screenig and tratment, 
immunizations,


Healthy Star Program,


handicapped childrn


lead poisoning prevention, 

tuberculosis screening and tratment, 

sexually transmitted diseases screening and 

treatment, and 

Gateway Cities Municipal Grants. 

The State had not established any new programs because of SLIAG funding. The Healthy 

Star Program is the newest program and has existed since FY 1986. Although listed in the 

public assistace porton of the State s SLIAG application, the program is within the 

operations of the Deparent of Health. 

All of the chronic care hospitals are State-owned and State-operated, and under the 

Deparent of Public Health's supervision. The intake workers in the Healthy Star and the 

handicapped childrens programs are State employees. The deparment contracts with the 

Women, Infants, and Childrens Program; community health centers (private organizations); 

alcohol and. drg programs; and family health centers to provide public health assistance 

services. With regard to AIDS, the State provides outrach services and case management, 

and contracts for residence and hospice car. 

Documentation of Eligible Legalized Alien Status 

The Deparent of Public Health has not established a formal system to identify individual 

eligible legalized aliens because of the Executive Order that prohibits discrination because 

of alien status. The deparment feels they need more guidace in establishing a mechanism to 

retroactively identify the eligible legalized aliens. 

Program Costs 

Both State agencies and contractors/vendors are reimbursed after costs have been incurred, 

without any advance funds being paid. Most contractors ar expected to report expenses on a 

biweekly or monthly basis. Invoices ar submitted indicatig claied costs and ar reviewed 

by audit deparment staff located at the executive level. 

The Offce for Refugees and Immigrants wil drw SLIAG funds each quarer to the State 

treasurer s offce. For SLIAG reimbursable services, deposits ar made directly to the State 

general fund, since the services have been funded under the State s Appropriation Act. For 

contracts with private vendors, requests for proposals wil be wrtten and wil be treated as a 
.. . , .. . - u 

local grant. A portion of the State s cost of such programs is reimbursed from SLIAG. 

However, there are no service contracts or grants diectly attached to SLIAG funds. 

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

assistance activities which created administrative and service delivery problems for 

Massachusetts' public health agencies. 

If a progr or service is considered public health, the population ratio method for 

establishing costs can be used. However, where the public health progr is considered 

public assistace, a new burden is imposed upon the public health agencies which must 

develop and implement new procedures for identifying individual eligible legalized alens to 

document costs. Severa progrms administered by the Deparent of Public Health and 

Division of Housing ar considered public assistance progrs for SLIAG reimbursement 

puroses. To satisfy the needs of the SLIAG application, programs within public health were 

split between public health assistance and public assistance. Although this breakout is based 

on Federal guidelines, the deparment feels that it is an arcial definition. Agency staff 

offcials are also concerned that asking individuals about legal status wil seriously afect their 

accessing public health available services. 

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

health services as public assistance and make appropriate adjustments to this position. 

Administrative Costs


The Deparent of Public Health has its own indiect cost rate established by the HHS. 

Administrative costs for FY 1989 are expected to be 1.5 percent of tota expenses. 

Reimbursement for public health administration wil be distrbuted in proporton to program 

costs. Since there was no history on this population or a sampling conducted, the State 

estimated the number of people who wil access the services as well as the administrative 

costs. 

Drawdown of Funds and Cash Balances 

Quarerly, the Offce for Refugees and Imigrants wil draw SLIAG funds to the State 

trasurer s office. For SLIAG public health services, reimbursement wil be deposited directly 

to the State s general fund. 
:_ ,,,

EDUCATION 

Assistance or Service Activities 

Educational activities wil center around adult education and fall under the jursdiction of the 

Deparent of Education s Bureau of Adult Education. English as a Second Language classes 

and citizenship classes wil be offered to eligible legalized aliens. No new programs have 

been established, but there are plans to expand the existig programs and to negotiate 

contrcts with new providers. 

The majority of curnt services ar provided by contrctors. These include basic adult 

education and kidergarn though grde 12 equivalent coures, coures in secondar 

education leading to a Genera Equivalency Diploma, native language courses considered a 

precuror to classes in English as a Second Language, and grants given to local school boards. 

In addition, the deparent provides services and tutorig programs in correctional facilities, 

but neither of these wil be claimed as par of the SLIAG progrm. 

Documentation of Eligible Legalized Alien Status 

The actual system to identify eligible legalized aliens had not been implemented as of the 

review period because the Deparent of Education had not yet issued its request for 

proposals for SLIAG-funded classes. The bureau indicated that it is waiting to receive 

guidance as' to what system wil be acceptable. Adaptation of the currnt enrollment system 

wil be made by checking alien card numbers and adding pertnent questions at intake. 

In the absence of an overal list of eligible legalized aliens, contrcts wil be made with 

vendors on "good faith" using application projections from a statewide data base. Moreover, 

the currnt refugee policy is bound by the Executive Order covering aricles on 

nondiscrination which prevents agencies from requesting and disseminating information on 

citizenship status unless required by Federal statute. All applications in use have these 

questions deleted. Therefore, education agencies also have not established a formal system to 

identify individual eligible legalized aliens. The Deparment of Education, however, feels that 

it wil be able to document outcomes through its performnce-based contracts. The overall 

accounting system to monitor the accounts for all the programs has not been finalized. 

Massachusetts has relied almost entirely on service population estimates provided by the 

Immgration and Naturalization Service, the U.S. Deparent of Health and Human Services, 

qualified designated entities, and unserved number estimates. As a resident of Massachusetts, 

the seasonal agrcultural worker wil be eligible for all services. 

Program Costs 

The Deparent of Education had not established guidelines for identifying eligible legalized 

aliens and determining program costs. 
. . 

. .. .

Administrative Costs 

The Deparent of Education s indiect cost rate is 10 percent and was established by the 

Deparent of Education. The guidelines for determning actual admnistrative and program 

costs have not been fmalized. It is anticipated that the bureau wil use a performance-based 

formula in contracting with providers. 

The Deparent of Education had stated that its actual admistrative costs for the education 

progrs wil far exceed the 1.5 percent ceilng permtted under SLIAG. 

Drawdown of Funds and Cash Balances 

Based on previous experience with education contractors, cash advances ar an uncommon 

practice. Community-based organizations might request an advance, but it would be a 

minimal advance payment In discussions, potential vendors revealed that advanced funds 

would be needed for publicity. 

The accounting system wil not have to be moded. The curent Massachusetts Management 

Account Reportng System is an effcient and unifonn reportng system. The decision as to 

whether the Office of Refugees and Immigrants or the Deparent of Education wil draw 

education-related SLIAG funds into the State trasurr s office has not been made. The funds 

wil subsequently be transferred into an account in the Deparent of Education. Since 

educational programs do not have 

State-appropriated funds, SLIAG funding must be available up front to allow the Bureau to 

spend on progr activities. 

The automated account in the comptroller s offce allows the Offce for Refugees and 

Immgrnts to monitor balances by accessing the account with the Office of Human Services 

special code. Allocations which are not spent for educational programs would raise questions 

about the need of the service or its low enrollment. 

CROSSCUTTING ISSUES 

FINDING: Conflicting interpretations of the terms "public charge and "permanently 

residing under color of law" have caused uncertainties for aliens as to what services they 

are entitled to receive without fear of deportation. 

The single point of contact agency indicated that varous interpretations and a great deal of 

confusion had centered around the meaning of "public charge." Not having a clear 

understanding of "public charge" places the single point of contact agency or the local 

staff-level person at a disadvantage and may jeopardize the individual' s status as an eligible 

legalized alien. 
Also, the definition of "permanently residing under color of law" was confusing to the 

agencies. This category is open to interpretation and is also confusing to eligibilty workers, 

because varous programs may treat this definition differently. 

RECOMMENDATION: The FSA and the INS should further clarify what is meant 

public charge" and "permanently residing under color of law," and widely disseminate 

this information to aliens who have raised concerns about their resident status. 

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

for Massachusetts. Also, the FSA's application review process interfered with the State 

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 disagreements resulted because FSA 

did not provide definitive wrtten instrctions to assist Massachusetts in 

understanding SLIAG application requirements. 

. The time frames were too short for submitting the initial SLIAG application 

review and comment, and revisions of the application. 

Implementing SLIAG-funded programs was delayed because of a significant 

delay in notifying Massachusetts of the grnt award. 

No formal appeals process exists if progrms or costs ar denied in the first level 

review. 

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

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

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

Massachusetts submitted its first application on May 12, 1988, and a revised application on 

June 14, 1988, which was approved on June 23, 1988. At the time of the review in August 

1988, the grant funding had not been awarded. This delay parcularly impacted educational 

progrs since Massachusetts had not allocated State funds for these programs up front. 
, ,:,. :

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

more orderly. Specifcally, FSA should 

provide definitive wrtten instrctions on the SLIAG application requirments 

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

reportng issues to minimize the confusion that occured in the initial application 

process; 

ensur that sufficient time is allotted to the application process including 

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

Massachusetts ' 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 programs or costs associated with providing 

services are denied in the initial application process; and 

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

grant award reaches Massachusetts prior to the beginning of the fiscal year. 

FINDING: At the time of the inspection, Massachusetts had not received formal guidelines 

from FSA on determining and claiming SUAG administrative costs, and Massachusetts 

had not developed methods for determining and documenting these costs. 

The State Deparments of Public Welfare and Public Health, as well as the Bureau of Adult 

Education, recognize the need for capturng admnistrtive costs. However, as of the time of 

the review, they had not developed methodologies to do this. 

The agencies indicated that there is a need for fonnal guidelines dealing with acceptable 

methods of documenting admnistrative costs. The agencies felt that adequate guidelines did 

not exist for them to determne alowable SLIAG admnistrative activities. 

However, Massachusetts agencies must recognize that there are limits on the diections that 

FSA can provide. Guidelines must be flexible enough to accommodate varations in State 

systems and internal processes. Ultimately, Massachusetts, as the grantee, is responsible for 

developing and implementing SLIAG program activities, and for documenting administrative 

costs and expenditures. 

RECOMMENDATION: The FSA should issue written guidelines for determining and 

claiming administrative costs. Also, Massachusetts should develop methodsfor determining 

and documenting these costs. 
FINDING: The State Departments of Public Welfare and Public Health and the Bureau of 

Adult Education had not established methods to document costs for services and benefits to 

individual eligible legalized aliens. 

Although each agency realzes the importance of determning eligible legalized alen status at 

intake, the curent philosophy of Massachusetts is to serve al those who qualfy for the 

services requested. This philosophy is reinforced by the curent Executive Order which 

prohibits discrimiation against State residents because of alien status. Because of this 

Executive Order and some progrs being shifted to other agencies for SLIAG purposes, the 

agencies had not developed a system to document costs for services and benefits to individual 

eligible legalized aliens. However, the Executive Order s arcle on nondiscrimination does 

contain a provision allowing citizenship information to be requested for Federal purposes. 

RECOMMENDATION: The State Departments of Public Welfare and Public Health and 

the Bureau of Adult Education should develop a process or methodology to identify and 

document costs for services and benefits to individual eligible legalized aliens. 
. . ..

OIG RESPONSE TO COMMENTS 

The FSA and the Commonwealth of Masachusett both commente on the drt report. 

The FSA 

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

has taen a number of steps to improve implementation of the SLIAG progr includig 

claryig program policies and prours, as well as gudace on establishig and 

documentig admstrative and progr costs. 

The FSA questioned the statement that the new population would signifcantly increas public 

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

I of alens would qualy to access the SLIAG progr. The report reogn that inonnation 

obtaned durg the review determned that substatial incrases in workload and 

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

reent discussions with States' offcials that demand for services nationaly is falg behid 

earlier projections. 

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

adstrative and servce delivery problems for Masachusett' public health agencies. The 

OIG recommended that FSA reonsider ths position. The FSA replied that they se ths 

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 stewards of 

public funds. 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 specifc eligible legalze alens is burdensome to the States and, in many 

cass, would reuir considerable revisions to the States' system or statutory requirments. 

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

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

positive effort to enhance cost effectiveness without reuirg States to develop new systems 

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

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

services by the eligible legalze alien population bas on infonntion alady obtaned from 

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

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

would not be required to establish new or elaborate systems. 

We reognze FSA's effort in cooperation with the INS to assist the States in learing more 

about the INS policy on public charge issues. 
. . 

. ,

We report that no for appeals proess exists if progr costs ar denied in the fIrst level 

review. We agree with FSA' s statement that the Grat Appeals Board dos have jursidiction 

over matters for witholdig and repayment of SLIG fuds. However, it was the States 

concern that an effective appeals mechansm be in plac for issues involvig progr 

costs at the fIrst level of FSA' s review in the application pross. 

The FSA mad numrous comments to clar cert mattrs of fact, policy, or procedur. 

We have include these commnts verbati in Appendi 

The Commonwealh of Massaehusett 

The State took exception to may of the statements ma in the GIG report Their comments 

are include verbati in Appendi C. Neverteless, since the ti of the on-site review, the 

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

procedur and system changes. Masachusett, along with other States, has worked with INS 

and HHS and made signcant effort to clary the "public chare" issue, which has been a 

deterrent to eligible legalze alens in accessing servces. 

The State also clared severa policy and proedur aras as well as its organational 

strctue descrbe in the drt report We have mad some modcations in the report based 

on their comments. 
, 

APPENDIX A


GOOD PRACTICES

A number of practices have been identified that other States could share. 

Massachusetts has implemented a new unifonn reportng system for education progrs. 

Ths system appear effcient and wil provide the basis from which costs can be captured 

for eligible legalizd aliens, and reports submitted timely. 

The Offce for Refugees and Immgrts has developed a methodology of monitoring 

funds allottd to the Deparent of Education. An automated account in the comptrller s offce permts the Offce for Refugees and Imgrts to access the Deparent 

of Education s SLIAG account with an Offce of Human Services ' special code. This 

process permts the Offce for Refugees and Immgrants to determne if SLIAG funds are 

being disbursed as planned or if excesses may have accumulated. 

The Offce for Refugees and Immgrts took the initiatve to hold numerous meetings 

with heads of involved State deparents. This faciltated effective communications and 

education toward implementation and dissemination of program provisions. The 

deparents' assignment of designated staf to work with the Deparent for Refugees 

and Imgrants also was an important step. 
APPENDIX B


FAMIL Y SUPPORT ADMINISTRATION'S COMMENTS

, 

;.. . ,.. .. ..w.., 

DEPARTMENT OF HEALTH & HUMAN SERVICES	 mily Support Administration 

September 22 t 1989	 Memorandum 

Dilte: Acting Assistant Secretary 

for Family Support 

From: 

OIG Draft Report: Implementation of the State Legalization 

Impact Assistance Grants Unde the Immigration Reform and 

Subject: Control Act of 1986 - State of Massachusetts (OAI-07-88­

00447) 

To:	 Richard P. Kusserow 

Inspector General 

Attached are the Family Support Administration comments on


the above report. Many of our comments are technical 


nature due to the complexity of the legislation and the


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


review. 

We appreciate the assistance and cooperation we have 

received from you in response to our request to conduct this 

round of reviews of the SLIAG program. The reports we 

received are very useful to us in understanding how States

are impl emen Eing the program. 

t. ' L-.
 I ,
 0(/ 'f l ' A .v. 

Cal erine Bertini 

Attachment 
. .. ..

OIG DRA REPORT: 

Implementation of the state Legalization Impact Assistance
 Grants 

Under the Immigration Reform and Control Act of 1986:
 MASACHSE'S 

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, co ents 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 

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 t at a backlog of public


heal th needs existed and were identified during the medical


examinations required of all applicants for legalization.


However, there is no data to suggest that, other than this


temporary bulge in demand for public health services, newly


legalized aliens will generate a significant increase in demand


for public health assistance or public assistance services.

. .

:::r;... Page 2 (Background) -- The draft report says, ns't:::' '; lt'1st


develop a method acceptable to FSA for determining 

administrative costs. The final report should note that 

several methods for determining the share of administrative 

costs in ongoing programs that are allocable to SLIAG and which 

are acceptable a Driori are specified in the regulation at 45 CFR

402. 22 (b). The process of determining SLIAG administrative costs 

(those costs incurred in administering the SLIAG grant itself), 

like all costs associated with administering HHS grants, is 

governed by 45 CFR Parts 74 and 92 and relevant OMB circulars. 

Findinas 

Finding:	 Since 1987, FSA has held national 'conferences and 

issued information to States on im lementing the SLIAG 

program. 

Comments: Since the OIG' s onsite visits ' in August 1988, we have 

continued to provide assistance to States. . We have 

conducted several more workshops and meetinqs 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 

wi th states. 

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

public health activities which creates administrative 

and service delivery problems for Massachusetts. 
.

u . '= question how the definitions of public health and i.. r; public assistance create service delivery problems for


Massachusetts' public health agencies. By law and


regulation, all programs or activities under both


categories must be generally available. In practice,


this means that SLIAG funds are available only to


reimburse costs in ongoing, generally available 

programs. In most programs, immigration status is not 

a condition of eligibility. If the alien is eligible


for services, he or she would receive those services


regardless of whether they were reimbursed under SLIAG.


The final report should clarify this point.


The draft report notes that "there' is. no quarrel with 

the logic of FSA' s definition of p lic assistance


versus public health, " but does not explain why the OIG 

recommends that FSA reverse its logic. The finalreport should .explain that the regulatory definitions 

of public assistance and public health assistance are


based directly on IRCA.


Programs of public assistance are defined as programs


that "provide for cash, medical or other 

assistance.. . 9ned 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, FSA considers state or locally


funded programs that provide medical treatment to needy


individuals to be public assistance program. 

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-


B-4

.:;, ,. .

. !,. r. . c 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 Rare provided for the 

primary purpose of protecting the health of the 

general public" (45 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 IRCA.


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 numer 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

;\::

. 

FL,ding: 

Comments: 

popul3.' 1 ; 0- " :d:hod 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 assistance programs do not routinely collect 

information on immigration status but has found that 

these programs 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 legalized aliens. This system gives 

states information on the numer of newly legalized 

aliens participating in a program and" the cost of 

services to them. It is now available and allows 

states to establish costs for FY 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 

al ternati ve methods requires setting up new 

administrative mechanisms or checking the status of all 

program participants. 

We will continue to work closely with Massachusetts to 

develop methodologies to document costs for all 

programs in its approved applications . 

The FSA application review process created a numer of 

significant problems for Massachusetts. Also, the 

FSA' s application review process interfered with the 

state' s ability to plan for services. 

The draft report says that the time period for


submission, review, revision and approval of the


initial application was too short. We agree that it

. .. 

::. ::.:,? 

have been ' .., 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 I 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 state I s allocations. 

The draft report says that '"numerous policy 

misinterpretations and disagreements resulted because 

FSA did not provide definitive written instructions or 

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 tholding and repayment of funds. For other matters, 

the State may follow normal procedures for disagreeing 

with an aqency findinq. 

indinq:	 At the time of the inspection, the Commonwealth of 

Massachusetts had only informal guidelines from FSA on 

determininq and claiminq SLIAG administrative costs, 

and Massachusetts had not developed methods for 

determining and documenting these costs. 
.. 

C"D'r. ':s:	 Several metb,(" for detE-,:'" ' lC' :- ' ..hare 

administrative costs in ongoing programs that are


allocable to SLIAG and which are acceptable 	 a Driori


are specified in the regulation at 45 CFR 402. 22 (b) . 

Addi tional guidance is offered in the manual 

"Establishing and Documenting Actual Costs, " October 

1988, Modules 8 and 9. The process of determining 

SLIAG administrative costs, like all costs associated


with administering HHS qrants, is qoverned by 45 CFR


Parts 74 and 92 and relevant OMB circulars.


We would like to note that this comment applies to the 

draft report' s discussion under public assistance 

administrative costs and public health assistance 

administrative costs. We aqree wi the draft report' 

assertion that " (UJ 1 timately Massachusetts, as the 

qrantee, is responsible for... fiscal docuentation of 

costs and expenditures. 

Recommendations 

Recommendation: The FSA should reconsider its position to 

classify certain public health services as public assistance and


make appropri adjustments to this position.


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

definitions of public assistance and public health 

assistance is one of cost docuentation . States would 

like to use the population ratio method for all 

proqrams run by their health departents. The final 

report should clarify whether the OIG is recommendinq 

that we allow use of the population ratio in proqrams 

where, as discussed above, its use would likely 

overstate actual costs. 
:

.. ;g 

We .. . ;tieve that using . , populat?f.. i": ,?-t- hod nr all 

programs run by state health departments would be


inconsistent with our responsibility to exercise fiscal


responsibilities in establishing actual costs,


especially where ELAs are a small percentage of a 

State' 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 and the Immigration and Naturalization


Service (INS) should further clarify what is ' meant by "public 

charge" and "permanently residing under colo of law" : and widely 

disseminate this information to the alien population who have


raised concerns about its resident status.


Response:	 Under IRCA and the Immigration and Nationality Act, the 

INS alone is responsible for determining whether 

individuals are likely to become public charges. FSA 

cannot establish policy on this issue. Nor can FSA 

disseminate information directly to the alien 

population. INS' is precluded by IRCA from providing 

names and addresses of eligible legalized aliens to 

outside agencies.


However, we agree that it is important that all 

concerned know INS policy on the public charge issue. 

INS representatives have made presentations at 

virtually all of our workshops and conferences. 

these meetings, states have been able to ask questions 

and receive direct information from the INS. We have


communicated to states all information provided to us


by INS on this and other pertinent issues, and will

. ) 

f--. tiI?! , 0; ; t t'l. icy of dissem:i , ,.'t. ing any :t' !1t 

information that we receive. 

Recommendation: The FSA grant process should be made more 

orderly. 

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

grant process, but the specifics indicate that it is 

referring to the SLIAG application and grant award 

process. The language of the recommendation should be 

more specific. 

We agree that the application process should be


conducted in a more orderly fashio 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 


Additionally, we have encouraged states to submit as


early as possible any new programs, questions, or


issues, and have advised them that they may submit all


or portions of their applications at any time.


In order to reduce the possibility of


misunderstanding, we have advised states that we will


communicate all substantive questions and concerns on


their FY 1990 applications in writing, as was done for


B..10 
, 

.. 

States' era\.. "".'1' ::.:. We issued xt.ensive 

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 application process. . We 

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 wi thin the Department are open to 

States that disagree with decisions made during the 

course of application review. 

Recommendation: The State Departents of PUlic Welfare and 

Pulic Health and the Bureau of Adult Educat on should develop a 

process or methodology to identify and do ument costs for


services and benefits to individual eligfble legalized aliens.


Response: HHS has made a variety of options for tracking costs 

available to states. If it is not possible or cost


effective for States to base their SLIAG related costs


on an actual count of eligible legalized aliens


accessing services, states may opt to use the Cost 

Documentation System, the population ratio method (for 

public health assistance), or statistical sampling, or 

the State may suggest alternative methods to HHS. 
APPENDIX C


MASSACHUSETTS' COMMENTS

, . ..,

The CommonwE.alth of Massachusetts


Executivs OffIce of Hum?;; Services
 l.'i; 

Office For ReftJgses an:; Immi5'rcn:s


Two Boyl ton Street, 8oston , r'lassacr, usetts 02116 

MICHAE.L. 5. DUKA: 

GOV5:RNOR 

PHILIP W. JOHNSTON AREA CODE: (6 t 7) 

5E:CRETARV 727-7883 

DANIEL M. LAM 

CIRE:C'rOR September 21 , 1989 

Mr. Richard P. Kusserow 

Inspector Genera 

Office of the Inspector Genera

Deparent of Health and Human Servces 

Washington, D.C. 20201 

Dear Mr. Kusserow: 

Enclosed is our response to the draft inspection report entitled "Implementation of the State 

Legalization Impact Assistace Grats under the Imgrtion Refonn and Control Act of 

1986: Commonwealth of Massachusetts" issued by the Offce of the Inspector Genera (OIG) 

in June, 1989. This report presented findings from the OIG's visit to Massachusetts in July, 

. 1988. The inspection was intended to be broad in scope; its purose was to identify potential 

problems with SLIAG programs and to offer states general assistace at the beginning stages 

of SLIG' implementation. 

Unfortunately, the OIG review is of limited usefu1nes$ because it occured before the 

Deparment of Health and Human Servces issued offcial policy guidace regarding the 

claing of costs from SLIAG. Many o the ala fmdings result directly from this absence' of 

a clearly defined federal policy or directive regarding the implementation of cost claing 

methods. Since the tiIrc or the review, H:S poiicy gddace has been issued, Massachusetts 

has received official HHS approval for prog:'a-specific methods to identify SLIAG-related 

costs, and actual costs have been reported fer:he majority of these programs for Federal 

Fiscal Year 1987 and 1988. 

Further, t.'1e OrG drt report includes a number of specific findings and other statements 

contaning errors of fact. We appreciate the opportnity to identify these errors, and to present 

infonnation to clary the issues. We hope that you will incorprate this infonnation into :,'our 

final report, 

Please do not hesitate to call me if you have any qUJstions. (\ 

v Sincerely


I I ' I


1\\ 2)L
 '-a."1iel M. 

uirec;:)r 

Enclosure 

C.. 
COl\1MENTS 

TO DTIAFT OIG REPORT ON 

SLIAG IMPLEMENT A TION 

IASSACHUSETTS 

September. 1989 

OIG Statement: Backeround (Executive Summary. "Oaee i)


. The /SUAGj payments also cover educational services designed to assist eligible


legalized aliens to attain a satisfactory level of performnce in school and to achieve


English language proficiency and citizenship skils necessary to become permnent


residents.


Massachusetts Comment 

. Uncer the Imgration Refonn and Control Act and SLIAG reguations, allow ble 

educational servces are much broader than this. States may pay for serces descrbed in 

the Adult Education Act delivered to eligible legalze alen (E) adults not enrlled in 

school, up to a specifed average dollar amount. For Federal Fiscal Years 1989 and 1990 

Massachusett has chosen to prioritize the use of ts SLIAG funds to provide English as a 

Second Laguage (ESL) and Civics classes designed to help ELA's become permanent 

resident. 

Descrimion (7). 3) 

. The Offce for Refugees and Immigrants has allocated 30% of select staf positions to the 

SUAG program. 

Comment 

. After lengty discussions with Region I FSA staf, the Office for Refugees and 

lffjgrants alocated certain percentages of central OR! executive and fiscal staff salares 

to SLIAG adnistration. in relation to the tie spent on SLIAG. Direct SLIAG program 

staf are fully charged to the grt. 

Findir! (7). 3. also Exec. Summarv TJ. 

. The FSA held several national conferences to share informtion with states on the


documentation of costs. The FSA also provided states with "Question and Answer


issuances and demographic datafrom the INS.


Comment 

. OffIcial HHS policy regarding cost documentation methods was not furnished to States


until October, 1988, long after the OIG visit. The Question and Answer issuance


provided infon guidance only, and focussed on grant application procedures rather
 than cost claiming methodologies. 

c-z 
. ) 

Finding 13. also (T?p. 12. 

. The State s Executive Order Numer 257 prevents agencies from requesting information

on citizenship status zmless required by Federal statute, Questions on citizenship statu 

have been removedfrom all applicationsfor services and benets. 

Comment 

. The Governor's Executive Order Number 257 prohibits employees or agents of the 

Commonwealth from asking progr applicants about their citienship or imgrtion 

status unless reuired by federa statute, regulation, or cour decsion. It does not 

supersede State statutes explicitly requig such inquires for cert State progr. 

The policy is designed to prevent the creation of reguatory or procedura barers to 

access for progrs which do not have a legal eligibilty requiement based on citizenship 

or immgrtion statUs, and which would tend to discrminate agaist non-citizens in a 

varty of immgrtion statuses, as well as citizens who migh t appear or sound "foreign Progr which do not have legal authorty to condition eligiblity for benefits on the 

grounds of citienship or imgrtion status have removed such questions from their 

applications. 

The Goveror s Legal Counsel has made a detemration that the Executive Order permts 

agencies to obtain immigrtion statUs informtion for cenan programs, as it is required 

by the Imgrtion Refonn and Control Act cratig SLIAG, and the SLIAG regulations, 

in order to chum federal reimbursement. 

Massachusetts has worked closely with FSA to establish cost-claimig methods for 

progr which minimize the need to inquie into applicants' immgration statUs, as this 

tends to discourage eligible applicants from using services which they need. Chief 

among these methods is the computerized Cost Doumentation System, operated under 

contrct by Manin Maretta Corporation, which counts the number ofELA' s using a 

program through matching Social Securty numbers. 

Finding (p. 4. also iii 

. There arefund control vulnerabilties. 

Comment 

. Massachusetts strongly objects to this asserton. No specifc fund control vulnerabilties 

are identified anywhere in the report It is our belief that al funds administered by this 

office and other SLIAG parcipating agencies are meticulously controlled, 

Finding (D. 

. The Department of Public Welfare wil offer Ge1Ura! Relief Medicaid under specifc


circumstances, homeless services, refugee reserrleT7nt, Supplemental Security income


(551;, and employment and retraining services for ELAs.


Comm!'nt 

. ELAs are not eligible for refugee resettlement progrs. Of the other progrms cited, 

Massachusetts has sought SLlAG reimbursement only for General Relief and Medicaid, 
I) 

Descrimion (T). 5) 

. The Division of Housing is responsible for programs to assist individuals and familes 

that require energy and housing assistance. The Gateway Cities Municipal Grants 

program is also within the puriew of the Housing Division. 

Comment 

. The Executive Offce for Communties and Development (EOC) is responsible for these 

program. Housing and renta assistace program ar within EOCD's Division of 

Housing Development Fuel Assistance is administered by the Division of 

Neighborhood and Economic Opportunity. The Gateway Cities Program is within the Division of Municipal Development 

Findine (T). 5) 

. The Departmnt of Public Welfare ha not established aforrl system to identify individual ELAs due to the Executive Order s prohibition of discrimination based on alien statu. 

Com'Tent 

. At the tie of the O G review, the Deparent of Public Welfare had not developed a fInal 

cost claimig methodology for Genera Relief or Medcaid. The Deparent was waiting 

for FSA to issue guidelines for the CDS system. 

The Executive Order was not the obstacle to establishing a claig system. For 

example, documentation of a non-citizen applicant irrgrtion status is presented as 

pan of the Medcaid application process. However, the applicant s alen registration 

number does not appear as a field in the Deparent s client trackig system. The 

Deparent did not be :eve that revising its computer system to include such a field would 

be cost-effective in order to clai a very small amount of SLIAG reimbursement, when a 

system based on matChing Social Securty numbers (aleady in the computer ) was 

being made available by HHS. At present, Massachusetts is utiizing CDS in order to 

determne costs of Medcaid ar.. Genera Relief assoiated with ELAs. 

Findin (T). 7. also iW 

. T FSA's defnition of public assistance includes some public health assistance activities 

which created administrative an service delivery problems for Massachusetts' public 

health agencies. 

Comment 

. For public assistance programs, SLIAG is solely a funding mechanism to reimburse 

states for servces provided to BLA's in qualifying existing progrs. Consequently, the 

implementation of SLIAG in no way affected the actual delivery of servces to clients. 

FSA' s broad definition of public assistace, which included several programs 

traditionaly regarded as public health and delivere though the public health system, 

placed a heavy administrti-' e burden upon the State, and wil undoubtedy result in 

unreimbured SLIAG-related costs. A similar cae can be made for the impact on mental 

health services. We support the OIG recommendation on p. 8 that FSA reconsider its 

posi tion.


C.;4 
1 ' 


-4­


10) Descrimion (rY. 7) 

. For f Departmnt of Public Health SUAG-reimbv;rsable activities) contracts with private 

vendrs, req sts for proposals wil be written and treated as a local grant. 

Comment 

. As stated in the drt repon s previous sentence, DPH services ar funded though the 

State s appropriation act The Deparment establishes service contrcts for some 

programs, paid by the State s appropriated funds. A ponion of the State s cost of such 

progrs (including any contracts) is reimbured from SLlAG; however, there are no 

servce contrcts or grants diectly attached to SLlAG funds. 

11) Findine (p. 9) 

. The Departmnt of Education ha not implemented a system to identify ELAs as of the 

review period. Adaptation of the current enrollment wil be made by checking alien card 

numbers at intake. Current refugee policy is bound by the Executive Order covering 

articles on nondscrimination which prevents agencies from req sting and disseminating 

informtion on citizenship status.


Comment 

. The Deparent had not implemented a client trckig system because it had not yet 

issued its request for proposals for SLIAG-funded classes. As these classes were 

designed explicitly for BLs, the Deparent was prepared to (and did) requie all 

SLIG-funded program to record enrllees' alen registrtion numbe. rs at intake. Agai, 

as noted earlier, the Executive Order did not bar collecting such information, as it is 

requir by federa regulation. 

12) Descrimion (D. 9)


. It is anticipated thot since admnistrative costs for the education programs are low, the


program wil be fully funded with 15% of the grantfor administra!ive costs.


Comment 

. To the contrar, from the begining the Deparment has stated that its actual admnistrative 

costs for the education programs wil far exceed the 1.5% ceiling. Massachusetts has 

joined may other states in seekig a chang in SLIAG to pennt a higher ceiling to reflect 

actual costs. 

13) Findine (D. 10. also un 

. Conflicting interpretations of the term "public charge" and "permanently residing under 

the color of law" ha caused confusion an.ong immigrants as to what services the are 

eligible to receive. 

Comment 

. The confusion stems directly from the absence of clear INS policy diectives regarding 

these issues. This lack of clarty served as a deterrent to ELA' s in accessing services. 

Along with many other States. Massachusetts has made significant effons to obtain 

clarfication from INS and HHS on these terms and their application. 
;

14) Findiml (1)7), 12. 13. also ii. iv) 

. The State Departnts of Public Welfare, Public Health and Education had not 

established methods to documnt costs for services and benefts provided to individual ELAs. Massachusetts should deelop methods for determining and docwnenting these 

costs. 

Comment 

. At the tie of the 01G visit in June 1988, no deparent had yet implemented specifc 

SLIAG cost claimig methodologies due to the lack of FSA policy directives noted 

above. However, the Depanent of Public Health had identied appropriate "public 

health" program for which to use the population ratio methodology, which does not requie trckig servce costs to individual BL' 

Both the Deparent of Public Heath and the Deparent of Public Welfare were 

awaiting release of fmal proedures for the Cost Documentation System (CDS) for their 

public assistace" program, which do require such individual trcking, CDS was not 

ready for use unti July, 1989. The Deparent of Education did not begin its SLIAGfunded progrs unti Jan. 1 , n89. From their inception, those program implemented 

an individual ELA trckig system as specifed in the Deparent of Education s Request 

for Proposal for SLIAG-funded ESL/Civics classes. 

As of ths wrtig, Massachusetts has developed cost claiming methodologies for all 

SLIAG-reimburable progrs and has worked closely with all impacted ag ncies to 

ensure both accurcy and sensitivity. 

15) Finding ('t.
 12) 

. At the time of the inspection, Massachuetts ha not received forml guidelines from FSA 

on determining and claiming SllAG administrative costs, and Massachusetts ha not 

developed methods for determining and docwnenting these costs. 

Comment 

. Massachus:tt has had no problems in detennning or doc:.!1enting the costs of 

adrrinisterig progr which are paraly or fully SLIAG-funded, nor in detennining or 

documentig centr grt adnistrtion costs. The Commonwealth has comprehensive 

and asppropriate systems in place. 

Before drwig any SLIAG funds, Massachusetts established a separate account for 

centr SLIAG adistrtion, and all costs are identiable by line item and are fully 

auditable. 

The 01G report misses the point here. The problem did not lie in our abilty to identify or 

control administrtive costs. The problem was that absent FSA policy and decisions 

aboUt each progr s cost claig methodology, it was not possible to detennne what 

ponion of ea:-h progr s admistrtive costs would re SLlAG-reimbursable. 
i .