IMPLEMENTATION OF THE STATE


LEGALIZATION IMPACT ASSISTANCE


GRANTS UNDER THE IMMIGRATION


REFORM AND CONTROL ACT OF 1986


STA TE OF COLORADO 

1t"diO 

OFFICE OF INSPECTOR GENERAL 

OFFICE OF ANALYSIS AND INSPECTIONS 

OCTOBER 1989 
,:

OFFICE OF INSPECTOR GENERAL


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

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

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

OFFICE OF ANALYSIS AND INSPECTIONS 

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

major offices within the DIG. The other two are the Office of Audit and the Offce of Investigations. Inspections are conducted in accordance with professional stadads developed 

OAI. These inspections are tyically shon-term studies designed to determe program effectiveness, efficiency, and vulnerabilty to frud or abuse. 

This study was conducted to determne the effectiveness of Colorado s implementation of 

State Legalization Impact Assistance Grants funds awarded under the Immgration Reform 

and Control Act of 1986. 

The repon was prepared under the dition of Don McLaughlin, the Regional Inspector General of Region VII, Offce of Analysis and Inspections. Parcipatig in this project were the 

following people:


Kansas City San Francisco 

Hugh Owens, Project Leader Apryl Williams 

Raymond Balandron 

James Wolf 

Alicia Smith 

Headquarters New York 

Alben 1. Nace Lucile M. Cop 

Debra Robinson 
IMPLEMENTATION OF THE STATE


LEGALIZATION IMPACT ASSISTANCE


GRANTS UNDER THE IMMIGRATION


REFORM AND CONTROL ACT OF 1986


STATE OF COLORADO 

Richard P. Kusserow 

INSPECTOR GENERAL 

OAI-07 -88-00443 OCTOBER 1989 
EXECUTIVE SUMMARY 

PURPOSE 

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

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

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

BACKGROUND 

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

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

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

in progr funds were alocated to States, and funds wi contiue to be alocated though FY 

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

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

neey individuals and publi health assistance servces offered under the States' public health 

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

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

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

Suppon Admnistrtion (FSA) is responsible for adsterig the progr. 

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

implementation. In addtion to the norm diculties encountered in cratig new processes 

and proedures, FSA recognized that SLIAG would have unque problems. Some of these 

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

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

the extremely short time fres for the grt award process. 

METHODOLOGY 

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

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

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

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

population, or the amount of the grant. The nine States are Arzona, California, Colorado, 

Florida, Ilois, Massachusett, New York, Texas, and Washington. 

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

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

this report. Ths report represents the review conducted in the State of Colorado and reports 

on its implementation of the SLIAG program as of August 1988. 
Both FSA and Colorado were commtted to identifying problems and developing innovative 

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

outline of the State concerns identied in ths report 

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

on imlementing the SUAG program. 

The FSA held several national conferences begining in 1987 to share 

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

application process, and the documentation of costs. 

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

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

FINDING: Colorad established a strctue to identify organizational and program needs. 

Thugh a Medical Case Management Progr, the Colorado Deparent of 

Health intends to elevate the health status of needy individuals to approximately 

that of the State s general population. 

The Colorado Deparent of Health also intends to recrit, hi, tr, and 

supervse parprofessional communty health workers who are ethcaly, 

liguisticaly, and cultually sensitive to its servce population. 

Agencies seekig to provide SLIAG-related educational servces for eligible 

legalze alens must develop outreach activities and identiy these in their grant 

proposals to the Colorao Deparent of Education. 

FINDING: Colorad also took steps to document exenditures and contrQI disbursements. 

At the tie of the inspection, Colorado was adapting existing automated systems 

to reimburse counties for cash and medcal assistance to eligible legalzed alens. 

Since expenditues must occur before reimbursement is made, the system used 

will show whether any excess cash balances exist at the service provider level. 

Under funding agreements with the Colorado Deparent of Education 

educational providers must separately account for SLIAG expenditues before 

reimburement is made. These agencies must collect and report data veriying 
enrollment, attendace, progress, certfication, and program expenditus to the 

deparent. 

Neverteless, there are some funds contrl vulnerabilties. 

FINDING: Conflicting interpretations of the term "public charge" ha caused uncertainties 

for the aliens as to what services they are entitled to receive without fear of deportation. 

Some members of the alen population fear that acceptig benefits would subject 

them to possible deporttion if they ar identied as a "public charge," as 

defied by the INS. Ths uncertnty ultitely affects the State s abilty to plan 

for and provide servces to eligible legalze alens. 

FINDING: The State ha not developed a method to determine education program 

adinistrative costs. 

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

Colorad. 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 disagreements resulted because FSA 

did not provide definitive wrtten instrctions to assist Colorao in 

understadig SLIAG application requirements. 

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

FSA review and comment, and revisions of the application. 

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

review. 

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

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

more specific, formal guidelines for identifyg and documentig actual program and admistrative costs. However, additional actions ar necessar in other areas on the par of

FSA and Colorado. 
RECOMMENDATION: The FSA and the INS should further clarify what is meant by public charge" and widely disseminate this informtion to the aliens who have raised 

concerns about their resident statu. 

RECOMMENDATION: The Colorad Department of Education should ensure that 

providers of educational services are properly calculating education program adinistrative 

costs. 

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

orderly. Specifcally, SA should


provide defitive wrtten instrctions on the SLIAG application requirments 

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

reportg issues to miime the confsion that occUIed in the intial application 

process; 

ensur that sufficient tie is alotted to the application process includig 

Colorado s intial application, FSA' s review and formal comment, Colorado 

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

of the revised application for FSA approval; and 

develop an appeals process to use if programs or costs associated with providig servces are denied in the intial application proess. 

COMMENTS 

The FSA and the State of Colorao both commente on the drt report They generay 

agree with our fmdigs and recommndations. Both reported havig taen a number of steps 

to improve implementig SLIG. Their comments are included as appendices B and C, 

respectively. 
....... ..... ... .... ...... .................. .................. 

TABLE OF CONTENTS 

EXECUTIVE SUMMARY


I NTROD U CTIO N ................ .... ......... ............ .... ...... ..... .................8118........ ....... ... 81D...... 8 1


COLORADO' S ORGANIZATIONAL STRUCTURE................................................ 3


FINDINGS AND RECOMMENDATIONS ...................0......................................e....... 4


Pu bl i c Assistance ... II II.. II II.. II II.. II II ... II II... II ... II II.. II... II II." II... II ... II ... a... II II... II
 II II. II II.. II II II.. II 


Pu bl ic Health Assistance .... .... .... II.. .... .... II... II II.. II II.. II II.. II ... II II.. II..a.. 111111
 II... II ... II.. II II... II 9


Ed ucati on ... II....11.. II ....... ..... II....... II..II II.. II II II".. II II.. II II.. II... II II.... II 
 11..11... II ... II II.. II 12


Crosscuttin 9 Issues ... ..... II II
 II II.. II II.. ................. ........ .... 15


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


APPENDICES


APPENDIX A: Good Practi ces Ii ....... ..... .... ... II...... ..11... ..1111.11.. .... ..1111.....a....... A­


APPENDIX B: FSA's Comments .........UI........................II..............._..... B­


APPENDIX C: Colorado s Comments..........................................C-1

INTRODUCTION


PURPOSE 

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

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

effectiveness of the States' implementation of the S tate Legalzation Impact Assistace Grants 

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

The inspection included reviewig mechanisms in place to identify these funds and

determg whether present or projected policies and proedures adere to FSA gudelies. The FSA also was interested in identig potential problems early in the process and goo 

practices which al States could shar. Ths report presents the results of the inspection

pertg to the State of Colorao. 

BACKGROUND 

Under IRCA. eligible legalze alens may apply for permanent residency within a I-year 

period afer they are flIt eligible (Le., by the 31st month after they receive temporar resident 

status). 

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

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

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

S. citizens. 

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

and educational servces to eligible legalze alens, IRCA authorized $1 bilon each year 

frm Fiscal Years (F 1988 though 1991 for SLIG grts, less an amount identied as the 

Federa offset." With few exceptions, eligible legalze alens ar ineligible for federaly 

funded public assistace progrs such as Aid to Fames with Dependent Chidren (AFC), 

foo staps, and Medcaid. The "Federa offset" is the estimated cost to the Federa 

Governent of providing these servces or benefits to those few legalize aliens who ar 

eligible for them. In FY 1988, the law allocate $928. mion to States. 

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

Assistace, which is responsible for approvjng applications and adnistering the program. 

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

also provides States with technical assistance on policy issues and on the methods used to 

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

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

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

areas specifcaly for eligible legalze aliens. However, States may create new or additional 

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

reimbursement for progr adstrtive and SLIAG admstrative costs. 

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

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

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

alen. Determg progr adistrtive costs should be made in accordace with the fial 

reguation at 45 CF 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 creatig new processes and proedures, FSA recogned 

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

progrs which SLIAG encompasses, cultual and language barers associated with the 

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

METHODOLOGY 

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

varety of progr offered, the number of eligible legalze aliens in the population, or the 

amount of the grt. The nine States are Arona, Calornia, Colorado, Florida, llinois, 

Massachusetts, New York, Texas, and Washigton. This report reviews Colorado 

implementation of the SLIAG progr as of August 1988. 

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

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

were held with offcials from public assistace, public health, and education. 
COLORADO' S ORGANIZATIONAL STRUCTURE


In the State of Colorado, the Governor has designated the Colorado Deparent of Social 

Servces as the responsible adisterig agency for the SLIAG progr. Under the 

designation, the executive ditor of the Colorado Deparent of Social Servces is 

specifcaly authori to apply for and accept SLIAG funding and to provide assurces and 

certcations, as reuired by Federal regulations, to the U.S. Deparent of Health and 

Human Servces. With the Colorado Deparent of Social Servces, the executive dictor 

has designated the State Coordinator of the Colorado Refugee and Immgrant Servces 

Prgram as the single point of contact. 

The Colorado Deparent of Social Services acl ters the State s public assistance 

progr though the county Deparents of Social Servces. Other program admnistered 

by the Colorado Deparent of Social Servces ar the Medcaly Indigent Progr, 

Medcaid, public assistace programs, and the Systematic Alen Verification for Entitlements 

system. The Medcaly Indigent Prgr is cared out thugh provider contracts. 

The Colorado Deparent of Health has entere into a cooperative agrment with the 

Colorado Deparent of Social Servces to provide public health plang, coordiation

adstration, deliver, Medcal Case Management, and Medcaly Indigen voucherig 

servces, under the SLIAG progr. Simarly, the Colorao Deparent of Education has 

entere into a cooperative agrment with the Colorao Deparent of Social Servces to 

provide services under the SLIAG program Such services include education planning, 

coordiation and adstration, and contracts for adult education servces and elementar 

and seconda education servces conducted by local education agencies. 

Colorao intends to use existig servce delivery and fundig mechansms, and to use 

providers of servce to accommodte the nees of the eligible legalzed alens. The 

avaiabilty of those servces ar lited to those generay available to other Colorado 

residents. 

Parcipatig servce providers must be able to identi eligible legald alens except where 

Federa reguations permt establishing costs on the basis of a ratio between the State s tota 

population and the number of alens in the State. The exception primarly relates to public 

health servces. As far as public assistace and education ar concerned, Colorao 

reuire identication of an eligible legalze alen by presentig an 1-688, Temporar Resident 

Card issued by the Imgrtion and Natualization Servce (INS). The 1-688, Tempora 

Resident Car wil identiy the eligible legalize alen by an alien registration number. 
FINDINGS AND RECOMMENDATIONS


Both FSA and Colorado were commtted to identiying problems and developing effective 

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

State concerns identied in this report 

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

on implementing the SUAG program. 

The -FSA held several national conferences begig in 1987 to share 

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

application process, and the documentation of costs. 

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

demographic data frm the INS. 

FINDING: Colorad established a strcture to identify organizational and program needs. 

Thugh a Medical Cae Management Progr, the Colorado Deparent of 

Health intends to elevate the health status of needy individuals to approxiately 

that of the State s general population. 

The Colorado Deparent of Health also intends to recrit, hi, trin, and 

supervse parprofessional communty health workers who are ethcaly, 

liguisticaly, and cultuy sensitive to its servce population. 

To increase involvement of eligible legalze alens in educational programs, a 

local organzation choosing to offer services to eligible legalze alens wil 

reuired to develop signcant outrach activities. These wi be submitted as 

par of the Plan of Servce. submitted to the Colorado Deparent of Education 

SLIAG Adult Education Offce in response to a request for proposals. 

FINDING: Colorad also took steps to document exenditures and control disbursements. 
Because counties admster cash assistace programs in the State, the State had 

no system to reimburse counties for SLIAG-relate expenditues. At the time of 

the inspection, Colorao was developing such a system. To clai 

reimburement, counties will use existig automated systems-the Client 

Orented Information Network and the Medcaid Management Information 

System-to document, accumulate, and report progr costs for individuals 

presentig the 1-688, Temporar Resident Card. In the foster care payroll 

system, provider payments wil be identied using two new distict category 

cods. 

Since expenditus must occur before reimbursement is made, the system used 

wi show whether any excess cash balances exist at the servce provider level. 

Under fudig agrments with the Colorao Deparent of Education, varous 

agencies that can provide an ongoing adult basic education program must 

separately account for SLIAG expenditus before reimburement is made. The 

agreements stipulate that agencies reeivig fuds under SLIAG must collect 

and report data to the Colorado Deparnt of Education. They wi then 

document or verify enrollent, attendace, progress, certcation, and program 

expenditues. 

Nevereless, some funds control vunerabilties exist Findings and recommendations 

concerng these vulnerabilties follow under major topic aras. 

PUBLIC ASSISTANCE 

Assistance or Serve Activities 

Colorado offers a number of public assistace program and servces to its residents. The 

eligibilty reuirements for these servces are that the individual should be born in the United 

States, be a natual refugee, or be an alien legaly residing in the Unite States. No 

duration of residency reuirments exist 

Under public assistace in Colorado, county Deparents of Social Servces adster all 

cash assistace program. Colorado is using the existig servce delivery proess for 

SLIAG-relate servces and wi be offsettng 100 percent of State and county costs for providig these cash assistance program to eligible legalzed alens. 

For the time being, the State has chosen to make legalized aliens eligible for State and county 

public assistance progrs. These progrs include Old Age Pension-B and Aid to the 

Needy Disabled classifed as "genera assistance" by SLIAG. However, eligible legalized 
alens wil possibly be disqualfied frm eligibilty for Old Age Pension- B Prgram and/or Aid 

to the Needy Disabled Progr benefits if funding to meet the projected number of eligible legal alens needing those benefits is not available. Counties may also disqual eligible legaled alens frm local general assistace benefits. 

Colorado believes that because eligible legalze alens are bar frm AFC, they wi use 

public cash assistace only mially. In adtion, the numbers of disabled or aged 

individuals seekig assistace ar projecte to be proportonately smal. Also, most eligible legal alens are self-suffcient because they have been workig and wi have to prove ths 

for legalzation. However, State offcials are concerned that people who are eligible for 

assistace wi hesitate to seek it because of the INS "public charge" policy. 

FINDING: Conflicting interpretatins of the term lIpublic charge" ha causef, uncertainties 

for the aliens as to what services they are entitled to receive without fear of deportation. 

Some people ar afd to identiy themselves as alens for fear of being considere a "public charge." As a result, alens ar uncert about benefits they may be entitled to and whether 

acceptig these benefits would subject them to possible deponation if they ar identified as a 

public charge. 

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

public charge" and widely disseminate this informtion to the aliens who hae raised 

concerns about their resident statu. 

For medcal assistace benefits under public assistace, the Deparent of Social Servces wi use contracts drawn between it and the medcal providers. In accordace with the 

contrcts, these providers wi be reimbured for providig health car to the medically 

indigent The Medically Indigent Progr for eligible legalzed aliens will follow the same 

practices as the State s curent Medcaly Indigent Progr, including the coverage of servces 

and the patient s abilty to pay. Contrcts wi stipulate that the Medcaly Indigent Prgram 

wi reimbure providers at 100 percent of their costs for servces to eligible legalzed alens; however, ths is only afer patient responsibilty and any thd par responsibilty are 

deducted 

For eligible legalze alens located in an ara not served by a Medcaly Indigent Prgram 

provider, the Deparent of Social Servces has entere into a cooperative agrment with the 

Deparent of Health. These providers wil contrct for servces furished to the general 

population and must submit to the Deparent of Social Services a voucher for 

reimbursement of the services. 
Only a lited number of eligible legalized aliens will meet the categorical eligibilty 

requirments for Medcaid in Colorado. They would have to meet the eligibilty requirments 

for the State s Old Age Pension Progr, the Supplementa Securty Income Aid to the 

Disabled Progr, pregnant women, emergency medical care servces, or children covered 

under AFC who are under 18 year of age. 

Legalze alens who ar eligible for any of the public assistace programs adstered 

county Deparents of Social Servces will be served in a maner identical to the rest of 

Colorado s population. 

Coloro wi be providig foster car maintenance and claig SLIAG fundig for the 

eligible legalze alen childrn who meet AFC eligibilty reuirements. For them, Colorado wi provide foo, clothg, and shelter. 

Documentaton of Eligible Legalized Alien Stats 

In Colorado, the intae proess for benefits wi include askig the applicant for identication 

as an eligible legalze alen. It wi be necessar for eligible legal alens to present to the 

intae personnel their 1-688, Temporar Resident Car. Ths is the only prof of identication 

Colorado wi accept. When an eligible legalze alen later becomes a permanent resident, 

the Resident Alen Car (1-551) would be acceptable. 

Program Costs 

In Colorado, the non-Federal shar of the cost of cash and other assistace provided to eligible legal alens wil be fully reimbured frm SLIAG funds. The identication number 

each eligible legal aliens s 1-688 wi be used in alady-existig automated systems-the 

Clent Orented Inormation Network and the Medcaid Management Inormation System-to 

document, accumulate, repor and reimburse progr costs. For public assistace, the 

process is covere below: 

The cash assistace payments for the Old Age Pension Progr and for the Aid 

to the Neey Disabled Progr will be identied on a report generat d by the 

Client Orented Inormation Network and wil be the basis for Federal claig 

puroses. Since the State was not reimbursing counties for general assistace 

expenditus, Colorado is developing a unique system which wil be agreeable to 

both the State and county. Under the IV-E Prgram (foster care maintenance), 

foster care provider payments made on behalf of eligible legalized aliens wil be 

identified in the foster care payroll system using two new distinct category codes. 
To identiy eligible legaled alen Medcaid expenditues the State wil use a 

proess simar to the one used for refugee Medcaid expenditues. Eligible 

legalze alens wil be identified as a unique subset withn the Medicaid 

Management Information System. 

The progr costs identied wi be shown on a Federa financial report required anualy by 

SLIAG reguations. 

Administratve Costs


Colorado s identication of public assistace progr adstrtive costs for SLIAG wil be 

accomplished by applying 'caseload percentages to the tota costs. For example, the 

unduplicate caseload percentage for SLIAG would be applied to al Medcaid admstrative 

costs, resultig in the SLIAG Medcaid-relate adstrtive costs. 

For reportg puroses, 50 percent wi be claied under the SLIAG grt and 50 percent 

be claied under the reguar title XI Medcaid progr The caseload statistics for both 

SLIAG and the enti population wi be used to identi the population for whom 

reimbursement is being claied 

State reimburement to the counties for admistrative costs for those progrs with a 20 

percent county shar (Aid to the Neey Disabled AFC-Foster Car, and fOO staps) 

occur quarrly thugh use of a unque program code. A unique object code wi identi 

each program shown separtely on the reports to the county. 

The counties wi clai salares and frge benefits frm the State by proratig portons of the 

sta salares. A specifc Tun Distrbution Sheet is to be used by sta for any tie spent on SLIG. A percentage would be derived by dividig the tie spent on SLIAG by the tota 

tie in the month. Ths percentage is applied to the salar and frge benefits paid that month 

and the amount that is reported to the State Accountig and Puchasing Division using the 

unque progr code. Operating costs that can be diectly identied to the progr would 

also be reported by use of the unique progr code. 

Drawdown of Funds and Cash Balances 

The Deparent of Social Servces is the grtee agency and is responsible for drwdown of 

Federa fuds, disbursing funds to the State agencies providig SLIAG-related servces, and 

reportng these expenditus to FSA. 

A Federa letter of crdit will be prepar based on actual expenditus when possible. The 

agency wil draw down funds to cover expenditus once a week or as often as watanted. 
The Federa funds wi be use to reimburse services on a monthly basis, using one-twelfth of 

the projecte costs submitted in the SLIAG application. At the end of the fit quarer, an 

adjustment will be made of actual costs to estimated costs. The adjustment wil then be 

applied in the succeeg quarers' drwdowns. A pattern of expenditus based on actual 

costs wi then be established as a basis for the Federal drwdown. Cash balances are 

monitored and a schedule of Federa drawdowns is prepar and recorded as often as the 

drws occur. 

No cash balances exist at the servce provider level since the expenditue must have OCCUled 

befor reuest for reimburement can be made. 

PUBLIC HEALTH ASSISTANCE 

Assistance or Serve Activities 

The Deparent of Health has entere into a cooperative agrment with the Deparent of 

Social Servces to provide public health assistace to eligible legal alens when such 

assistace is otherwse generaly avaiable to all citizens residig in Colorado and for the 

generaIpublic s health protection. The Deparent of Health's public health treatment 

progr either provides the necessar servces or reimbures county or local health agencies 

for the servces. Although these public health servces ar funded by State and local monies, 

when these services ar provide to eligible legalze alens, the costs ar 100 percent 

federay reimburable under SLIAG. 

The Deparent of Health and/or public health facities wi provide the followig servces to eligile legalze alens: 

tuberculosis screening, tratment, and any necessar public health follow-ups; 

tratment and case management of sexually transmitted disease such as 

gonorhea and syphils; and 

case reportg and maagement of Acquired Imune Deficiency Syndrme. 

It wi also be the responsibilty of the Deparent of Health to 

coordinate a Medical Case Management Prgram to elevate the health status of 

neey individuals to a level approximating that of the genera population of the 

State; 
recrt, hie, trn, and supervise parprofessional community health workers 

who are ethcaly, linguistically, and cultually sensitive to its servce 

population; 

negotiate and subcontract the services of community health workers with local 

health deparents, communty cliics, hospitals, and other appropriate local 

health entities where they exist; 

coordiate a medical authorization system for its servce population in cities, 

towns, or counties of the State where a Medicaly Indigent Progr provider is 

not reasonably accessible; and 

operate a medical authoriation system for payments to local health care 

providers, COIIunty clics, and hospitas that agre to provide medcal 

servces to neey individuals. Cost of reimbursement cannot excee the 

Deparent of Social Services' Medicaly Indigent Program rates for simar 

servces. 

Documentaton of Eligible Legalized Alien Stats 

The public health agencies providig services have amended the existig intae process to 

identiy eligible legalze alens. When potential eligible legalze aliens go in for servces, 

they ar asked if they have reently adjusted their residency status. The informtion is taen 

in confdence. If the individual is an eligible legalze alen, he or she must present the 1-688, 

Tempora Resident Card, and the health agency will record the alen registrtion number. To 

clai SLIAG money, the agency must see ths car with the identication number. 

Program Costs 

Individual eligible legalze alens ar being identied and the individual cases followed to 

doument health servces and keep trck of costs. Costs of preventative or educational health 

servces are determed using a population ratio method 

Colorado s system provides for a full audit tr. Strngent controls are set up to support it. In 

monitorig progr costs, the Deparent of Health is reuir to report to the Deparent of 

Social Servces. The Deparent of Social Servces monitors al public health expenditus 

for compliance with SLIAG requirments. In carg out this responsibilty, the Deparent 

of Health has designated an eligible legalize alien public health coordnator to be responsible 

for al report and to present and explain them at monthly Refugee and Imgrt Services 

Program contrctor meetigs.

To aid in gatherig some data on eligible legalze aliens, the Deparent of Health has 

developed a system to matain a registr of eligible legalize alens who ar tested and 

trated for tuberculosis. On a quarerly basis, the Deparent of Health submits to the 

Deparent of Social Servces a biling for tuberculosis testig and treatment, medical case 

management, and authorization. Also on a quarerly basis, the Deparent of Health has to 

submit a mUTative report includig at least (1) the tota number of eligible legalze alens who 

were tested and trated for tuberculosis, (2) the progress and activities of the medcal case 

maagers, and (3) any actions the Deparent of Social Servces requird them to perform. 

The Deparent of Health must also submit two reports at the end of the fiscal year. These 

reports cover two separate period in the fiscal year and include at least the followig inormation: (1) the actual SLIAG-related costs incured durng the fiscal year for each public 

health progr identied in Colorao s application, (2) the Deparent of Health's SLIAG adtrative costs, and (3) the amount of SLIAG funds obligated to each public health 

progr and the tie period for which the funds were obligated. 

Administratve Costs


The Deparent of Health has developed tight budget reguations coverig SLIAG and has 

the necessar accountig system in place to document adnistrative costs. To keep trck of 

al expenditus, the Deparent of Health has established separate agency budget ledgers for 

each cost item. Costs ar alocated by time sheets, and expenditues wi be claied based 

. upon prorate salares and frge benefits. Travel costs encompass in-State costs for disease 

contrl sta, in-State costs for public health staf, and out-of-State costs for public health sta. 

Also included in adistrative costs are operatig and equipment costs. The Deparent of

Health wi use an indict cost rate approved by the U.S. Deparent of Health and Human 

Servces, the cognant Federal agency. These costs ar included in the two fiscal year reports

submitt to the Deparent of Social Servces. 

Drawdown of Funds and Cash Balances 

To obta reimburement for servces rendere, the Deparent of Health has to submit the 

appropriate report to the Deparent of Social Servces. This report is the supportng 

documentation used to reimbure the Deparent of Health by trsferrg the funds though 

an interagency voucher or by a dict vouchering process. The Deparent of Social Services 

does not advance any funds for program costs. 
EDUCATION 

Assistance or Servce Activities 

The Deparent of Education has entered into a cooperative agreement with the Deparent 

of Social Servces to provide educational servces to eligible legalze alens. Even before the 

implementation of SLIAG reguations, the Deparnt of Education has had a goo reputation 

and has been a long-term consultat to agencies providig qualty educational servces to 

individuals with lited English-speakg skils. The Deparent of Education is staed with 

well-qualed individuals and an extensive servce network which can rapidly implement 

additional services. 

In Colorado, the educational servces to be provided under SLIAG wi be those allowed 

under the Adult Education Act, Emergency Imgrant Education Act, and other programs 

designed to enable eligible legalze aliens to att citizenship skis reui by INS to 

adjust to permanent resident alen status. 

The followig adult education services wil be available for adult eligible legalize alens and 

providers of services to them thugh 

instrction in basic skis to enable adults to function effectively in society 

(includig the abilty to speak, read and wrte the English language); 

instrction leadng to the equivalent of a certcate of gruation from a school 

providig seconda education; 

instrction for adults with limited English proficiency; 

instrction in citizenship skills; and 

ancilar servces to local providers includig cunculum development, teacher 

traig, and evaluation. 

If the local elementar and seonda educational agency meets the enrllment theshold 

requied by SLIAG, it can use SLIAG funds to provide these servces for children: 

supplementa educational services necessar to enable childrn to achieve 

satisfactory level of performance, includig English language instrction, other 

bilngual servces, and special materials and supplies; 
adtional basic instrctional services that ar diectly attrbutable to the 

presence in the school distrct of immgrant children, includig the costs of 

providig additional classrom supplies; overhead costs; costs of constrction 

acquisition, or renta of space; costs of transportation; or such costs diectly 

attbutable to such adtional basic instrctional servces; and 

essential in-servce traing for personnel who provide instrction to immgrant 

chidren. 

The SLIAG Adult Education Offce wi issue a request for proposals to local Adult Basic 

Education Progr sites and interested public or private nonprofit agencies statewide. 

Prposals wi be reviewed by the SLIAG adult education progr manager in the 

Deparent of Education with assistace from a commtt. Review crteri wi be published 

in the reuest fQr proposal. The Deparent of Education will evaluate al progrs 

determe if they meet SLIAG crteria for educational delivery systems and wi recogn 

those that ar awared fudig as approved progrs. It is anticipated that approximately 30

progrs wi be selected for fundig. The request for proposal process was selected to 

ensure that al intereste community-based organzations would be faily considered. 

A local organzation choosing to offer educational servces to eligible legaliz aliens wil be 

reuied to develop signifcant outrach activities as par of its Plan of Service. The Plan of 

Servce wi be submitted to the State Adult Education Offce for approval in response to the 

request for proposal. To assur success, outreach effort wi have to include requests for 

referrs from varous communty progrs that come in contact with eligible legalze alens. 

fudig floor wi be established for those progrs where smal numbers would result in a 

reimbursement too smal to cover the cost of instrction. SLIAG fundig to a service provider 

is to be the lesser of actual costs or $500 multiplied by the number of eligible legal aliens 

served 

The SLIAG funds wi be alocated to local educational agencies using the Emergency Imgrt Education Act guidelines and mechanisms. Because of the enrllent thshold 

reuired for SLIAG, very few school distrcts, if any, wi be eligible for reimburement. 

Furermore, many eligible legalze alen childrn wi be eliated frm the eligible pool 

because of the attendace requiment of fewer than 3 ful academic year in U.S. schools. 

Therefore, budget projections for the elementar and seconda schools are minima. 

The Deparent of Education wil request applications frm local education agencies for 

fundig. Unti ths proess is completed it wil be diffcult to assess actual eligible programs. 
Documentaton of Eligible Legalized Alien Stats 

The Deparent of Education wi mody its basic enrllent form to identi eligible legal alen students for SLIAG puroses. The moded form wi ask for information 

related strctly to eligible legalze aliens. As par of the enrollent intae proess, the 

eligible legalze alen must show the 1-688, Temporar Resident Car, or SLIAG money 

canot be claied. Although a computer system was not set up to record this information for 

documentig costs, it was to be in the futue. 

Program Costs 

The Deparent of Education enters into fundig agrments with varous agencies that 

able to provide an ongoing adult basic education program The fudig agreements stipulate 

that agencies reeiving funds under SLIAG must collect and report data to th Deparent of 

Education documentig or verig enrollment, attendace, progrss, certcation, and 

progr expenditus. In addition, the fudig agreement also stipulates that the provider wi mata a separate accountig for SLIAG funds obtaied though the agrement. It wil 

conta a reord of al reimburable progr expenditus requested frm the Deparent of 

Education. Ths includes a complete record of how funds were spent and a listing of the 

reipients of such funds. Servce providers may reuest reimburement from the Deparent 

of Education on a monthy, quarerly, semi-anual, or anual basis. 

Administratve Costs


The Deparent of Education, in accordce with the SLIAG reguation, has a 1.5 percent 

lit on adstrtive costs. These costs are made up of management and supervisory 

activities necessar for the State educational agency to dit and contrl developing and 

overseeing the progr. These costs do not include ancilar servces such as evaluation, 

teacher trg, dissemiation, and cunculum development The Deparent of Education 

believes the lit on SLIAG adistrtive costs is to strgent and would not alow the 

progrs to be implemented on a full-ti basis. 

FINDING: The State ha not developed a method to determine ducation program

adnistrative costs. 

Prgr adstrative costs ar captued on two documents, which the adult basic education 

agency submits to the Deparent of Education. One is a Summar of Costs document 

itemizing al personnel and program costs. The second is a Reimbursement Request form 

categorizig expenditus by code number. Both documents relate to reimburement for 

actual expenditus. Ths is not consistent with the SLIAG regulation, which provides that 

these costs must be alocate to SLIAG in either the sam proporton that eligible legalized 

alens are representative of the tota number of individuals served, or the tota cost of the 

progr. 
RECOMMENDATION: The Colorad Department of Education should ensure that 

providers of educational services are properly calculating education program adinistrative 

costs. 

Drawdown of Funds and Cash Balances 

Ths process is identical to the system the Deparent of Education uses. The Deparent of 

Education submits the appropriate report to the Deparent of Social Servces. This report 

wi be the supportg documentation used to reimbure the Deparent of Education. The 

trsfer of fuds wil be though an interagency voucher or a dit voucherig proess. The 

Deparent of Social Servces does not advance funds for progr costs. 

CROSSCUTTNG ISSUES 

Colorado offcials were concerned with FSA' s untiely proessing of its State application. 

They believed the following: 

that ths delay created a slowdown in providig the servces neeed by eligible 

legalze aliens; 

that a "lack of trst" exists in FSA; 

that FSA believes the priar intention of SLIAG is to provide servces and 

assistance to eligible legalized aliens without any major effect on the existig 

system for programs; 

that FSA is more concerned with budget cuttg and has made implementig the 

progr more dicult, thus impedig the State s abilty to provide servces to 

eligible legalzed alens; and 

that too much Federa involvement affects gettng the servces to the eligible 

legalze alens. 

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

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

for services.


Delay in FSA issuing the implementing regulation resulted in the State 

inabilty to properly plan for SLIAG. 
.. 

.. 

Numerous policy misinterpretations and disagreements resulted because FSA 

did not provide definitive wrtten instrctions to assist Colorado in 

understadig SLIAG application requirements. 

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

FSA review and comment, and revisions of the application. 

No form appeals process exits if programs or costs are denied in the 

fit-level review. 

Accordig to fmal 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 submitt by 

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

Applications were to conta brief descrptions of the State progrs or servces, estiates 

of the State s SLIG-relate costs for each program or activity for that parcular fiscal year 

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

brief explanation of the methodology used to estimate these costs. 

Due to these short tie fres, FSA was not able to provide feeback on revisions necessar 

in the State s FY 1988 application. The informtion was trsmitted by telephone or in 

meetigs. The ti frames to mae necessar revisions did not accommodte the 

organzational strctu or the nee to communicate with or seek approval from the progr 

components afecte by revisions reuested by FSA. Although some changes had a major 

effect on progrs and grant amounts, the single point of contact received no offcial rationale 

frm FSA for requestig the changes. This could place the single point of contact or the sta 

person who assumed responsibilty for revisions in an awkward position should the changes or 

the amount of the grt be questioned 

The FSA did not provide for paral funding nor conditional approval of applications, nor did 

the FSA provide for an appeals proess when programs, costs, or methodologies were not 

approved 

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

orderly. Specifcally, FSA should 

provide definitive wrtten instrctions on the SLIAG application requirments 

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

reportng issues to miimize the confusion that occur in the initial application 

process; 

16 . 
ensur that sufficient tie is allotted to the application process includig 

Colorado s intial application, FSA' s review and formal comment, Colorado 

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

of the revised application for FSA approval; and 

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

servces ar denied in the initial application proess. 
OIG RESPONSE TO COMMENTS 

The FSA and the State of Coloro 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 stes to improve implementig the SLIAG progr includig claryig progr policies and proedurs. In the report the State had several concerns 

about the FSA adstration of the progr. We have modfied cert aspects of the report 

based on the comments reeived frm FSA. 

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

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

of alens would qualy to access the SLIAG progr. The report recogned that inormation 

obtaed durg the review determed that substatial incrases in workloads and 

expenditus could occur in these program areas as well as in education. However, we 

understad frm recent discussions with State offcials that demand for servces is falg behid earlier projections. We reported that there is no formal appeals process if progr 

costs ar denied in the fit level review. We agr with FSA's statement that the Grat 

Appeals Boar does have jursdction over mattrs for witholdig and repaymnt of SLIAG 

funds. However, it was the State s concern that an effective appeals mechanm be in place 

for issues involvig progrs or costs at the fial level of FSA's review in the application 

process. 

The FSA made numrous comments to clary cert matters of fact, policy, or proedure. 

have included these comments verbati in appendi B. 

The Stae of Colorado 

The State has generay agr with our fmdings and recommendations. Their comments 

included verbati in appendi C. 
APPENDIX A


GOOD PRACTICES

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

Because counties adster cash assistace progrs in the State, the State had no system to reimburse counties for SLIAG-related expenditus. At the tie of the inspection 

Colorado was developing such a system. To claim reimburement, counties will use existig automate systems-the Client Orente Inormation Network and the Medcaid 

Maagement Inoration System-to document, accumulate, and report program costs 

for individuals presentig the 1-688, Temporar Resident Card. In foster care, provider 

payments wi be identied in the foster car payrll system using two new distict categor cods. Since expenditus must occur before reimburement is made, the system 

used wi show that excess cash balances do not exist at the servce provider level. 

Under fundig agrments with the Colorado Deparent of Education, varous agencies 

that can provide an ongoing adult basic education program must separately account for 

SLIAG expenditus before reimburement is mad. The agreements stipulate that agencies reeivig funds under SLIAG must collect and report data to the Colorado Deparment of Education. They wi then document or veri enrllent, attndace, progrss, 

certcation, and progr expenditures. 

Thugh a Medcal Case Management Progr, the Colorado Deparent of Health intends to elevate the health status of neey individuals to approxitely that of the general 

population of the State. 

The Colorado Deparent of Health also intends to recrit, hi, tr, and supervse parprofessional communty health workers who ar ethcaly, ligusticaly, and cultualy 

sensitive to its servce population. 

To increase involvement of eligible legalize aliens in educational program, a local organization choosing to offer services to eligible legalze alens will be requied to develop 

signcant outrach activities. These wi be submitt as par of the Plan of Servce submitted to the Colorado Deparent of Education s SLIAG Adult Education Ofce in respnse to a request for proposals. 
J ' 

APPEDIX 8


FSA' S COMMENTS 
; 

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

- ..IC,. 

APPENDIX B


DEPARTMENT OF HEALTH &. HUMAN SERVICES	 mlly Support Administration 

Offce of Refugee Resettemen'.


Refer to: Memorandun 

Date:	 July 11, 1989 

From: Acting Assistant Secretary 

for Family Support 

Subiect:	 OIG Draft Report: Implementation of the State Legalization 

Impact Assistance Grants Under the Imigration Reform and 

Control Act of 1986 - State of Colorado (OAI-07-88-00443) 

To: 

Richard P. Kusserow


Inspector General


Attached are the Family Support Administration comments 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 fran you in response to our request to conduct this


round of reviews of the SLIAG program. The reports we

received are very useful to us in understanding how States


are implementing the program. 

Attachment 

: C


r .., 

i: 

lS : rU t I lnr 
 SS6J 

r:..: "1 ", I.' 

::J 

B-1 
OIG DRA REPORT:


Implementation of the state Legalization Impact Assistance Grants 

Under the Immigration Reform and Control Act of 1986: 

COLORA 

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. 

Harrati ve: 

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

population will increase the demand for' State public assistance 

and public health assistance services significantly. The draft 

report isn t clear whose conclusion this is or upon what data and 

analysis the conclusion is based. The final report should 

clarify these points. 

In the course of implementing SLIAG, we have discovered that 

neither state and local public health programs nor, with 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 e accessing public 

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

heal th needs existed and was identified during the medical 

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

temporary bulge in demand for public health services, newly 

legalized aliens will generate a significant increase in demand 

for public health assistance or public assistance services. 

Page 2 (Background) -- The draft report says, "states must 

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. 

Page 7 (Pulic Assistance Documentation of Eligible Legalized 

Alien Status) -- The draft report states that the only proof of 

identification Colorado will accept for eligible legalized alien


status is an 1-688 temporary resident card. The final report


should note that eligible legalized aliens have that status for


five years from the effective date of lawful temporary resident


B-2

status. However, during that time period, they will move from 

temporary resident to permanent resident status. When they do
 so, they will be issued permanent resident cards (1-551), which
 will include documentation of eligible legalized alien status.


Page 8 (Pulic Assistance Program Costs) -- The draft report


states that, "program costs identified will be shown on a


quarterly Federal financial report required by SLIAG


regulations. " The final report should note that the regulation


at 45 CFR 402. 51 requires annual reporting, not quarterly
 reporting. 

Page 13 (Education) -- The draft report says, "A local organization choosing to offer educational services to eligible 

legalized liens will be required to develop significant outreach 

and public relations activities as part of its Plan of Service. 

Outreach to let potential students know about availability of 

educational services is an allowable administrative cost (within 

statutory and regulatory funding ceilings for ducational 

services) . It is not clear, however, what "public relations activities" are in the context of this description. The final 

report should' make clear how "public relations activities" relate

to providing educational services as defined in Federal 

regulation at 45 CFR 402. 

Additionally, page 13 of the draft report says, "A funding floor will be e$tablished for those programs where small numers would 

result in a reimbursement too small to cover the cost of
 instruction. II Because IRCA applies the definitions and

provisions f the Emergency Immigrant Education Act (EIEA) to use of SLIAG funds for educational services, the regulation at 45 CFR 402. 11(e) limits the amount the State education agency may 

pay to a service provider to the lesser of actual costs or $500 

mul tiplied by the numer of eligible legalized aliens served. 

The regulation at 45 CFR 402. 2 defines educational services for 

adults as those activities that are authorized by the Adult 

Education Act as in effect November 6, 1986. As the draft report notes, these activities include certain ancillary services. FSA 

has not specified methods States must use to calculate costs. 

However, the final report should note that the funding

limi tat ions described above do apply to all educational services 

provided with SLIAG funds. 

Page 15 (Crosscutting Issues) -- The draft report quotes Colorado
 officials as saying that a "lack of trust" exists in FSA. We are 

perplexed as to the meaning of this statement. The final report should clarify the point. FSA does not distrust Colorado officials. However, we believe it is our responsibil ty to administer SLIAG in a business-like fashion. In some cases, this has meant asking for more detail than the State submitted in its 

original applications or asking for the basis on which the State 

B-3

has made statements or assertions. We do not believe that any


such inquiry demonstrates a "lack of trust.


The draft report also quotes Colorado officials as saying, "FSA
 bel ieves the primary intention of SLIAG is to provide services 

and assistance to eligible legalized aliens without any major 

effect on the existing system for other programs. The meaning of this statement is unclear, and the final report should 

provide clarification. The final report also should note the 

"intention of SLIAG, " which is laid out in IRCA. In brief, it is 

(1) to reimburse state and local governent costs associated with 

providing public assistance and public health assistance services 

(as those terms are defined in IRCA and in Federal regulation) to 

eligible legalized aliens within ongoing programs, and (2) to provide certain educati nal services to eligible legalized aliens. 

Colorado officials further are quoted as saying that "FSA is 

more concerned with budget cutting and has made implementing the 

program more difficult, thus impeding the State' s ability to

provide services to eligible legalized aliens. It is not clear 

to what the reference to providing services to eligible legalized 

aliens refers because, as noted above, under IRCA, SLIAG funds 

may not be used to provide public assistance or public health

assistance designed specifically for eligible legalized aliens. 

FSA is committed to ensuring that States may claim all legitimate 

SLIAG-related costs. The reference to "budget cutting" appears 

to refer to FSA' s response to cost estimates in the State' 

application that were not based on any empirical data. Because 

half of SLIAG funds are allocated based on each State' s share of 

the cost of all States, if one state overestimates its costs, 

that State would receive more than its share of funds and other 

States would receive less than their share. Thus, in order to 

assure fairness, FSA reviewed state cost estimates in accordance 

wi th criteria specified in the preamble to the regulation and 

applied consistent standards among states. The final report should note these points. 

In the draft report, Colorado officials are said to believe "that


too much Federal involvement affects getting the services to the 

eligible legalized aliens. The meaning of these statements is 

unclear, and the final report should provide clarification, especially in light of the fact that IRCA allows only educational 

services funded with SLIAG to be directed specifically to 

eligible legalized aliens. 

Findi 

Finding: Since 1987, FSA has held national conferences and 

issued information to states on implementing the SLIAG 

program. 
Comment: 

Finding: 

Comment: 

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 dialogue
 with States. 

Colorado established a structure to identify


organizational and program needs.


The draft report on page 4 lists a riumber of steps Colorado took to identify "organizational and program
 needs. (Some of these steps also are featured in the 

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


ort. 

In making this clarification, the draft report also


should address the statement on page 6 that, "The


Medically Indigent Program for eligible legalized
 aliens will follow the same practices as the State I

current Medically Indigent Program, including the

coverage of services and the patient' s ability to pay. The next paragraph states that the Department of Social 

Services has entered into an agreement with the 

Department of Health to provide services "for eligible 

legalized aliens located in an area not served by a 

Medically Indigent Program provider. This description suggests a program set up specifically for eligible 

legalized aliens and fails to make clear how the 

program complies with the "generally availa le" requirement. 

The same issue arises on pages 9-10. The draft report
 lists a number of Department of Health


B-5 
Finding: 

Comments: 

responsibilities. These include: "negotiate and subcontract the services of community health workers


for eligible legalized aliens..., coordinate a


medical authorization system for eligible legalized
 al iens in cities, towns, or counties... where a 

Medically Indigent Program provider is not reasonably
 accessible, . and "operate a medical authorization system" to make payments to providers with .the proviso that .cost of reimbursement cannot exceed the Departent of Social Services' Medically Indigent 

Program rates for similar services. The Department of

Heal th also is charged with coordinating the Medical 

Case Management program for eligible legalized aliens, 

as described above, and with recruiting, hiring, 

training, and supervising paraprofessional community

al th workers "who are ethnically, linguistically, and :culturally sensitive to eligible legalized aliens. 

is not clear from the description that any of these


responsibilities are part of a program or activity that


is generally available to the population, as IRCA and


the regulation at 
 5 CFR 402. 2 require. The final 

report should clarify whether these are, in fact, part
 of generally available programs or services.


The FSA application process created a numer of 

significant problems for Colorado. Also, the FSA' 

pplication review process interfered with the State' 

ability to plan for services. 

The draft report says that the time period for 

submission, review, revision and approval of the 

initial application was too short. We agree that it would have been preferable to have had a longer period 

of time between the publication of the final regulation 

and the deadline for submission and approval of FY 1988 

and FY 1989 applications. However, the final report

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

allocation formula, one major reason for the compressed

time frame was that we could not award funds to any 

State until all States' applications had been approved. 

In order for us to run the allocation formula, which

IRCA requires to include estimates of costs, we must 

have approved estimates for all states before we can calculate States' allocations. 

Page 15 of the draft report says that "numerous policy misinterpretations and disagreements resulted because 

FSA di not provide definitive written ins ructions to 

assist Colorado in understanding SLIAG application 

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

communicated more extensively in writing. Our current 

practice is to communicate in writing on all 

B-6 
substantive issues regarding state applications,


amendments, and end-of-year reports. 

The report says that no formal appeals process exists 

if programs or costs are denied. The Grant Appeals

Board has jurisdiction over issues related to the 

wi thholding and repayment of funds. For other matters, 

the State may follow normal procedures for disagreeing with an agency finding. 

On Page 16, the draft report states that, -the single 

point of contact received no official rationale from 

FSA for requesting the changes. to the cost estimates in the initial application. 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.


Recommendations: 

Recommendation: 

The FSA and the Immigration and Naturalization Service 

(INS) should further clarify what is meant by .public harge. and widely disseminate this information to th 

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


continue our policy of disseminating any relevant


information that we receive.


B-7 
The Department also has indicated its support for a


legislative change to allow states to use a small


portion of their SLIAG grants to inform temporary


residents of the requirements for adjustment to lawful


permanent resident status and of the rights and


responsibilities of lawful temporary residents. Such 

use is not permitted under current law.


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 fashion than was the case


for the initial submissions. As the draft report


indicates, the timeframes for the FY 1988 and FY 1989


application processes were necessarily short. 


effect, the states and we had to complete two


application processes in less than a year. We do not:


expect similar problems for the FY 1990 and FY 1991


application processes.


To ensure that states have adequate time to prepare


their FY 1990 applications based on empirical data, we


have extended the deadl ine 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 writing, as was done for states' end-
 of-year reports. We issued extensive written guidance 

on the FY 1990 application process and the standards we


will apply.


The draft report also recommends that we develop an 

appeals process to use if programs or costs associated 

with providing services are denied in the initial

applications process. We do not believe such a process 
, , 

is necessary. The Department I s Grant Appeals Board has

jurisdiction over cases involvinq the repayment or


withholdinq of funds. Normal channels within the 

Department are open to states that disaqree with


decisions made durinq the course of application review. 

B-9

(\ 

APPENDIX C 

COLORADO' S COMMENTS 
,. :,: . q ,\ :

. :.. , . . .: . ,.. ,, . ( .. . _. , , . 

APPENDIX C


STATE OF COLORAO 

DEPARTMENT OF SOCIAL SERVICES 

1575 Sherman Stre.:t 

Denver, Colorado 80203 

Colorado Refugee and Immigrant Services Program 

190 East 9th Avenue. Suite 300 

Denver. Colorado 80203 

Phone (303) 863-8211 Roy Romer 

Governor 

Irene M, Ibarra 

Executive Director 

July 10, 1989 

Richard P. Kusserow


Inspector General


Department of Health and Human Serv ices


Office of Inspector General


Washington, DC 20201


Dear Mr. Kusserow:


Thank you for the draft copy of your staff' s analysis of the


implementation of the state Legalization Impact Assistance Grant


in Colorado. The Department of Social Services appreciates the


opportunity to comment because we believe that one finding of the


report attributes a greater fund vulnerability than actually
 exists. 

The finding, reported on page 14 of the draft copy of the 

implementation analysis, states liThe state has not developed a 

method to determine education program administrative costs" 

This finding is characterized on page iii as representing "funds control vulnerabilities. While the finding itself is correct, 

it is likely that the state failed to communicate to the reviewer 

that an early administrative decision of Colorado' s SLIAG 

implementation was to allow education providers to bill 

instruction costs as actual costs including technical assistance, 

but program administrative costs were not included. Thus the 

reporting structure for billing has no place for pro-rated 

program administrative costs. This decision was taken partially 

due to uncertainties around the numbers of persons who would seek educational services and because of uncertainties of allowabili 

of program administrative costs by HHS. Colorado is now, 

however, examining a method of allowing program administrative 

costs and the recommendation of the ' analysis will most certainly be incorporated. 


9 t; :Z \\6 6 \ lnf E 

T:: :,


11- , . I 

C-l 
, 

Richard P. Kusserow


July, 10, 1989


Page 2


Colorado believes that both the finding and recommendation have 

merit, but to characterize that finding as a fund vulnerability 

may overstate the actual circumstance. 

Once again, we appreciate the opportunity to comment on the draft
 analysis. 

- Sincerely, 

Bagan 

state Coordinator


Colorado Refugee and Immigrant Services
 Program 

LB/wg 

C-2