Testimony

Before the Subcommittee on Technology and

Procurement Policy, Committee on Government

Reform, House of Representatives

United States General Accounting Office

GAO

For Release on Delivery

Expected at

10 a.m. EDT

Tuesday,

July 9, 2002

HUMAN SERVICES

Federal Approval and

Funding Processes for

States’ Information

Systems

Statement of David L. McClure

Director, Information Technology Management Issues

GAO-02-347T
Page 1 GAO-02-347T Human Services Systems

Mr. Chairman and Members of the Committee:

We are pleased to be here today to discuss the federal agency processes

related to the approval of state information technology (IT) projects

supporting state-administered federal human services programs. These

programs include Child Support Enforcement, Child Welfare, Medicaid,

and Food Stamps (app. I describes these programs).

Information systems play a central role in the management of human

services. Historically, information systems have been used to determine

participants’ eligibility, to process claims, and to provide participant and

program information. States are also facing new information systems

challenges as a consequence of the sweeping changes brought about by

welfare reform,1 in which states’ programs for needy families with children

have dramatically shifted their objectives and operations. The technology

challenge of welfare reform is to provide the information needed to

integrate services to clients and track their progress towards selfsufficiency. To help needy families prepare for and obtain work, case

managers need detailed information about factors such as family

circumstances, job openings, and support services, which is very different

from the information needed to issue timely and accurate cash assistance

payments.

Recognizing the importance of automated systems in state-administered

federal human services programs, the Congress enacted various legislative

provisions encouraging states to implement certain systems to improve

program efficiency. In addition, federal agencies have provided technical

and funding assistance. For example, in the Family Support Act of 1988

and other acts, Congress provided funding to states to develop a single

statewide child support enforcement system.2

 The federal agencies

responsible for the Child Support Enforcement, Child Welfare, Medicaid,

and Food Stamps programs also have processes in place to review and

approve state IT planning and acquisition documents supporting state

human services systems as a prerequisite for states to receive federal

funding for these systems. Although there are exceptions, as a general

rule, the federal agencies are required to respond to these state requests

 1

The Personal Responsibility and Work Opportunity Reconciliation Act of 1996.

2

Various legislative provisions authorized up to 90 percent federal funding of these systems

between fiscal years 1988 and 1997, up to 80 percent from fiscal years 1998 to 2001, and 66

percent thereafter.
Page 2 GAO-02-347T Human Services Systems

for approval within 60 days. This federal review and approval process was

designed to promote accountability for the use of federal funds, mitigate

financial risks, and avoid incompatibilities among systems.

Because of the importance of IT in achieving the programmatic goals of

state-administered federal human services programs, you asked us to

study the approval and funding of information technology projects for

state-administered federal programs for the following four programs:

(1) the Department of Health and Human Services’ (HHS) Administration

for Children and Families (ACF) Child Support Enforcement program,

(2) ACF’s Child Welfare program, (3) HHS’s Centers for Medicare and

Medicaid Services (CMS) Medicaid program, and (4) the Department of

Agriculture’s Food and Nutrition Services (FNS) Food Stamps program.

Specifically, our objectives were to determine, for these four programs,

• the statutory and regulatory requirements for federal approval and funding

of state IT development and acquisition projects;

• whether agency processes for reviewing, approving, and funding state IT

development and acquisition projects for these programs hinder or delay

states’ efforts to obtain approval for these projects; and

• how the agencies ensure that they consistently apply the Office of

Management and Budget’s (OMB) Circular A-87, Cost Principles for State,

Local and Indian Tribal Governments, to fund IT development and

acquisition projects.

In doing this work, we reviewed applicable federal statutes and

regulations as well as ACF, CMS, and FNS policies and guidance. We also

obtained and analyzed information on state requests for the approval of

planning documents (called advance planning documents and advance

planning document updates) and acquisition documents (i.e., requests for

proposals,3

 contracts,4and contract modifications) for fiscal years 2000

and 2001. On the basis of this information, we selected and analyzed

examples of cases in which the federal agency took more than 60 days to

 3

States used various terms to describe procurement request documents, such as request for

proposals and invitations to bid. For purposes of this statement, we refer to such

documents as requests for proposal.

4

States used various terms to describe acquisition documents, such as contracts and

purchase orders. For purposes of this statement, we refer to such documents as contracts.
Page 3 GAO-02-347T Human Services Systems

process the request.5 As part of this analysis, we reviewed files and

interviewed responsible federal and state officials. However, we did not

assess the adequacy of the analyses performed and the subsequent

response by the applicable federal agency. We also interviewed agency

and OMB officials on how they ensure that the cost allocation provisions

of OMB Circular A-87 pertaining to IT development and acquisition

projects are consistently applied. Appendix II provides additional details

of our scope and methodology.

Federal approval and funding for state IT development and acquisition

projects for the Child Support Enforcement, Child Welfare, Medicaid, and

Food Stamps programs are largely governed by statutory and regulatory

requirements. These requirements establish the federal funding

participation rates, the documentation (e.g., advance planning documents,

each of which includes a cost allocation plan and feasibility study;

requests for proposals; and contracts) that states must submit, and the

timeframes in which the federal agency must respond to the request. With

some exceptions (primarily related to the federal financial participation

rates), the requirements for the four programs are largely the same. States

cannot receive federal funding for developing and acquiring IT systems for

the Child Support Enforcement, Child Welfare, Medicaid, and Food

Stamps programs without obtaining approval of these planning and

acquisition documents.

A thorough assessment of the federal approval and funding process

requires complete and reliable data that track a request from the time the

federal agency first receives it until the agency finally approves or

disapproves the request. However, such information is not readily

available and the process cannot be thoroughly assessed because (1) the

system used by ACF and CMS headquarters to manage the approval

process does not track the life cycle of a request6

 and (2) FNS and CMS

 5

Federal regulations require ACF, CMS, and FNS to respond to state requests for approval

of advance planning documents, requests for proposals, contracts, and contract

modifications within 60 days. Federal regulations also require FNS to respond to state

requests for approval of advance planning document updates within 60 days.

6

The system used by ACF and CMS tracks the state request and the federal response.

However, if the federal response is to ask for additional information, the case is closed with

the date of the letter requesting the information, even though the federal agency has not

made a final approval or disapproval determination. A state response to this request for

additional information is assigned a separate case number and tracked separately.

Results in Brief
Page 4 GAO-02-347T Human Services Systems

regional offices do not have a central tracking system. 7 However, through

a meticulous manual inspection of related paper documents and reviews

of system reports, we were able to determine that in a vast majority of

cases, agencies responded to states’ IT planning and acquisition requests

within 60 days, as generally required by regulation.8

 Moreover, in 48 of 51

cases in which the agency did not respond within 60 days, state officials

reported that the timing of the federal response did not hinder state IT

projects. Nevertheless, in response to state complaints that the federal

approval process was burdensome and to a prior GAO recommendation to

identify and implement plans to facilitate states’ efforts to improve their

systems, ACF, CMS, and FNS formed a workgroup about 2 years ago to

improve the federal approval process. However, progress has been

stymied by a lack of agreement among the agencies. Accordingly, at this

time there are no plans to improve the APD process.

State cost allocation plans—which are used to identify, measure, and

allocate expected project costs among the state and the federal

program(s)—for systems development and acquisition projects must be

approved by each federal agency expected to provide funding. To ensure

that they provide a consistent response to state requests that include cost

allocation plans, ACF, CMS, and FNS officials stated that they coordinate

their reviews of multiprogram requests. These reviews are based on the

requirements set forth in OMB Circular A-87,9

 which provides the states

wide latitude in developing cost allocation plans for IT development and

acquisition projects. However, in 3 of 11 cases we reviewed,10 the

departments of Agriculture and HHS provided inconsistent responses to

 7

Because FNS had a relatively small number of state requests, we reviewed the necessary

documentation for each state request and calculated the total time until federal approval or

disapproval to be about 66 days.

8

Federal regulations require ACF, CMS, and FNS to respond to state requests for approval

of advance planning documents, requests for proposal, contracts, and contract

modifications within 60 days. Federal regulations also require FNS to respond to the state

requests for approval of advance planning document updates within 60 days.

9

Office of Management and Budget, Circular A-87, Cost Principles for State, Local, and

Indian Tribal Governments (Aug. 29, 1997).

10These 11 cases were common submissions (i.e., the same submission was made to FNS

and HHS) in which at least one of the departments’ responses to the state exceeded 60

days. There could be additional state submissions sent to both the departments of

Agriculture and HHS that we did not identify because both departments responded within

60 days or the documents were not clear that it was a common submission (e.g., the dates

of the state submission to the two departments were significantly different).
Page 5 GAO-02-347T Human Services Systems

the state. State officials noted that inconsistent federal responses cost the

state in time and staff resources to negotiate and resolve these differences.

Accordingly, to lessen the burden on the states, it is critical that the

federal departments work together to ensure that they respond to the

states in a consistent manner.

The federal government has spent billions of dollars supporting the

planning, development, and operation of state systems that support the

Child Support Enforcement, Child Welfare, Medicaid, and Food Stamps

programs. For example, in fiscal year 2000 alone, the federal government’s

expenditures for IT planning, development, acquisition, and operations for

these systems totaled $1.9 billion.11 States request funding for a wide

variety of projects, such as the following:

• Electronic benefits transfer systems, which allow food stamp recipients to

authorize the electronic transfer of their government benefits from a

federal account to a retailer account to pay for products received.

According to FNS, as of June 2002, 49 states, the District of Columbia, and

Puerto Rico were using these systems in some form to issue food stamp

benefits.

• Statewide systems that support the Child Support Enforcement and Child

Welfare programs. For example, one state was developing a statewide

child welfare system to compile and help implement a comprehensive set

of child welfare and protection practices. When implemented, the system

is expected to replace many nonintegrated systems with a single,

comprehensive one.

• Infrastructure projects that support multiple programs. For example, one

state planned to procure an enterprise portal to serve as a universal point

of access to the state government’s information and services, including

those related to federal programs.

State initiatives for human services systems can be complex, large-scale

undertakings, and states face a broad range of issues in developing and

implementing them. At a 2001 conference on modernizing information

 11This figure reflects only the fiscal year 2000 expenditures actually reported to the states

to date. States have up to two years to claim reimbursement for their IT expenditures, so

these figures may change in the future. We did not verify this amount, which was provided

by the agencies in our review.

Background
Page 6 GAO-02-347T Human Services Systems

systems for human services sponsored by GAO and others,12 participants

identified the following issues states face in developing and implementing

these systems: 13

• obtaining support for the project from the state’s leadership;

• obtaining support for the project from staff who will use the system;

• providing adequate training to staff who will use the system;

• obtaining adequate funding for developing and operating state and local

information systems;

• maximizing the system’s compatibility with other systems and the

capability to support future upgrades;

• minimizing the risk that conversion to the new system will result in the

loss of functions or data;

• overseeing contractors’ performance to maximize the cost effectiveness of

systems development;

• ensuring adequate state management of the project that can survive

personnel changes; and

• minimizing adverse effects of competition among state agencies for

information systems resources.

In addition, one of the key challenges for systems modernization identified

by the participants at this conference was simplifying the approval process

for obtaining federal funding for information systems.14 This process,

 12The other sponsors of this conference were the Nelson A. Rockefeller Institute of

Government, the National Health Policy Forum, and the Finance Project (Welfare

Information Network).

13U.S. General Accounting Office, Human Services Integration: Results of a GAO

Cosponsored Conference on Modernizing Information Systems, GAO-02-121 (Washington,

D.C., Jan. 31, 2002). Appendix II of this report identifies the participants of this conference,

which included individuals representing the four key sectors involved in developing

information systems for human services—the Congress, federal agencies, state and local

governments, and IT contractors.

14Two other challenges identified were enhancing strategic collaboration among different

levels of government and obtaining staff expertise in project management and information

technology.
Page 7 GAO-02-347T Human Services Systems

generally called the “APD process,” requires states to submit various

documents for approval in order to receive federal funding. Specifically,

subject to the statutory and regulatory requirements and thresholds

discussed in appendix III, states submit the following:

• Advance planning documents (APDs), which, depending on whether the

project is in the planning or implementation stage, can include a statement

of needs and objectives, a requirements analysis,15 a feasibility study,16 a

cost-benefit analysis, a statement of alternatives considered, a project

management plan, a proposed budget, and prospective cost allocations.

There are two major types of APD submissions—planning and

implementation—which are used at prescribed stages in the state systems

development and acquisition process.

• APD updates, which are used by federal agencies to keep informed of the

project status and by the states to obtain funding throughout the project’s

life. APD updates must be submitted annually or “as needed,” which is

defined as when there is a projected cost increase of $1 million or more, a

schedule extension for major milestones of more than 60 days, a

significant change in the procurement approach, a change in system

concept or scope, or a change to the approved cost allocation

methodology.

• Requests for proposals (RFPs) related to the planned system, such as to

solicit bids to develop a system or to provide independent verification and

validation services. RFPs may be submitted throughout the life of the

project (i.e., the planning, implementation, or operations phase). Unless

specifically exempted by the agency(s), RFPs are to be approved before

public

• Contracts and contract modifications related to the planned system, which

must include certain standard clauses and may be submitted throughout

the life of the project. Unless specifically exempted by the agency(s),

contracts are to be approved before being finalized.

 15According to 45 C.F.R. Sec. 95.605, a requirements analysis documents the information

needs and functions and technical requirements that the proposed system must meet.

16According to 45 C.F.R. Sec. 95.605, a feasibility study is a preliminary study to determine

whether it is sufficiently probable that effective and efficient use of automatic data

processing equipment or systems can be made to warrant a substantial investment of the

staff, time, and money being requested and whether the plan is capable of being

accomplished successfully.
Page 8 GAO-02-347T Human Services Systems

ACF, CMS, and FNS review these submissions and make funding decisions

on the basis of their review, which they are generally required to complete

within 60 days.17 Once the federal agency has reviewed the state request, it

can respond by approving or disapproving the request or requesting

additional information from the state.18 Although the agency’s response is

generally to be provided to the state within 60 days, if the federal agency

requests additional information from the state, once the state responds the

agency has another 60 days to review and respond to the state reply.19

Figure 1 is a simplified illustration of this general process. In addition,

although figure 1 shows an iterative process, under various circumstances

states may submit documents concurrently.

 17Except for FNS, agencies are not required to provide their response to states within 60

days for APD updates. For HHS agencies, the regulations do not specify a timeframe for the

federal response to an APD update. If the agencies do not respond to the state in the

required timeframes, then the states automatically receive provisional approval, which

allows the state to proceed.

18Federal agencies sometimes responded with a conditional approval of the state request,

providing approval but asking the state to address certain concerns.

19Of course, rather than ask the state to submit additional information, the agency could

disapprove the request, and the state would have to submit for approval a new or revised

document to obtain federal funding.
Page 9 GAO-02-347T Human Services Systems

Figure 1: APD Process Overview

Source: GAO.

Begin

project/notify 

federal 

agency(s)

Plan project

Design, 

develop, and 

implement 

project

State actions Federal actions

Review state 

submission

Modify or 

enhance 

system

Operate 

system

State submits request

Federal response

(approve, disapprove,

or request information) 

Review state 

submission

State submits request

RFP

Contract/

 modification

!

! Review state 

submission

If

applicable

State submits request

Planning

phase

Development 

and 

implementation

phase

Operations

phase

APD update

RFP

Contract/

 modification

!

!

!

If

applicable

! APD (implementation)

APD update

RFP

Contract/

 modification

!

!

!

If

applicable

! APD (planning)

Federal response

(approve, disapprove,

or request information) 

Federal response

(approve, disapprove,

or request information) 
Page 10 GAO-02-347T Human Services Systems

If a system is to be used for more than one federal program, documents

that meet the separate requirements of each program must be submitted

and approved, and planning and development costs are allocated to the

various programs benefiting from the system investment. (The same

documents can be submitted to each agency.20) For example, a state

request related to a project that supports the Food Stamps, Medicaid, and

Child Support Enforcement programs requires submission to the

departments of Agriculture and HHS. Within HHS, for multiprogram

requests, ACF’s State Systems Policy Division is to distribute the material

to applicable program offices (in the above case to CMS and ACF’s Office

of Child Support Enforcement) and coordinate responses so that a single

departmental letter is sent to the state.

The Congress and the departments of Agriculture and HHS have issued

statutory and regulatory requirements, respectively, that govern the

processes related to the approval of funding for state information

technology projects associated with state-administered federal human

services programs. This funding is intended to encourage states to

implement systems to achieve programmatic goals, such as to improve

program management and performance and to reduce error rates.

However, to exercise their stewardship responsibilities over funding

provided to the states, the departments and, in the case of Child Support

Enforcement, the Congress, require states to submit planning and

acquisition documents for approval. States cannot receive federal funding

for developing and acquiring IT systems for the Child Support

Enforcement, Child Welfare, Medicaid, and Food Stamps programs

without obtaining such approval.

Although many of the requirements for these programs are the same, there

are differences. For example, as shown in table 1, the federal financial

participation rates vary.

 20According to FNS and CMS officials, states can submit to the federal agencies the same

documentation needed for internal state review processes.

Statutory and

Regulatory

Requirements Govern

the Federal Approval

Process
Page 11 GAO-02-347T Human Services Systems

Table 1: Federal Financial Participation Rates by Program

Program

Nature of

funding

Federal /state funding percentage for

information systems

Child support

enforcement

Entitlement 66/34—system planning and development

66/34—system operations

Child welfare Entitlement 50/50—system planning and development

50/50—system operations

Medicaid

—eligibility

—claims processing

Entitlement

50/50—system planning and development

50/50—system operations

90/10—system planning and development

75/25—system operations

Food stamps Entitlement 50/50—system planning and development

50/50—system operations

Source: GAO analysis of applicable statutes.

In addition, whereas the APD requirements relating to the approval and

funding process for the Child Support Enforcement program are based in

part in statute, the requirements for the other programs are based on

regulations separately promulgated by the departments of Agriculture and

HHS (although they largely mirror each other).21 Appendix III provides

additional detail on selected federal statutory and regulatory requirements

related to the process for obtaining federal funding for IT development

and acquisition projects.

 21For Child Welfare, the requirements related to APDs and APD updates and, for Medicaid, the

requirements for APDs used to be in statute. However, legislation in 1996 (the Personal Responsibility

and Work Opportunity Reconciliation Act of 1996) and 1997 (the Balanced Budget Act of 1997)

eliminated these statutory requirements for Child Welfare and Medicaid, respectively.
Page 12 GAO-02-347T Human Services Systems

Although some state officials have reported that the federal approval

process takes too long, we were unable to comprehensively analyze how

much time the process took because the federal agencies did not track the

life cycle of state requests. While the entire approval process time

generally could not be determined, ACF, CMS, and FNS responded (i.e.,

approved, disapproved, or requested additional information) to state

requests within established timeframes about 89 percent of the time.22

Moreover, according to state officials, in only a few cases in which the

federal response took over 60 days was the state IT project negatively

affected. Nevertheless, officials from about one-third of the states in our

review cited overall concerns with the federal approval process or wanted

a more streamlined process. To address state concerns, ACF, CMS, and

FNS formed a workgroup about 2 years ago to improve the federal

approval process, but progress has been slow, and there are no plans at

this time to improve the APD process.

The APD process was designed to promote accountability for the use of

federal funds, mitigate financial risks, and avoid incompatibilities among

systems. However, among the concerns raised at the 2001 conference on

modernizing information systems for human services23 was that with

technology advancing so quickly, by the time federal funding under this

process is approved, state plans may be obsolete.

Because the federal response to a state request may be to ask for

additional information, a thorough assessment of the state’s concerns

about timeliness requires reliable data that track a request from the time

the federal agency first receives it until the agency finally approves or

disapproves it. However, this information is not readily available because

(1) the system used by ACF and CMS headquarters to manage the approval

process does not track the life cycle of a request24 and (2) FNS and CMS

regional offices do not have a central tracking system (although some of

 22Except for APD updates submitted to the Department of Health and Human Services,

agencies are required to respond to the state within 60 days.

23GAO-02-121 (Jan. 31, 2002).

24The system used by ACF and CMS tracks the state request and the federal response.

However, if the federal response is to ask for additional information, the case is generally

closed with the date of the letter requesting the information, even though the federal

agency has not made a final approval or disapproval determination. A state response to this

request for additional information is then given a separate case number and tracked

separately.

States Reported

Limited Impact from

Federal Responses

Provided after 60

Days, but Key

Information Is

Lacking 

Agencies Do Not Track

Data Necessary to Assess

the Timeliness of the APD

Process
Page 13 GAO-02-347T Human Services Systems

these regional offices used automated spreadsheets to track the status of

state requests). According to an FNS official, one of the agency’s regions

had developed a central tracking system to be used by all regions, but it is

not being used because staff found that it required too much data entry

and it was easier to use their own spreadsheets. In addition, at the

conclusion of our review, a CMS official reported that the agency had

recently implemented a centralized tracking system for state submissions

related to the Health Insurance Portability and Accountability Act.

Since the Food Stamps program had a relatively small number of cases, we

reviewed copies of state requests and federal approval letters for fiscal

years 2000 and 2001 and determined the average time until the federal

approval or disapproval of the state requests to be about 66 days and

ranged from 6 to 314 days.25 Table 2 provides an example of an FNS case in

which the initial federal response was in 31 days but the total time to

approve the request took an additional 130 days, out of which the agency

was awaiting a state reply for 89 days.

Table 2: Chronology of a Sample Case in Which Agency Response Was Within 60

Days, but Approval Took Much Longer

Date Federal or state action Number of days

4/23/01 State APD update submission was date stamped as

received by FNS

5/24/01 FNS E-mailed questions and concerns 31

6/22/01 State responded to FNS E-mail 29

7/6/01 FNS E-mailed additional questions 14

8/10/01 State responded to additional questions 35

8/23/01 FNS E-mailed additional questions 13

8/28/01 FNS E-mailed additional questions 5

9/14/01 State submitted a revised APD update via E-mail 17

9/19/01 FNS E-mailed question on revised APD update 5

9/20/01 FNS E-mailed additional question 1

9/28/01 State responded to questions on revised APD update 8

10/1/01 FNS provided final approval of revised APD update 3

Total number of days to approval 161

Source: GAO analysis of FNS file.

 25The final disposition of one of these cases has not yet been made, about a year after the

receipt of the request.
Page 14 GAO-02-347T Human Services Systems

As illustrated by the FNS example, the length of the approval process can

be substantial and attributable to both the states and the federal agencies,

which makes tracking the state requests throughout their life cycle

important to determining the cause of delays.

Although we generally could not determine the total time it took for the

federal agencies to approve or disapprove a state request, we were able to

ascertain whether the agencies responded (i.e., approved, disapproved, or

requested additional information) to the states within 60 days, as generally

required. In fiscal years 2000 and 2001, states submitted almost 1,150

requests for federal approval related to the four federal programs:26

• 377 planning (APDs and APD updates) and acquisition documents (RFPs,

contracts, and contract modifications) for the Child Support Enforcement

program;

• 212 planning and acquisition documents for the Child Welfare program;

• 370 planning and acquisition documents for the Medicaid program;

• 75 planning and acquisition documents that were reviewed by two or more

of the HHS programs in our review; and

• 105 planning and acquisition documents for the Food Stamps program.

The three federal agencies responded to these state requests within 60

days about 89 percent of the time.27

 26For ACF and Medicaid headquarters (which use a common tracking system), each state

submission, along with its federal response, is generally tracked separately. Therefore, if

ACF or CMS headquarters responded to a state by requesting additional information, the

state response (or resubmission of a corrected document) would be counted as a second

submission. In contrast, under the same scenario, FNS and CMS regional offices, which do

not have a central tracking system, would count the state response or resubmission as part

of the original submission.

27According to regulations of the departments of Agriculture and HHS, the 60-day

requirement for federal response begins on the date the federal government sends an

acknowledgement letter to the state. While ACF and CMS headquarter sent

acknowledgement letters, some FNS and CMS regional offices did not. In the latter

instances, we calculated the time to respond from the date stamp or date of the state letter.

In addition, federal responses generally took the form of a letter or E-mail, but in a few

cases it was a telephone call or a meeting with state officials.

Federal Actions on State

Submissions Are Generally

within Prescribed

Timeframes
Page 15 GAO-02-347T Human Services Systems

Figure 2 shows the extent to which Agriculture and HHS responses

exceeded 60 days (app. IV provides additional detail of this analysis).

Although we were able to determine the percentage of requests that were

completed within 60 days, we could not rely on data from the system used

by ACF and CMS headquarters for a more thorough analysis (e.g., a further

breakdown of how long it took for the federal government to provide its

initial response). In comparing the dates in this system to the actual

documentation, we found numerous discrepancies (see appendix V for

more information on the data reliability concerns associated with this

system).

Figure 2: Percentage of Cases in Which the Agency Response Exceeded 60 Daysa

a

This analysis includes APD updates. However, except for the Food Stamps program, the agencies

are not required to provide their response to states within 60 days for APD updates.

Note: The HHS multiprogram category contains state requests that involved two or more of the HHS

programs in our review. For multiprogram requests at HHS, the department sends a single response

to the state. The majority of the cases in the Child Support Enforcement, Child Welfare, and Medicaid

categories were for single-program requests (some requests included other federal programs).

Source: GAO analysis based on agency data.

ACF’s acting deputy assistant secretary for administration did not agree

with the inclusion of APD updates in our analysis, noting that ACF and

CMS are not required to respond to this type of state request within 60
Page 16 GAO-02-347T Human Services Systems

days. Although ACF and CMS are not required to respond to the states

within 60 days for APD updates, these are critical documents that require

federal approval in order for states to continue receiving federal funding.

In addition, in some cases, a federal agency has withheld approval of other

state submissions, such as an RFP, pending the approval of an APD

update, which illustrates the importance of timely federal responses to the

states for APD updates. Finally, as I just mentioned, we had to limit our

analysis of the timeliness of the federal agency responses because of the

numerous errors we found in the dates contained in the system used by

ACF and CMS headquarters. We chose 60 days as our cutoff point because

the regulations generally called for an agency response within this

timeframe and ACF officials told us that they try to respond to all state

requests, including APD updates, within 60 days.

At the conclusion of our review, ACF and CMS officials also explained that

the timeliness of the HHS multiprogram cases suffers because these

projects are almost always large, expensive, and complex undertakings

that frequently require more analysis, extensive coordination with other

federal agencies (both within and outside of HHS) and additional

discussions with the state. In addition, ACF officials stated that other

required responsibilities, such as the performance of certification reviews

for certain state systems, affected the timeliness of their reviews.

In about half of the 51 cases taking over 60 days that we reviewed, we

could not ascertain why the agency took additional time to respond to the

state request because the applicable federal analyst was no longer with the

agency or the analyst could not provide an explanation. However, when

reasons were cited for the late federal response, the most common were

(1) resource issues (e.g., lack of staff), (2) complicated issues to be

resolved, (3) multilayer review within the agency, and (4) difficulty in

reaching agreement with another agency.

In addition, in those cases in which the federal agency requested

additional information or approved the state request but asked the state to

address certain concerns, there was no single common issue or problem.

Instead agencies raised a variety of issues in their responses to the states

requests, which are summarized in table 3.
Page 17 GAO-02-347T Human Services Systems

Table 3: Summary of Federal Agency Issues for 29 Casesa in Which the Federal

Response Exceeded 60 Days

Issues Number of times citedb

Cost estimate issues, including unexplained, incomplete,

inconsistent, and inaccurate amounts 17

Cost allocation issues 13

Missing required elements of the submission 7

Functionality issues, such as how the system will meet its

goals and objectives 7

Other 13

a

We reviewed a total of 51 cases in which the federal agency response was over 60 days but 22 were

approvals without any outstanding federal issues or the documentation indicated that the federal

agency requested additional information but did not provide any details.

b

More than one issue may have been cited by the agency.

Source: GAO analysis.

According to state officials involved in 48 of the 51 cases (at 22 states) that

we reviewed in which the federal agency took over 60 days to respond, the

timing of the federal response reportedly had no negative impact on state

IT projects. State officials cited various reasons for the lack of negative

impact on their projects. Specifically, the effect of some of the federal

responses that were over 60 days was mitigated because the state

maintained good communications with the federal agencies or had

sufficient state funding to continue the project. In other cases, additional

or concurrent delays were caused by internal state processes or the state

was seeking retroactive approval for a document. For example, officials

from seven states reported that they maintain a good working relationship

or communication with the federal agency that performed the review.

Other states used their own funding to continue project planning while

awaiting federal approval. Also, in three cases, state officials reported that

an internal state review process contributed to the delay. Finally, in six

cases that we reviewed, the states requested retroactive approval for

actions they had already taken.

Although most states reported no negative impact on their projects,

officials in three states (related to three cases) reported project delays,

funding losses, and other negative impacts because of the federal approval

process. For example, an official from one state’s public welfare office

asserted that the federal delay in reviewing an APD caused the project to

be temporarily delayed for several weeks and that the project staff was

reassigned until the response was received. In another case, the state’s

federal liaison reported that the late federal response caused a delay in the

State Officials Cited

Limited Impact on Projects

Due to Federal Responses

Provided After 60 Days
Page 18 GAO-02-347T Human Services Systems

release of an RFP and the loss of state funding. Specifically, according to

the state’s federal liaison, by the time the state received the final federal

approval of an APD update and accompanying RFP, the state legislature

had frozen spending on all new IT expenditures until the beginning of the

new state fiscal year. As a result, according to this official, as of late June,

the state funding earmarked for this project had not been released and the

planned RFP had not yet been issued.

Similar to the responses provided on the effect of the federal delay, in 18

of the 24 cases in which the federal agency requested additional

information,28 state officials stated that the federal requests were

reasonable. For example, ACF disagreed with one state’s APD update

request because it contained inadequate cost and benefit information and

requested that the state resubmit a revised document. The state official for

this project agreed with the agency’s assessment and resubmitted a

revised APD update. However, in six cases (in two states), the state

officials did not believe that the federal request was reasonable. For

example, one state Chief Information Officer stated that although there

were some valid points in ACF’s response to an APD request, other points

(1) indicated a lack of technical sophistication or understanding of the

state project and (2) misapplied the federal regulation. This Chief

Information Officer noted that the state had to devote staff time to

responding to these federal issues.

Although they generally did not cite a negative impact in the particular

cases in our review, officials from about one-third of the states in our

review mentioned problems related to the overall federal approval process

or sought a more streamlined process. For example, officials in two states

told us that the overall process takes too long. One of these officials noted

that each part of the federal review process “seems to take 60 days” and

makes the overall time too long. Other comments were that (1) it is

challenging to meet the many requirements for receiving federal funds,

(2) the federal APD process is costly to comply with, and (3) federal

reviewers are not as accessible as in the past and communication had

declined. Finally, according to an official in one state, one agency

routinely requested more information than the official believed was

necessary, asserting that about one-half of his staff was needed to respond

to these requests.

 28In some cases, the federal agency approved the state request but also requested that

additional information be provided.
Page 19 GAO-02-347T Human Services Systems

ACF’s acting deputy assistant secretary for administration and FNS’

information technology division director noted that we did not address

what, if any, concerns the federal agencies had with the state submissions

in our review or the validity of the state officials’ views. As I mentioned at

the beginning of my statement, the scope of our review was limited to

analyzing the timeliness of the federal response and discussing the effect

of the response with appropriate state officials. Accordingly, we did not

review the adequacy of the federal responses or corroborate the views of

the state officials.

Responding to state complaints that the APD process was burdensome

and a prior GAO recommendation to identify and implement plans to

facilitate states’ efforts to improve their systems, 29 in June 2000 ACF, CMS,

and FNS established a workgroup to improve the federal approval process.

In the summer of 2001, this workgroup, which obtained feedback on the

approval process from nine states, proposed raising the threshold for

when states have to submit a request for approval. The workgroup

originally believed that this change could be done administratively.

However, HHS’s Office of the General Counsel ruled that such a change

would have to go through the regulatory process, which involves a review

process and public comment period. As of mid-April, the chair of this

workgroup stated that the agencies had not yet decided whether to pursue

a regulatory change. This workgroup also considered whether to propose

other changes to the federal approval process, such as adopting a

streamlined APD format used by CMS for requests related to the Health

Insurance Portability and Accountability Act.

After several meetings to discuss and develop plans, the progress of this

workgroup has stalled. According to the chairman of the workgroup, little

progress has been made since the summer of 2001. He stated that progress

began to slow down when the agencies underwent leadership changes. In

addition, according to the chairman, although the workgroup has

continued to meet, there is no consensus among the federal partners about

the direction to take in improving the federal process. As a result, at this

time there are no plans to change the APD process.

 29U.S. General Accounting Office, Welfare Reform: Improving State Automated Systems

Requires Coordinated Federal Effort, GAO/HEHS-00-48 (Washington, D.C., Apr. 27, 2000).

Federal Agencies Began

Work to Improve the

Federal Approval Process,

but Progress Is Slow
Page 20 GAO-02-347T Human Services Systems

While federal officials from the departments of Agriculture and HHS stated

that they ensure the consistency of cost allocation requirements for IT

projects by coordinating their reviews, we identified instances of

inconsistent federal actions. Specifically, in 3 of 11 cases we reviewed,30

FNS and HHS provided different directions to the states, largely due to a

lack of effective coordination among the federal departments. State

officials told us that such federal inconsistency can cause additional state

staff time to negotiate and resolve the differences and ultimately can affect

a project’s funding.

When submitting an APD or, in some cases, an APD update, states are

required to submit cost allocation plans. These plans are used to identify,

measure, and allocate expected project costs between the state and the

federal program(s). Governmentwide guidance pertaining to cost

allocation is explained in OMB Circular A-87 and in A Guide for State,

Local, and Indian Tribal Governments: Cost Principles and Procedures

for Developing Cost Allocation Plans and Indirect Cost Rates for

Agreements with the Federal Government—Implementation Guide for

Office of Management and Budget Circular A-87. The cost allocation

requirements set forth in OMB Circular A-87 are based on 31 U.S.C.

1301(a), which provides that an agency, absent statutory authority, may

not expend appropriated funds for purposes other than those for which

the appropriations were made. Since the cost allocation principles that are

articulated in OMB Circular No. A-87 are statutorily based, they are not

subject to agency discretion. Moreover, the principles also apply to

appropriations provided through an agency grant to a state, such as in the

case of the four programs in our review.

OMB Circular A-87 provides the states wide latitude in developing a cost

allocation plan. According to the circular, to receive federal approval, the

cost allocation plan must be complete and provide sufficient detail to

demonstrate that the costs are allowable and fairly allocated among the

various federal and state programs that benefit from the project. Thus,

states are free to submit plans using a wide variety of methodologies,

within the scope of the requirements set forth by OMB Circular A-87. For

 30These 11 cases were common submissions in which at least one of the departments’

responses to the state exceeded 60 days. There could be additional state submissions sent

to both the departments of Agriculture and HHS that we did not identify because both

departments responded within 60 days or the documents were not clear that it was a

common submission (e.g., the dates of the state submission to the two departments were

significantly different).

Agency Responses to

State Cost Allocation

Plans for IT Projects

Are Sometimes

Inconsistent
Page 21 GAO-02-347T Human Services Systems

example, a state may submit a cost allocation methodology that allocates

project costs based on the size of program caseloads.

State cost allocation plans for systems development and acquisition

projects must be approved by each federal agency expected to provide

funding. In the case of multiprogram projects, ACF’s State Systems Policy

Division coordinates the review of these plans by the various program

divisions within the department to help ensure that the circular is

consistently applied within HHS. This division also helps resolve

differences resulting from the various program division reviews and then

issues the department’s response to the state request. FNS performs a

separate review and provides its own response to a state for multiprogram

reviews. FNS, ACF, and CMS officials stated that they coordinate their

cost allocation issues to ensure consistency.

Although the federal agencies reported coordinating their responses, we

found examples of inconsistent federal responses. Specifically, while ACF

and FNS provided a consistent response in eight cases in which there was

a common APD or APD update submitted to the agencies (i.e., neither

department disagreed with the plan submitted by the state), in three other

cases (for three states), one agency questioned the cost allocation plan or

methodology proposed by the state, whereas the other did not. In one

example, FNS approved an APD update, whereas ACF did not approve the

same submission, in part due to cost allocation concerns. Although after

several discussions with ACF, the state agreed to change the case load

statistics being used in support of its cost allocation plan, it also requested

that FNS and ACF coordinate their instructions to the state in reviewing

the revised plan. Figure 3 provides a timeline of this example, which

illustrates this disagreement as well as the 13 months and multiple state

submissions necessary before federal approval was provided. State

officials involved in this case stated that receiving inconsistent initial

directions from federal agencies, having to negotiate an agreement

satisfactory to both federal agencies, and having to change their cost

allocation plan took three state staff over 2 months and may negatively

affect the amount of the federal funding reimbursement for this project.
Page 22 GAO-02-347T Human Services Systems

Figure 3: Timeline of a Sample Cost Allocation Case In Which the Federal Responses Were Inconsistent

Source: GAO, based on agency and state documents.

In another example, FNS questioned a state’s submission of an APD

update because the submission did not contain a cost allocation plan and

requested the state to submit documentation explaining how the costs

would be allocated for this project. However, ACF (responding on behalf

of CMS) approved the APD update without comment.

Examples such as these illustrate the importance of effective federal

coordination. At the conclusion of our review, HHS officials stated that

communication among the federal agencies on multiprogram projects is

very important and may have deteriorated in recent years due to

significant staff attrition. One of the ACF officials also asserted that there

can be valid reasons for agencies having different opinions of a state’s cost

allocation plan. Nevertheless, the HHS officials acknowledged that the

correspondence from the federal agencies to the states should be explicit

and well-coordinated in order to avoid misunderstandings. Without such

coordination, states can be put in the untenable position of trying to

satisfy competing or even contradictory federal direction.

In summary, Mr. Chairman, the federal approval and funding process in

which states are required to submit various planning and acquisition

documents for federal agency approval is largely governed by regulation.

As a result, changing the existing process would require modifying

Feb. 

2001

May

2001

July

2001

Oct.

2001

Jan.

2002

Apr.

2002

State submits

APD update to 

FNS and HHS

FNS requests

information, 

no cost 

allocation issues

HHS requests

information, 

cost allocation

issues

State resubmits

revised APD

update to

FNS and HHS

 

FNS

approves

state

resubmittal

HHS does not 

approve

state resubmittal,

citing cost

allocation issues

State agrees

to revise cost

allocation plan

State resubmits

revised APD

update to

FNS and HHS

FNS

approves

resubmission

HHS conditionally

approves

resubmission (no 

cost allocation

issues)

July

2002
Page 23 GAO-02-347T Human Services Systems

regulations and, possibly, legislation to amend current statutes. One major

concern that the states have with this process is that it can be untimely

and can negatively affect state system initiatives. However, complete and

reliable data on the total time to process a state request throughout its life

cycle are not available to assess the timeliness of the overall agencies’

approval process. Nevertheless, the federal agencies’ responses to state

requests, which may be to request additional information, generally have

been within 60 days—the timeframe generally prescribed by the

regulations, and when the response has been beyond 60 days, the vast

majority of state officials in our review stated that there was no impact on

the state IT project. However, the federal agencies did not always

adequately coordinate their reviews of one critical aspect of the APD

process, the cost allocation plan.

State concerns regarding the timeliness of federal reviews and

inconsistent federal responses could be addressed by the federal agencies’

workgroup formed to improve the federal approval process, but this group

has made little progress in the 2 years it has been in place, and it has no

plans to change the APD process. This workgroup needs to expeditiously

reach agreement on a plan, including specific tasks and milestones that

will address improving the APD process, including (1) the feasibility of

tracking state requests throughout their life cycle and (2) how the

departments of Agriculture and HHS can more effectively coordinate their

responses to the states.

For information about this testimony, please contact me at (202) 512-6257

or by E-mail at mcclured@gao.gov. Individuals making key contributions

to this testimony include Robert Crocker, Jr., Pamlutricia Greenleaf,

Norman Heyl, James Houtz, Franklin Jackson, Brian Johnson, and Linda

Lambert.

Contacts and

Acknowledgments
Page 24 GAO-02-347T Human Services Systems

Food Stamps: This program provides low-income households with

coupons or electronic benefits transfer cards to ensure that they have

resources with which to obtain food. The Food and Nutrition Service

(FNS) funds the program benefits, while state agencies administer it at the

state and local levels.

Child Support Enforcement: This federal/state-funded program

provides four major services—locating noncustodial parents, establishing

paternity, establishing child support obligations, and enforcing child

support orders—to ensure that children are financially supported by both

parents. The Administration for Children and Families (ACF) provides

funding to states and local governments to run this program.

Child Welfare: This federal/state-funded program provides federal grants

for programs delivering foster care, adoption assistance, independent

living for older foster children, family preservation and support services,

child welfare services, prevention of neglect/disabled infants, and

programs designed to improve the investigation and prosecution of child

abuse and neglect cases. ACF provides grants to states and local agencies

to develop and administer such programs.

Medicaid: This is a federal/state-funded health care program furnishing

medical assistance to eligible needy persons, which is overseen by the

Centers for Medicare and Medicaid Services (CMS). Within broad federal

guidelines, each state establishes its own eligibility standards; determines

the type, amount, duration, and scope of services; sets the rate of payment

for services; and administers its own program.

Appendix I: Selected Federally Funded StateAdministered Human Services Programs

Department of

Agriculture

Department of Health

and Human Services
Page 25 GAO-02-347T Human Services Systems

To determine the statutory and regulatory requirements for federal

approval and funding of state information technology (IT) development

and acquisition projects for the Child Support Enforcement, Child Welfare,

Medicaid, and Food Stamps programs, we reviewed applicable provisions

of the U.S. Code and Code of Federal Regulations. In addition, we

reviewed committee and conference reports to ascertain the legislative

history of certain provisions.

To assess whether agency processes for reviewing, approving, and funding

state IT development and acquisition projects for the four programs in our

reviews hindered or delayed states’ efforts to obtain approval for these

projects, we reviewed the departments of Agriculture and HHS’s

regulations, policies, and procedures related to the approval of Advance

Planning Documents (APD), APD updates, requests for proposals (RFP),

and contracts and contract modifications. We also interviewed applicable

agency officials, including the chairman of the workgroup formed to

improve federal processes.

In addition, we obtained information from ACF, CMS, and FNS on the time

it took for the agencies to respond to state requests that were submitted in

fiscal years 2000 and 2001. For ACF and CMS headquarters, this

information was obtained from the State Systems Approval Information

System (SSAIS). We assessed the reliability of this system by reviewing the

documentation supporting the cases listed in the SSAIS that were over 60

days old and a sample of cases that were listed as having been completed

in 60 days or less. Except for the Child Support Enforcement program, the

types of errors we found did not affect the results of our analysis. In the

case of Child Support Enforcement, the type and extent of errors we found

caused us to verify the dates of all cases in the system against the actual

documentation. While we were able to perform sufficient work to perform

the analysis provided in this report, we found a significant number of

errors in the dates contained in this system, which is explained further in

appendix IV.

Because CMS regional offices and FNS do not have a central system that

tracks state requests, we obtained summary data from these organizations,

which we verified. For FNS, we obtained all relevant documentation

needed to confirm the state request and federal response dates because

our preliminary analysis found substantive errors in the summary provided

by the agency. For CMS, we obtained relevant documentation on all

requests that took over 60 days to complete and a sample of all those that

took 60 days or less.

Appendix II: Scope and Methodology
Page 26 GAO-02-347T Human Services Systems

We also reviewed 51 cases for 22 states in which the federal agency

responded to the state in over 60 days to assess the types of issues

involved and ascertain the reasons why it took longer than 60 days. We

chose cases to obtain a variety of states and types of requests (e.g., APD,

APD update, RFP, or contract). We interviewed applicable federal analysts

to determine why the response was delayed. In addition, we interviewed

appropriate state officials about the reasonableness of the federal

response and to ascertain what impact, if any, the federal delay had on the

project. However, we did not assess the adequacy of the analyses

performed and subsequent response by the applicable federal agency.

Table 4 shows the number of cases we reviewed by state and program.

Table 4: Cases We Reviewed That Took over 60 Days for a Federal Response, by State and Program

Department of Health and Human Services

Department of

Agriculture

State

ACF/Child

Support

Enforcement

ACF/Child

Welfare CMS/Medicaid Multiprograma

FNS/Food Stamps

Alaska 1 ADP update None None None None

Arizona None None None 1 APD update None

Arkansas 1 contract None None None None

California

1 APD update

1 contract None None 3 APD updates

5 APD updates

1 contract modification

Delaware

1 APD update

2 contract

modifications None None None None

Georgia None None 1 APD 1 APD None

Idaho 1 RFP None None None None

Illinois None

1 APD update

2 contracts None None None

Maine None None 1 APD update None None

Maryland None 1 APD update None

1 contract

modification 1 APD update

Missouri None None None None 1 APD update

Nevada None 1 APD update None None 2 APD updates

New Hampshire None None 1 APD None None

New Jersey 1 APD update None None

2 APDs

3 APD updates None

New Mexico 1 APD update None None 1 APD None

North Dakota 1 APD update 1 APD update None None None

Pennsylvania

1 RFP

1 contract

modification None 1 APD None None

South Carolina None None 1 APD None None

Utah None None None 1 APD update None
Page 27 GAO-02-347T Human Services Systems

Department of Health and Human Services

Department of

Agriculture

State

ACF/Child

Support

Enforcement

ACF/Child

Welfare CMS/Medicaid Multiprograma

FNS/Food Stamps

Vermont None None None 1 contract None

West Virginia None None None None 1 contract

Wyoming

1 APD update

1 contract None None None None

a

This category contains state requests that involved two or more of the HHS programs in our review.

For multiprogram requests at HHS, the department sends a single response to the state. The majority

of the cases in the Child Support Enforcement, Child Welfare, and Medicaid categories were for

single-program requests (some requests included other federal programs).Source: GAO, based on

agency documentation.

To determine how agencies ensure that they consistently apply the Office

of Management and Budget’s (OMB) Circular A-87, for funding IT

development and acquisition projects, we reviewed the circular and

discussed its applicability with officials from OMB and each of the

agencies. We also compared the departments of Agriculture and HHS’s

responses for 11 APDs and APD updates.

We performed our work at ACF headquarters in Washington, D.C.; CMS

headquarters in Baltimore, Md., and FNS headquarters in Alexandria, Va.;

CMS regional offices in Atlanta, Ga., Boston, Ma., and San Francisco, Ca.;

and FNS regional offices in Atlanta, Ga., Boston, Ma., Robbinsville, N.J.,

and San Francisco, Ca. We conducted our review between August 2001

and mid-June 2002 in accordance with generally accepted government

audit standards.
Page 28 GAO-02-347T Human Services Systems

Department of Health and Human Services Department of Agricultur

Type of request

ACF/Child Support

EnforcementaACF/Child WelfareaCMS/MedicaidaFNS/Food Stamps

State requirements

APDs 42 U.S.C. Sec. 654(16)

requires states to submit

APDs for mandated

statewide automated data

processing and information

retrieval systems.b

 Also

covered by requirements

set forth in 45 C.F.R. Sec.

95.611.

45 C.F.R. Sec. 95.611

requires states to obtain

prior written approval of

APDs for automated data

processing systems if the

system is expected to

exceed $5 million ($1 million

if noncompetitively acquired

from a nongovernment

source).

See Child

Welfare

requirements

7 C.F.R. Sec. 277.18 (c)

requires states to obtain

prior written approval of

APDs for automated data

processing systems with an

expected cost exceeding

$5 million ($1 million if

noncompetitively acquired

from a nongovernment

source).. If the request

involves electronic benefits

transfer systems, there is no

threshold.

APD updates 42 U.S.C. Sec. 654(16)

requires states to annually

update their APDs. Also

covered by requirements

set forth in 45 C.F.R. Sec.

95.611, as explained in the

Child Welfare column.

45 C.F.R. Sec. 95.611

requires states to annually

update their APDs when the

project has a total

acquisition cost of $5 million

or, in the case of “as

needed” APD updates,c

when the change causes an

increase of more than $1

million, a schedule

extension of 60 days or

more for major milestones, a

significant change in the

procurement approach, a

change in system concept

or scope, or a change to the

approved cost allocation

methodology.

See Child

Welfare

requirements

7 C.F.R. Sec. 277.18 (e)

requires states to annually

update their APDs if the

expected cost of the project

is expected to exceed $5

million or, in the case of “as

needed” APD updates,c

when the change causes an

increase of more than $1

million, a schedule

extension of 60 days or

more for major milestones, a

significant change in the

procurement approach, a

change in system concept

or scope, or a change to the

approved cost allocation

methodology.

RFPs 45 C.F.R. Sec. 95.611

requires states to submit

RFPs for approval for

purchases of automated

data processing equipment

or services if it exceeds $5

million when competitively

acquired and $1 million

when non-competitively

acquired.

See Child Support

Enforcement requirement

See Child

Support

Enforcement

requirement

7 C.F.R. Sec. 277.18 (c)

requires states to submit

RFPs for approval for

purchases of automated

data processing systems

with an expected cost

exceeding $5 million if

competitively bid and $1

million if not competitively

bid. If the request involves

electronic benefits transfer

systems, there is no

threshold.

Appendix III: Selected Federal Statutory and

Regulatory Requirements Related to

Obtaining Federal Financial Participation

Funding
Page 29 GAO-02-347T Human Services Systems

Department of Health and Human Services Department of Agricultur

Type of request

ACF/Child Support

EnforcementaACF/Child WelfareaCMS/MedicaidaFNS/Food Stamps

Contracts/

contract

modifications

45 C.F.R. Sec. 95.611

requires states to submit

contracts for approval for

purchases of automated

data processing equipment

or services if the system is

expected to exceed $5

million when competitively

acquired and $1 million

when noncompetitively

acquired. Approval is

required of a contract

modification if it includes

an increase of more than

$1 million or more than a

120-day schedule change.

See Child Support

Enforcement requirement

See Child

Support

Enforcement

requirement

7 C.F.R. Sec. 277.18 (c)

requires states to submit

contracts for approval for

purchases of automated

data processing equipment

or services if the system is

expected to exceed $5

million when competitively

acquired and $1 million

when noncompetitively

acquired. If the contract

involves electronic benefits

transfer systems, there is no

threshold. Approval is

required of a contract

modification if it includes an

increase of more than $1

million or more than a 120-

day schedule change.

Federal approval

requirements

APDs 45 C.F.R. Sec. 95.611

requires the agency to

approve, disapprove, or

request additional

information within 60 days

of the date of

acknowledgment of receipt

of the state request. States

automatically receive

provisional approval, which

allows the state to proceed,

if the federal response is

not provided within 60

days.

See Child Support

Enforcement requirement

See Child

Support

Enforcement

requirement

7 C.F.R. Sec. 277.18 (c)

requires the agency to

approve, disapprove, or

request additional

information within 60 days of

the date of acknowledgment

of receipt of the state

request. States

automatically receive

provisional approval, which

allows the state to proceed,

if the federal response is not

provided within 60 days.

APD updates No statutory or regulatory

time limit is set for

approval.

No statutory or regulatory

time limit is set for approval.

No statutory or

regulatory time

limit is set for

approval.

7 C.F.R. Sec. 277.18 (c)

requires the agency to

approve, disapprove, or

request additional

information within 60 days of

the date of acknowledgment

of receipt of the state

request. States

automatically receive

provisional approval, which

allows the state to proceed,

if the federal response is not

provided within 60 days.
Page 30 GAO-02-347T Human Services Systems

Department of Health and Human Services Department of Agricultur

Type of request

ACF/Child Support

EnforcementaACF/Child WelfareaCMS/MedicaidaFNS/Food Stamps

RFPs 45 C.F.R. Sec. 95.611

requires the agency to

approve, disapprove, or

request additional

information within 60 days

of the date of

acknowledgment of receipt

of the state request. States

automatically receive

provisional approval, which

allows the state to proceed,

if the federal response is

not provided within 60

days.

See Child Support

Enforcement requirement

See Child

Support

Enforcement

requirement

7 C.F.R. Sec. 277.18 (c)

requires the agency to

approve, disapprove, or

request additional

information within 60 days of

the date of acknowledgment

of receipt of the state

request. States

automatically receive

provisional approval, which

allows the state to proceed,

if the federal response is not

provided within 60 days.

Contracts/

Contract

modifications

45 C.F.R. Sec. 95.611

requires the agency to

approve, disapprove, or

request additional

information within 60 days

of the date of

acknowledgment of receipt

of the state request. States

automatically receive

provisional approval, which

allows the state to proceed,

if the federal response is

not provided within 60

days.

See Child Support

Enforcement requirement

See Child

Support

Enforcement

requirement

7 C.F.R. Sec. 277.18 (c)

requires the agency to

approve, disapprove, or

request additional

information within 60 days of

the date of acknowledgment

of receipt of the state

request. States

automatically receive

provisional approval, which

allows the state to proceed,

if the federal response is not

provided within 60 days.

a

The thresholds discussed in this table address only current IT development and acquisition projects.

Different or no thresholds apply to those IT projects that began when the Child Support Enforcement,

Child Welfare, and Medicaid programs provided enhanced funding to states.

b

The Family Support Act of 1988 requires states to implement statewide child support enforcement

systems.

c

APDs are required to be updated annually or “as needed,” which is defined as when there is a

projected cost increase of $1 million or more, a schedule extension for major milestones of more than

60 days, a significant change in the procurement approach, a change in system concept or scope, or

a change to the approved cost allocation methodology.

Source: GAO, based on an analysis of applicable federal statutes and regulations.
Page 31 GAO-02-347T Human Services Systems

Federal response timeb

Agency/program Type of requesta 0–60 days Over 60 days

Percentage over 60

days (%)

ACF/Child Support Advance planning document (APD) 8 1 11

Enforcement APD updatec

80 43 35

Request for proposal (RFP) 106 6 5

Contract/contract modification 120 13 10

ACF/Child Welfare APD 10 2 17

APD updatec71 11 13

RFP 32 1 3

Contract/contract modification 80 5 6

CMS/Medicaidd

APD 149 10 6

APD updatec42 4 9

RFP 39 1 3

Contract/contract modification 120 5 4

HHS multiprograme

APD 10 5 33

APD updatec22 8 27

RFP 9 0 None

Contract/contract modification 19 2 10

FNS/Food Stamps APD 24 1 4

APD update 21 8 28

RFP 23 0 None

Contract/contract modification 26 2 7

a

For ACF and Medicaid headquarters, which use a common tracking system, each state submission,

along with its federal response, is generally tracked separately. Therefore, if ACF or CMS

headquarters responded to a state by requesting additional information, the state response (or

resubmission of a corrected document) would be counted as a second submission. In contrast, under

the same scenario, FNS and CMS regional offices, which do not have a central tracking system,

would count the state response or resubmission as part of the original submission.

b

According to regulations of the departments of Agriculture and HHS, the 60-day requirement for

federal response begins on the date the federal government sends an acknowledgement letter to the

state. While ACF and CMS headquarters sent acknowledgement letters, some FNS and CMS

regional offices did not. In the latter instances, we calculated the time to respond from the regional

office receipt date stamp or date of the state letter. This federal response generally took the form of a

letter or E-mail, but in a few cases it was a documented telephone call or a meeting with state

officials.

c

The regulation does not set a time limit for a federal response to an APD update for these programs.

d

Three additional Medicaid cases are not included in this table because the applicable regional offices

(1) did not review two state requests and (2) could not provide the date of the state request.

e

This category contains state requests that involved two or more of the HHS programs in our review.

For multiprogram requests at HHS, the department sends a single response to the state. The majority

of the cases in the Child Support Enforcement, Child Welfare, and Medicaid categories were for

single-program requests (some requests included other federal programs).

Source: GAO analysis based on agency information.

Appendix IV: Number of Days for Federal

Response to a State Request
Page 32 GAO-02-347T Human Services Systems

In attempting to obtain statistics on how long the federal agencies took to

respond to state requests, we encountered substantial data reliability

problems related to the SSAIS, which is used to track these data for the

Child Support Enforcement, Child Welfare, and Medicaid (headquarters

only) programs.31 The SSAIS assigns a tracking number to each state

submission, and ACF officials are responsible for entering information

related to the federal review process, including the date that the state

request was acknowledged and the date that the federal response was

sent.32 SSAIS also calculates the number of days in review based on these

dates.

To determine whether we could rely on the number of days in review

calculated by this system, we performed a preliminary review of a sample

of cases. Because we found numerous errors during this preliminary

review, we decided to limit our analysis to determining the number of

federal responses completed within or over 60 days. Accordingly, we

checked the dates in the system for all cases reportedly over 60 days and a

sample of cases 60 days or less and made adjustments to the data as

needed.33 We found that over half of the cases we reviewed had errors in

one or more of the dates in the system. However, only a few of the errors

affected the category in which the case was placed.

An official in ACF’s Office of Child Support Enforcement attributed the

incorrect dates in the system to a number of reasons, including (1) human

error in entering the data; (2) a system that is not user friendly;34 (3) the

official not being informed when superiors actually sign a response; and

(4) the official not being informed when administrative staff date and send

the response. ACF needs to ensure that appropriate processes are put in

 31CMS headquarters reviews state Medicaid eligibility system requests, while its regional

offices review other Medicaid system requests (primarily related to Medicaid Management

Information Systems). There is no central system used to track state requests and federal

responses for the regional offices.

32Because CMS cannot enter data into the SSAIS, ACF performs this function for this

agency.

33Because we found three errors related to the Child Support Enforcement program in

which the category the case was to be placed in moved from 60 days and below to over 60

days, we reviewed all cases for this program.

34When entering the case closure, the system defaults to the current date, and it takes

several operations to change the date to the date of the letter, if it is different. Also, in

certain situations, when program managers query the system to determine the current

status of cases, the system will automatically close the case on the date of the query.

Appendix V: Data Reliability Concerns
Page 33 GAO-02-347T Human Services Systems

place to make certain that the data in the SSAIS are accurate and reliable

to improve its usefulness as a management tool.

(310423)