Human Services Integration: Results of a GAO Cosponsored Conference on Modernizing Information Systems
Published: 2002-01-31T00:00:00

Fast Facts:

Highlights:
section_title: What GAO Found
paragraphs: The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 replaced the Aid to Families With Dependent Children program with a block grant to states that provide Temporary Assistance for Needy Families (TANF). TANF strongly emphasizes work and job replacement and sets a five-year lifetime limit on federally funded TANF assistance to adults. To meet information needs for welfare reform, information systems must be able to share data across various programs, including TANF, Medicaid, job training, child care, and vocational rehabilitation. However, previous GAO studies found major gaps in states' information systems. Most of the local TANF administrators in 15 states surveyed by GAO reported that their current systems provide half or less of the information needed to manage individual cases, plan appropriate services for the caseload, and monitor overall program performance. The administrators are missing information because some of the systems used do not share data on these recipients, which constrains the ability of case managers to arrange and monitor the delivery of services. Five states--New Jersey, North Carolina, Oregon, Utah, and Wisconsin--are modernizing their information systems to take advantage of recent technological advances. These initiatives have expanded their data-sharing capabilities to enhance program management and service integration. Three key challenges confront systems modernization: enhancing strategic collaboration among different levels of government, simplifying the cumbersome approval process for obtaining federal funding for information systems, and obtaining staff expertise in project management and information technology.

section_title: Letter
paragraphs: Information systems play a central role in the management of human  services programs. Ideally, the systems provide information and tools used  by case managers to assess individual clients, refer them to needed  services, and track their progress. Likewise, information systems have the  potential to provide information used by program administrators to  ascertain caseload characteristics and service needs and determine the  extent to which program objectives are being achieved.
States face new information systems challenges as a consequence of the  sweeping changes brought about by welfare reform. The Personal  Responsibility and Work Opportunity Reconciliation Act (PRWORA) of  1996 (P.L. 104-193) replaced the Aid to Families With Dependent Children  (AFDC) program with a block grant to states to provide Temporary  Assistance for Needy Families (TANF). TANF has a heightened emphasis  on work and job placement and establishes a 5-year lifetime limit on  adults’ receipt of federally funded TANF assistance. To meet information  needs for welfare reform, information systems must be able to share data  across the numerous programs that are being used to help support  families’ movement to economic independence, such as TANF, Medicaid,  job training, child care, and vocational rehabilitation. However, previous  studies, including those by the U.S. General Accounting Office (GAO),  have identified major gaps in the capabilities of states’ information  systems to meet such needs.
To assist congressional oversight and inform our work in the area of  information systems for human services, GAO and the Nelson A.  Rockefeller Institute of Government established a working group of  experts from diverse organizations in March 1998. The group met eight  times over 3 years, culminating in a conference held in Reston, Virginia, on  June 28 and 29, 2001, that focused on the critical issues that states face in  developing information systems to support objectives such as integrated  service delivery and performance monitoring across human services  programs. Specifically, the conference examined (1) the capabilities of  state information systems to meet information needs for welfare reform,  (2) initiatives undertaken by states to improve their information systems,  (3) challenges to systems modernization, and (4) strategies to improve  state information systems and facilitate service integration. About 70  participants attended the conference, including congressional staff;  federal, state, and local program and information technology managers;  welfare researchers; information system contractors; and representatives  of private, non-profit foundations. The conference featured a mix of paper  presentations and discussions and the development of ideas by  participants in small discussion groups. This report summarizes the  conference proceedings.
subsections: section_title: Background
paragraphs: The conference, whose theme was “Realizing the Promise of Technology:  Modernizing Information Systems for Human Services,” was co-sponsored  by GAO, the Rockefeller Institute, the National Health Policy Forum, and  The Finance Project (Welfare Information Network). To promote an  informed dialogue at the conference, invitations were sent to selected  individuals from four key sectors involved in developing information  systems for human services—the Congress, federal agencies, state and  local governments, and information technology contractors—along with  research organizations and foundations. Appendix II lists the names and  affiliations of conference participants. State representatives included  those with responsibility for program management as well as those with  expertise in information technology. Participants from 14 organizations  were asked to prepare papers for presentation at one of three panels—The  Need for Systems Modernization, Possible Approaches for the Future, and  State and Local Experiences. Appendix I contains the conference  objectives, agenda, and Web addresses for each of the papers and briefing  charts presented at the conference. Following the panel presentations,  participants were separated into small groups on the first day to discuss  the history, roles, and challenges of various sectors in systems  modernization, and on the second day to propose actions that would best  facilitate systems modernization. Assignments to each discussion group  were made to achieve a mix of participants from diverse backgrounds.
section_title: Systems Modernization Needed To Better Meet Information Needs For Human Services
paragraphs: Presenters at the conference maintained that state information systems  need to be modernized to better meet new information needs that have  arisen from shifts in the objectives and operations of states’ welfare  programs. Research on states’ systems has identified major gaps in their  capabilities to support the implementation and oversight of welfare  reform. In addition, many states are using large, mainframe systems that  are old, which compounds the difficulty of meeting new information needs  because these systems are limited in their ability to take advantages of  recent innovations in technology. Innovations, such as Internet  technology, offer significant opportunities for improving the delivery of  human services.
subsections: section_title: Shifts in Welfare Program Objectives and Operations Place New Demands on Information Systems
paragraphs: With the advent of welfare reform, states’ programs for needy families  with children have experienced dramatic shifts in their objectives and  operations, which have created new demands on information systems,  according to GAO assistant director Andrew Sherrill and Rockefeller  Institute director Richard Nathan and senior fellow Mark Ragan.PRWORA placed a greater emphasis on the importance of work and  established various signals to reinforce this emphasis, such as stronger  work requirements and a 5-year time limit on federal TANF assistance to  families. The shift from an income maintenance focus under the prior  AFDC program to a service-oriented, self-sufficiency focus under TANF  has significant implications for information systems. The technology  challenge of welfare reform is to provide the information needed to  integrate services to clients and track their progress towards self- sufficiency. 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.
In many cases, states and localities have enhanced their efforts to partner  with other organizations to serve needy families, which creates demands  for sharing data across organizations. As welfare agencies focus on  moving needy families toward self-sufficiency, workers are drawing on  other federal and state programs, often administered by separate agencies,  to provide a wide array of services. While local welfare agencies typically  determine eligibility for TANF, food stamps, and Medicaid, other programs  that provide key services to TANF clients may be administered by separate  entities, such as housing authorities or education agencies. Most notably,  because TANF has focused welfare agencies on employment, a focus that  has long been the province of state and local workforce development  systems, welfare agencies need to work more closely than before with  workforce development systems. Finally, in many cases state and local  welfare reforms involve a greater effort to partner with community  organizations, including faith-based organizations, to meet the needs of  low-income families.
Devolution is another factor that has contributed to the expansion of  information needs for human services. Under PRWORA, states have  greater flexibility in designing and operating their TANF programs and  some states in turn have devolved substantial authority to localities for  their TANF programs. As a result, state information systems will be called  upon to support a potentially more diverse range of local program goals  and operations. Moreover, providing automated support for localities is  typically an evolving process, since local information needs can change as  caseload composition changes, service strategies evolve, or new policy  issues emerge.
section_title: Current Information Systems Do Not Fully Support Information Needs for Welfare Reform
paragraphs: Andrew Sherrill provided an overview of the research done by GAO, in  collaboration with the Rockefeller Institute, on the capabilities of states’  information systems. This research, he said, highlights the need for  systems modernization. In 1999, GAO surveyed state and local program  administrators in 15 states on the overall extent to which their current  information systems met different types of information needs for  administering and overseeing welfare reform. GAO focused on three  broad types of information needs: those for case management, service  planning, and program oversight. Agency workers need information for  case management to perform the full range of tasks involved in  coordinating the various services provided to an individual client, such as  making referrals to training and monitoring a client’s progress towards  employment. Service planning, which is performed by local and state  program administrators, requires aggregate information on the  characteristics and service needs of the caseload to determine the  appropriate services that should be made available for the caseload.  Program oversight, which is performed by program administrators and  oversight officials, requires aggregate information on relevant measures of  program performance, such as job entries and job retention. The majority  of the local officials that GAO surveyed reported that their current systems  provided half or less of the information needed for each of the three types  of information needs. Overall, state officials provided a somewhat higher  assessment of system capabilities but still acknowledged major gaps in  some cases.
Andrew Sherrill explained that GAO’s in-depth fieldwork at the state and  local level in six states provided more detail about information system  shortcomings. A major shortcoming, cited to varying degrees by officials in  these states, is that some of the systems used by the agencies providing  services to TANF recipients do not share data on these recipients, thus  hampering a case manager’s ability to arrange and monitor the delivery of  services in a timely manner. For example, local officials in New Jersey told  GAO that data are not transferred electronically between the labor  department, which tracks attendance of TANF recipients at work  activities, and the welfare department, which imposes sanctions on TANF  recipients who fail to meet work requirements. Consequently, in some  cases, TANF recipients have received sanctions in error because the  welfare department’s system could not obtain the needed data in a timely  manner from the labor department’s system to verify a recipient’s  participation in work activities. Another consequence of the lack of data  sharing in the states GAO studied is that agency workers have had to input  data for some items more than once because the data were not  automatically transferred and updated from one system to another.  Multiple entries of the same data not only reduces the time available for  work directly with clients but also increases the risk of introducing errors  into the data contained in information systems.
The extent to which states have established links among information  systems for human services varies substantially. In the 15 states that GAO  surveyed, the systems that support TANF eligibility determination are, in  almost all cases, linked with the information systems for food stamps,  child support enforcement, TANF work activities, Medicaid eligibility  determination, and transportation subsidies. These links reflect federal  mandates and enhanced federal funding for systems in these programs. In  contrast, GAO found that information systems for other services that  TANF recipients may need to facilitate their movement toward  employment, such as job training, welfare-to-work grant services,  vocational rehabilitation, job listings, and subsidized housing were  generally not linked to systems for determining TANF eligibility. Some  state officials and others attending the conference commented that  changed rules governing interactions between welfare and Medicaid have  also presented new demands for the modification of information systems.  Under these rules, TANF recipients, unlike AFDC recipients, are not  automatically eligible for Medicaid. Not only has more work been required  to demonstrate the eligibility of TANF families for these programs, but  more work has also been required to modify systems so that closures of  TANF cases do not generate automatic closures of Medicaid cases, as has  happened in some situations.
A second shortcoming of some information systems, which was voiced  especially at the local level, was the limited ability to obtain data needed  by program managers to meet their particular management challenges. For  example, local officials at one site told GAO that data on the  characteristics of TANF recipients in the state’s information system are  often not available in a format that can be easily manipulated, so obtaining  data depends on the technical expertise of the user. Overall, local officials  cited a need for user friendly tools that provide the capability to generate a  locally designed management report. In his comments on the presentation  by Andrew Sherrill, Thomas Gais, director of the federalism research  group at the Rockefeller Institute, said that the gaps in systems capabilities  identified by GAO represent persistent problems that were also identified  in earlier fieldwork by Rockefeller Institute researchers and in their  follow-up fieldwork in 2000.
section_title: Age of Many States’ Systems Compounds Difficulty of Meeting New Information Demands
paragraphs: The results of a survey by the U.S. Department of Health and Human  Services (HHS) cited in GAO’s presentation indicate that many states have  been using old information systems. Of the states responding, 26 percent  said that the systems they were using when TANF was enacted in 1996 had  first become operational in the 1970s and 40 percent said that their  systems had become operational in the 1980s. Many of these older  systems are housed in large mainframe computers. The HHS report goes  on to point out that generally accepted information technology standards  assume that the average useful life of a large-scale computer system  ranges from 5 to 7 years. Moreover, the report maintains that the age of  states’ systems has limited their ability to take advantage of technological  improvements because the underlying equipment and software platforms  of these systems do not lend themselves easily, if at all, to technological  advances because of basic incompatibilities. A conference participant  commented that New York’s large mainframe system has not been  modernized because it would be costly and time-consuming. Instead, the  state operates a dual system, relying primarily on its mainframe, but with a  separate system developed to meet new data reporting requirements.  Conference presenters from New Jersey, North Carolina, Oregon, Utah,  and Wisconsin noted that their states continue to use older mainframe  systems to varying degrees, using upgrades and interfaces where possible,  although they are developing new systems to enhance their capabilities.
The continued presence of these older mainframe computers reflects the  historical role of the federal government in funding the development of  such systems in the 1970s and 1980s, according to some conference  participants. The major objectives of these systems were to increase the  accuracy of eligibility determinations and cash payments, reduce error  rates, and detect and deter fraud and abuse in major entitlement programs.  While costs for systems development and operation were shared by the  federal government and states, the federal government provided enhanced  funding (i.e., more than 50 percent) in many cases. For example, states  could receive federal matching funds for 90 percent of their development  costs for approved welfare, Medicaid, child support, and certain child care  systems. States could also receive federal matching funds of 75 percent for  developing statewide food stamps systems, and in the early 1990s, for  developing child welfare systems. In the mid-1990s, the federal  government eliminated enhanced federal matching payments for all  systems except child support and Medicaid management information  systems for claims processing.
Information system contractors from the Human Services Information  Technology Advisory Group (HSITAG) described various innovations in  technology that they said offer significant opportunities for improving the  delivery of human services. Today’s personal computers can process  more data at lower costs, making it possible to automate even small  service providers in the local community. Systems can be secured from  outsiders using firewall technologies, and confidential information that is  transferred among agencies can be encrypted, further increasing security.  Telecommunications networks are more widely available, providing  greater opportunities for data sharing among different programs that serve  the same populations. The Internet and World Wide Web provide  opportunities to link program applicants, recipients, case managers, and  administrators to each other and to a wealth of information needed to  achieve various objectives. Graphical user interfaces allow icons or  pictures to be used as well as words, so it is easier to access and navigate  systems from the computer screen, and the data accessible can be  expanded to include photographs, sound clips, and movies that can  facilitate program orientation, assessment, and training. Coding by  location and mapping represent new capabilities available to program  planners to target services to families and neighborhoods. Other  technological advances make it possible to store and retrieve large  volumes of data with greater efficiency at less cost than was possible a  decade or more earlier to facilitate meeting reporting requirements and  providing information for program oversight.
section_title: Systems Modernization Efforts Are Underway in Several States
paragraphs: Presenters from North Carolina, Oregon, New Jersey, Utah, and Wisconsin  described initiatives that their states had undertaken to modernize  information systems for human services. The initiatives—designed to meet  the unique needs of each state—are in varying stages of implementation  and generally share some common goals, such as enhancing service  integration. The states faced a broad range of issues in developing and  implementing their initiatives, which reflect the complexity and scale of  information systems projects.
subsections: section_title: States’ Initiatives Seek to Enhance Service Integration and Program Management Through Expanded Data Sharing
paragraphs: While the states’ initiatives have a multitude of stated objectives, their  central goals generally include providing enhanced automated support for  service integration and program management. Gary Weeks, director of  human services reform at the Annie E. Casey Foundation, discussed his  experiences in promoting service integration as the former director of the  Oregon Department of Human Resources. He said that many program  recipients fail because they are among the least prepared to deal with the  maze of human services bureaucracy and case management plans—in  some cases multiple plans for a single recipient. His strategy in Oregon  was to create a system in which each recipient had a single case  management plan, based on an initial, comprehensive assessment and  coordinated by a lead case manager who was supported by information  systems that were linked. Creating such a system, he added, did not  require cutting edge technology but rather getting agreement from all the  right people on the recipient data that was most important, securing  access to critical databases, and authorizing case managers to work with  individualized recipient data. Richard Nathan and Mark Ragan of the  Rockefeller Institute echoed this point in their presentation, arguing that  service integration has been a longstanding aim of program officials, but  that the real politics of human services—characterized by bureaucracies  with their own cultures and politics—have made this difficult. They went  on to say that information technology can allow human service providers  to overcome the politics of program proliferation not necessarily through  “one-stops”—co-locating staff from different programs at one-stop  centers—but through “one-screen,” that is, making data from different  programs available to a caseworker on a single computer screen.
With respect to the objective of improving automated support for program  management, three of the states have developed or plan to develop large  data warehouses or smaller data marts, that is, specialized databases that  store information from multiple sources in a consistent format, usually for  a specific subject area, and are separate from the databases used for daily  business operations. Using data warehouses or marts, program  administrators can generate customized management reports on request  without slowing routine business transactions, including reports that track  recipients’ use of government services over time and respond to varied  requests for information from state legislatures, federal agencies, and  research organizations.
While the information systems initiatives of the five states share similar  broad goals, they vary in terms of stages of development, with North  Carolina in the planning phase, Oregon in the pilot phase, and New Jersey,  Utah, and Wisconsin fully operational. What follows is an overview of  some of the distinctive aspects of each state’s initiative.
Bill Cox, director of information resource management at the state’s  Department of Health and Human Services, described North Carolina’s  comprehensive planning effort, the Business Process Re-Engineering  Project.Recognizing that its current mainframe information systems are  at the end of their life cycle, the state developed a model of a reengineered  business process for human services to prepare for the development of a  single, comprehensive statewide information system. This system would  support a wide array of programs, including TANF, Medicaid, children’s  health insurance program, food stamps, child care, child support, child  welfare services, and adult services for families. The reengineered  business process is intended to resolve a host of deficiencies with the  current process, such as excessive paper-based processes, little access to  “real-time” data, and minimal communications among agencies and  partners. As part of the reengineering initiative, a contractor working with  a team of state and county officials for 3 months examined current  business processes and concluded that a minimal amount of time is  actually spent assisting applicants and recipients while the majority of  time is spent on administrative tasks. On the basis of the team’s  recommendations, the state began implementing its initiative in June 2001,  including the development of a data warehouse.
Gary Weeks of the Anne E. Casey Foundation outlined Oregon’s pilot  initiative that uses information technology to support integrated service  provision at Family Resource Centers in 4 of the state’s 36 counties.  Workers from various agencies have been co-located at these centers,  where families and individuals receive an initial comprehensive needs  assessment, a single case management plan is developed with a lead case  manager, and data on the family are available to agencies located at the  center. To provide this shared data, the centers use a software tool called  MetaFrame, which provides access on a caseworker’s computer screen to  the separate databases for TANF, child welfare, and mental health and  substance abuse systems. Caseworkers can obtain information from these  databases on eligibility, services received, and case narrative notes in  some cases, and thereby build their own comprehensive file on a client.  Gary Weeks noted that the software tool’s capabilities are fairly  rudimentary because they do not provide a single integrated database, but  the tool provides caseworkers access to information in a fairly low-tech  and relatively inexpensive manner. To overcome data confidentiality  issues, applicants are asked to sign a release form at the time of their  assessment that authorizes the sharing of their case file data for program  purposes, and about 96 percent of applicants sign this form.
William Kowalski, director of the One Ease-E Link project at the New  Jersey Department of Human Services, explained that a key aim of the  initiative was to employ information technology to support the building of  new cooperative relationships among the diverse providers of human  services in New Jersey and thereby enhance service integration. The  initiative seeks to accomplish this by providing hardware and software to  counties so they can create county-level networks comprised of a  multitude of public and private organizations, including nonprofits such as  United Way organizations. Each county network is part of the larger One  Ease-E Link network that includes a website with an eligibility screening  tool, case management software, secure e-mail, discussion forums,  document libraries, and resource directories. This network is also linked  to a single database shared with three state agencies: the Departments of  Human Services, Labor, and Health and Senior Services. The sharing of  information is secured behind a firewall and protected by Public Key  Infrastructure (PKI) technology that uses digital signatures and encrypts  data. Counties that join One-Ease-E Link maintain their networks through  fees they collect from member service providers. One Ease-E Link has  been implemented by 17 of New Jersey’s 21 counties and more than 900  local service providers have become part of the network.
Russell Smith, deputy director of information technology at the Utah  Department of Workforce Services, described Utah’s development of the  UWORKS One-Stop Operating System. In 1996, the state created the  Department of Workforce Services, which combined 25 programs from 5  different departments with the goal of merging job training, job  development, and welfare-related services such as TANF, food stamps,  and child care into a single efficient system. The new department inherited  various computer systems that had supported each of the programs and  recognized that it needed an integrated case management system that  supported all of its programs. The One-Stop Operating System was  developed to fill this need at nearly 50 one-stop employment centers  throughout the state. The system uses Internet technology and has  linkages with databases for program eligibility, job listings, job training,  labor market information, and unemployment insurance. Job seekers can  access services on their own by using a web browser or obtain help from  state staff at the one-stop centers that offer multiple services under a  single roof. To expand information for program management, the state has  developed a data warehouse that can generate reports in response to on- line queries.
Paul Saeman, acting director of the workforce information bureau in  Wisconsin’s Department of Workforce Development, explained how his  state’s extensive information system has evolved in response to changes in  program objectives and organization. The system serves two state  departments that have split responsibility for human services programs.
His department is consolidating TANF and child care with other  employment programs, while the Department of Health and Family  Services is expanding benefit entitlement programs like Medicaid and food  stamps. To support integrated case management and eligibility  determination across these departments and programs, the state has built  22 subsystems that comprise the Client Assistance for Re-employment and  Economic Support System (CARES). Teams of workers at one-stop job  centers use the Case Manager’s Desktop Reference system to access  CARES data and monitor participant eligibility and services received in 6  or more programs. A plan for sharing the CARES system and developing it  in the future was established by the two departments after many months  of negotiation. While CARES supports day to day program operations, it  also feeds information into a series of small data marts and a larger data  warehouse, called the Wisconsin Data for Operational Management  (WISDOM), that are used for planning and reporting purposes. With the  help of WISDOM, knowledgeable state and local users expect to be able to  create hundreds of different reports in almost endless combinations for  programs such as TANF, child care, and food stamps. In addition, CARES  data compiled over time on families served by TANF and other programs  is being inventoried, documented, and stored as part of the Wisconsin  Program and Administrative Data and used for research and evaluation by  state staff and the Institute for Research on Poverty at the University of  Wisconsin.
section_title: States Confronted a Broad Range of Issues in Developing and Implementing Their Initiatives
paragraphs: The information systems initiatives of these states are complex and large- scale undertakings, and states faced a broad range of issues in developing  and implementing their initiatives. Table 1 summarizes some of the issues  most commonly reported by the state presenters and provides examples of  responses taken to these issues. For example, these issues include  obtaining support for the initiative, training system users, maximizing the  useful life of the system, and managing the project effectively. These  issues are not unique to the human services but are the general types of  issues that arise in large-scale information systems projects.
section_title: Challenges for Systems Modernization Pertain to Intergovernmental Collaboration, Federal Funding Processes, and Project Management
paragraphs: Conference participants identified and discussed at length three key  challenges for systems modernization: enhancing strategic collaboration  among different levels of government, simplifying the cumbersome  approval process for obtaining federal funding for information systems,  and obtaining staff expertise in project management and information  technology. These challenges were identified in the small group sessions  and elaborated in greater depth in several of the conference papers.
subsections: section_title: Enhancing Strategic Collaboration Among Federal, State, and Local Governments
paragraphs: A key challenge to modernization and integration identified by conference  participants is that of achieving greater strategic collaboration across  programs and agencies and among levels of government. This challenge  was articulated in the presentation by Sandra Vargas, Administrator of  Hennepin County, Minnesota, and Costis Toregas, president of Public  Technology Incorporated, who provided a local perspective on  information technology issues. Vargas and Toregas reminded other  participants of the importance of including localities when states and  federal agencies develop plans for human service programs and  information systems. In their view, the guiding vision in this area should  be that of “local, state, and federal governments investing and executing  together around a citizen-oriented service delivery model that produces  measurable results” and they see technology as the tool to execute the  vision. However, they maintained that what is still missing is a framework  for achieving this vision that is truly collaborative. They added that greater  collaboration could promote such outcomes as information technology  investments that build on one another and work being performed by the  level of government best able to accomplish the task.
Richard Nathan and Mark Ragan of the Rockefeller Institute echoed the  need for more intergovernmental collaboration in their presentation. They  maintained that many of the recommendations that have been made in the  last decade to facilitate systems improvements have expressed a common  theme—that federal agencies should improve and integrate their policies  and procedures. However, in their view, it is not reasonable to expect all  solutions to come from the federal government or that federal changes will  necessarily and quickly result in better state and local information  systems. They maintained that federal, state, and local governments, as  well as technology contractors, all have a role to play in systems  modernization for human services and that improvements are needed in  the interactions of these partners. Nathan and Ragan proposed that an  institute for the management of human services information systems be  created that would, among other objectives, convene federal, state, and  local officials across program areas to discuss ways to remove barriers to  system development.
Some conference participants commented that the federal government  could play a greater collaborative role in facilitating systems  modernization. They explained that in the 1970s and 1980s, the Congress  and federal agencies had taken the lead in encouraging states to invest in  technology to improve services to needy families. But, they added that  they currently see little coordinated federal effort to help states and  localities invest wisely in technology, learn from the best practices as well  as the mistakes of others, and tailor information systems to meet local  needs. Instead, they are left with the impression that federal agencies  primarily regulate rather than facilitate systems development for human  services, and do so in a narrow context, prescribing details rather than  providing broader strategic guidance.
Another area cited in which the federal government could play an  improved collaborative role pertains to the enactment of legislation that  has implications for state systems. Some conference participants  commented that in certain instances, federal legislation is enacted that  does not anticipate adequately the time and cost required to develop or  modify state information systems. For example, several conference  participants noted that legislative deadlines for systems implementation  often follow a “one size fits all” approach that places all states in  competition for a limited number of private contractors and fails to  accommodate differences in state capabilities. Another participant said  that states do not receive sufficient federal funding for the costs of  providing benefits to needy families through electronic benefit transfers.  Several participants also cited the extensive efforts required of diverse  state agencies to re-examine the privacy and security of their automated  data as a result of the passage of the Health Insurance Portability and  Accountability Act of 1996 (P.L. 104-191).
section_title: Simplifying Cumbersome Approval Process for Obtaining Federal Funding
paragraphs: Obtaining approval for federal funding of state information systems  development and operations can be a slow and burdensome process that  delays project implementation, according to various participants at the  conference. Participants cited problems with both the overall approval  process for obtaining funding—the advanced planning document (APD)  process—and the cost allocation component of this process. As shown in  table 2, states must submit required documents under the APD process  and receive federal approval from the relevant federal agency to obtain  federal funding for systems development for Medicaid, food stamps, child  welfare and child support enforcement. An APD is not required if TANF  funds only are used for a project, because TANF is a block grant. As part  of the APD process, states submit specific documents, including planning,  contracting, and purchasing documents, which cover needs, objectives,  requirements analysis, alternatives analysis, project management plan,  cost benefit analysis, proposed budget, and any proposed cost allocation.  If federal agencies do not respond within 60 days, approval is automatic. If  federal agencies request further state documentation or clarification, the  60-day clock starts over when the state’s additional documentation is  received, so the actual approval process may take longer. An updated APD  is required annually or more frequently if significant changes are involved.
The current APD process fails to address the fundamental shift that has  occurred in information systems practices over the past 20 years,  according to Jerry Friedman, former executive deputy commissioner at  the Texas Department of Human Services, and John Cuddy, chief  information officer at Oregon’s Department of Human Resources. In their  view, the APD process, designed to mitigate financial risks and avoid  incompatibilities among systems, was appropriate when states typically  worked for 3 to 5 years to develop mainframe systems that were  implemented with a “big bang.” Since then, states have generally shifted  from investments in mainframes to smaller systems that are developed and  implemented incrementally through a series of small, quick projects.  Friedman and Cuddy explained that in the time it takes to obtain federal  funding approval under the APD, states’ plans may be obsolete, given the  current fast pace of technological advances. They also noted that the APD  process was intended for systems in which the design and development  stage was distinct from the implementation and operations stage. They  maintained that these distinctions no longer fit state practices, which are  iterative, with one stage overlapping or running concurrently with another  and lessons learned from one project’s implementation altering the  planning of another. Friedman and Cuddy concluded that the APD process  is not working to the satisfaction of anyone and that it is time to  reengineer the process. William Kowalski echoed their views, commenting  that New Jersey experienced lengthy delays and altered its plans for the  development of a data warehouse because of difficulties obtaining  approval for federal funding under the APD process.
Rick Friedman of the Centers for Medicare and Medicaid (CMS, formerly  the Health Care Financing Administration) agreed that the APD  documentation appears daunting, but noted that similar documentation is  often required for approval within states. To the extent that the federal  requirements are already addressed in the states’ own internal approval  processes, Rick Friedman said that the federal agencies would be willing  to review the documentation previously developed to satisfy the state  procurement offices. If there are additional federal requirements, however,  these would still have to be addressed. In an effort to expedite the APD  approval process, his agency developed a streamlined APD format for use  by states interested in receiving federal financial support for Medicaid- related activities under the Health Insurance Portability and  Accountability Act. The new format re-packaged existing requirements in  a way that simplified the entire process. He added that North Carolina  used this format in making its request and found it to be considerably  easier and more efficient.
Within the APD process, conference participants identified cost allocation  as a component that may delay federal funding approval and impede  service integration. State information systems that support more than one  federal program must have a cost allocation plan approved by the federal  agencies that provide funding. 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, including  TANF (if applicable). Within the plan, different methodologies are used to  justify the costs for specific objectives, such as eligibility determination.  The allocation of costs that must accompany the APD for systems  development is usually based on different methodologies than the  allocation of costs for systems operations. Federal agencies have not  issued guidance on specific methodologies. The cost allocation plans for  systems development must be approved by each federal agency expected  to provide funding, while the plans for systems operations must be  approved by HHS, the lead federal agency.
Cost allocation has received more attention from state human services  officials under welfare reform because TANF is now subject to rules  governing cost allocation that did not apply to AFDC. AFDC was  exempted from Office of Management and Budget cost allocation rules  based on HHS’ interpretation of the legislative history. Under the  exemption, AFDC could be considered the primary program for common  costs, such as entering data on applicants’ income and assets, and could  cover costs that otherwise would have been allocated to various programs  like Medicaid or food stamps. The same is not true under TANF. TANF  funds may be used to pay for shared systems only to the extent that the  TANF program benefits from the systems, so they cannot cover common  costs, but only a proportion of these costs in shared systems. As part of  the transition from AFDC to TANF, HHS requested that states submit new  public assistance cost allocation plans that would take effect July 1999 for  most states.
Some conference participants cited a need for more guidance or flexibility  on acceptable cost allocation methodologies. In his presentation on the  development of Utah’s UWORKS project, Russell Smith said that obtaining  approval for the cost allocation plan took considerably more time and  effort than originally estimated. Utah State officials spent 6 months  negotiating an acceptable cost allocation plan with federal officials for the  project, which used funds from Labor’s One Stop grants, TANF funds, and  food stamp employment and training funds. Bill Cox identified inflexible  cost allocation methodologies as a problem in his presentation on North  Carolina’s Business Process Reengineering Project. He said that while  project costs are commonly allocated based on the size of program  caseloads, the state did not think it was appropriate to use this basis for its  reengineering project. He explained that while the state’s TANF caseload  has decreased in recent years, the size of the caseload does not accurately  represent the amount of time that caseworkers actually spend on TANF  cases. The state proposed using a cost allocation methodology based on  the amount of time caseworkers spent on different programs and projects.  However, while the CMS and the Food and Nutrition Service had no  comments on this change in methods, the Administration for Children and  Families did have reservations and indicated that the preferred method is  caseloads, according to Cox. Cox also maintained that more guidance is  needed with respect to appropriate cost allocation methodologies in  complex projects with multiple phases.
section_title: Obtaining Staff Expertise in Project Management and Information Technology
paragraphs: In their presentation, Software Productivity Consortium president Werner  Schaer and State Information Technology Consortium president Bob  Glasser highlighted project management as a key challenge for systems  modernization. They explained that in their extensive consulting work on  a wide range of state information systems projects, the major problems  they observed have involved issues other than technology. The primary  causes of these problems are a lack of wide-ranging management  experience with information technology, a lack of management experience  with large and complex systems, and insufficient user participation in  project processes. They added that most firms that are dependent on  software development for their core business have learned significant  lessons about how to manage the development and deployment of large,  complex software systems. Yet in their view, the states, as a general rule,  are very early on this learning curve and could benefit from the lessons  that the industry has learned. Information technology contractor  representatives from HSITAG echoed these themes in their presentation.  For example, they explained that HSITAG members have encountered  situations in which states have chosen proven program managers but  failed to provide training to help them become successful managers of  information technology projects. HSITAG presenters emphasized that as  systems projects grow to span multiple programs and increase in  complexity, it is important to use proven methods for promoting regular  communication among project stakeholders, predicting system impacts,  and defining and achieving results. Georgia chief information officer Larry  Singer commented that the project management challenges faced by states  are similar to those described in GAO testimony on the information system  challenges facing the federal government.
Some states have found it difficult to attract and retain staff with the  necessary expertise in information technology because these specialists  command high salaries and technology is changing so rapidly. For  example, due to government salary limits, it is hard to compete for  database analysts who can earn $150 to $200 an hour in the private sector,  according to Russell Smith. Private contractors also may face staffing  problems, lacking the expertise required for specific work they have  agreed to undertake or reassigning experienced staff to other work before  projects are completed.
section_title: Participants Proposed Various Actions To Facilitate Systems Modernization
paragraphs: Conference participants identified numerous strategies to improve state  information systems and facilitate service integration. By identifying broad  roles that each of the following sectors could play—the Congress, federal  agencies, states and localities, and information technology contractors—  they affirmed that diverse groups can contribute to making progress in this  area. In addition, participants developed more detailed proposals of  actions that could be taken to address challenges for systems  modernization and facilitate service integration. The majority of these  proposals pertain to the challenges of enhancing collaboration among  different levels of government and simplifying approval processes for  obtaining federal funding.
subsections: section_title: Different Sectors Can Play Roles in Systems Modernization
paragraphs: Table 3 summarizes conference participants’ suggestions about the roles  that different sectors could play in facilitating systems modernization and  some of the challenges associated with fulfilling these roles. For example,  in addition to authorizing funding for systems demonstration projects, the  Congress could play a broad supportive role in helping remove barriers  and promoting systems modernization as it obtains additional knowledge  of information systems trends and needs. A key challenge in fulfilling these  roles is how organizations should target their efforts to better inform the  Congress of needs and trends in this area. Beyond their roles as regulators,  federal agencies could help states work together to develop information  systems and share their models with other states. State and local  governments, which are on the front lines of system design and operation,  could facilitate progress by developing model information systems and  testing innovative system linkages. Information technology contractors  could use their unique perspectives and expertise to play a range of  educational roles, such as helping states and localities improve their  management of information systems projects.
section_title: Conference Participants Offered Varied Proposals
paragraphs: Conference participants, working in small discussion groups, proposed  numerous actions to address systems modernization and facilitate  improvements in state information systems for human services. These  proposals are summarized in table 4. The proposals vary in their scope and  specificity, and also whether or not they would require legislative or  regulatory changes to be implemented. Some of the proposals are  described more fully in papers presented at the conference. However, the  list of proposals does not represent a consensus of participants.  Participants brought diverse perspectives to the issues examined at the  conference and did not have time to discuss each proposal in detail or  systematically assess the merits or relative priorities of the various  proposals. Nonetheless, this list of proposals represents a rich source of  potentially useful ideas for improving the development of information  systems for human services and thus merits further analysis and  discussion.
Many of the proposals pertain to enhancing strategic collaboration among  different levels of government and these proposals present various  approaches to this objective. For example, several proposals focus on  informing federal or state political leaders about, and involving them in,  issues related to systems modernization, such as by holding a  congressional hearing on integrated information technology for human  services. Other proposals would create a forum for intergovernmental  collaboration by creating an institute for the management of human  services information systems or establishing federally funded systems  demonstration projects to integrate state and local services. Other  proposals are intended to minimize the occurrence of perceived adverse  effects on state information systems resulting from federal legislation.
The proposals related to improving the federal funding process also  encompass a wide range of approaches, ranging from making incremental  changes to the APD process to creating a federal block grant for human  service information systems. Several proposals call for replacing the APD  process—in one case with a process in which states’ information systems  plans would be reviewed as a component of their overall program plans  and in another with a process based on states’ certified capacity to manage  information systems. Another proposal suggests a negotiating procedure  that could be used to develop an acceptable replacement for the APD  process.
There is an effort underway to implement changes to address one of the  broad challenges identified by conference participants: simplifying the  approval process for obtaining federal funding. Partly in response to a recommendation in GAO’s April 2000 report on information systems, a federal interagency group has been established and is focusing its attention on the APD process. Rick Friedman of the CMS, who chairs the group, gave conference participants a status report on the work of the group. He said that the interagency group includes representatives from five HHS offices and the U.S. Department of Agriculture’s’ Food and Nutrition Service. The group has met several times to examine the APD process, has consulted with state officials, and has formulated some recommended changes, but the proposed changes have not been approved by the respective federal agencies.
We are sending copies of this report to appropriate congressional committees; the Secretary of Health and Human Services; the Secretary of Agriculture; the Secretary of Labor; and other interested parties. We will also make copies available to others on request. If you or your staff have any questions concerning this report, please call me at (202) 512- 7215. Other GAO contacts and staff acknowledgments for this report are listed in appendix III.
section_title: Appendix I: Conference Agenda
paragraphs: Realizing The Promise Of Technology: A Conference On  Modernizing Information Systems For Human Services  Sponsored by: U.S. General Accounting Office The Nelson A. Rockefeller Institute of Government Welfare Information Network (The Finance Project)
June 28 and 29, 2001 in Reston, Virginia With its heightened emphasis on employment and time-limited assistance,  welfare reform significantly expanded the information needed to support  activities ranging from integrated service delivery by front-line  caseworkers to program performance monitoring by administrators and  oversight agencies. To meet such needs, automated systems must be able  to share data across the numerous programs that serve low-income  families, such as Temporary Assistance for Needy Families, Medicaid,  child care, job training, vocational rehabilitation, and child welfare. For  three years, members of the GAO / Rockefeller Institute Working Seminar  on Social Program Information Systems have met regularly to study  system capabilities, obstacles to modernization, and strategies to facilitate  progress. In April 2000, GAO issued a report that identified major gaps in  the capabilities of state automated systems to meet information needs for  welfare reform.
This conference will build on prior work by providing diverse perspectives  on key issues and options. To help develop a literature in this area, the  presenters at this conference will write papers that we plan to publish,  along with an overview of conference proceedings. Attendance will be by  invitation only, and conference participants will include congressional  staff, federal and state program and information technology managers,  welfare researchers, information technology vendors, and others. A key  objective will be to tap this collective expertise by having participants take  part in breakout sessions each day. Participants will consider proposals  for actions that could be taken in four key sectors to facilitate systems  modernization: the Congress, federal agencies, states and localities, and  information technology vendors. We will then determine the level of  consensus for these proposals. By documenting current knowledge and  highlighting collaboratively developed proposals—an action agenda—the  report issued from this conference should provide the Congress,  Administration, and states and localities with timely suggestions pertinent  to the reauthorization of welfare.
WELCOME AND CONFERENCE OVERVIEW  Cynthia Fagnoni, General Accounting Office (GAO), and  Richard Nathan, Rockefeller  Institute of Government  THE NEED FOR SYSTEMS MODERNIZATION  Chair: Barbara Blum, Research Forum on Children,  Families, and the New Federalism  The Capabilities of State Automated Systems to Meet  Information Needs in the Changing Landscape of Human  Services  Andrew Sherrill, GAO  http://www.gao.gov/special.pubs/GAO-02-121/ap1.pdf  Briefing charts: http://www.gao.gov/special.pubs/GAO-02­ 121/ap2.pdf  The Need to Align Federal, State, and Local Technology  Investments: A Local Perspective  Sandra Vargas, County Administrator, Hennepin County,  Minnesota, and Cost is Toregas, Public Technology  Incorporated  http://www.gao.gov/special.pubs/GAO-02-121/ap3.pdf  Reactor: Thomas Gais, Rockefeller Institute of Government  POSSIBLE APPROACHES FOR THE FUTURE  Chair: Judith Moore, National Health Policy Forum  Re-engineering the Approach by Which the Federal  Government Approves and Monitors the Creation of State  Human Services Information Systems  Jerry Friedman, Texas Department of Human Services, and  John Cuddy, Oregon Department of Human Resources  http://www.gao.gov/special.pubs/GAO-02-121/ap4.pdf  Briefing charts: http://www.gao.gov/special.pubs/GAO-02­ 121/ap5.pdf  Federalism and the Challenges of Improving Information  Systems For Human Services  Richard Nathan and Mark Ragan, Rockefeller Institute of  Government  http://www.gao.gov/special.pubs/GAO-02-121/ap6.pdf  Briefing charts: http://www.gao.gov/special.pubs/GAO-02­ 121/ap7.pdf  Innovations in Technology and Project Management  Practices That Can Improve Human Services  Representatives from the Human Services Information  Technology Advisory Group  http://www.gao.gov/special.pubs/GAO-02-121/ap8.pdf  Briefing charts: http://www.gao.gov/special.pubs/GAO-02­ 121/ap9.pdf  Lessons Learned Helping Organizations Make Smart  Information Technology Decisions  Werner Schaer, Software Productivity Consortium, and  Robert Glasser, State Information Technology Consortium  http://www.gao.gov/special.pubs/GAO-02-121/ap10.pdf  Briefing charts: http://www.gao.gov/special.pubs/GAO-02­ 121/ap11.pdf  Reactors: Joseph Leo, Science Applications International  Corporation, and Bruce Eanet, Employment and Training  Administration, U.S. Department of Labor  The Oregon Experience and Looking to the Future  Gary Weeks, Director of Human Services Reform, Annie E.  Casey Foundation (former director of the Oregon  Department of Human Resources)  http://www.rockinst.org/publications/pubs_and_reports.ht  ml  BREAKOUT SESSIONS  Participants are divided into the following groups to discuss the historical involvement, role, and special challenges of that sector in facilitating systems modernization.
Group 1: The Congress Moderator/Reporter: Elaine Ryan, American Public Human Services Association, and Gregory Benson, Rockefeller Institute of Government Group 2: Federal Agencies Moderator/Reporter: Rick Friedman, Centers for Medicare and Medicaid Services, and Richard Roper, The Roper Group, New Jersey Group 3: States and Localities Moderator/Reporter: Lorrie Tritch, Iowa Department of Human Services, and Michael Rich, Emory University Group 4: Information Technology Vendors  Moderator/Reporter: Vicki Grant, Supporting Families After  Welfare, and Robert Stauffer, Deloitte & Touche Consulting  Group  PLENARY SESSION: REPORTS FROM BREAKOUT  GROUPS AND DISCUSSION OF THEIR IDEAS  Discussion Leader: Barry Van Lare, Welfare Information  Network  DINNER  STATE AND LOCAL EXPERIENCES  Chair: Sigurd Nilsen, GAO  Wisconsin’s System Initiatives for Eligibility and Work- Based Programs Paul Saeman, Wisconsin Department of Workforce Development http://www.gao.gov/special.pubs/GAO-02­ 121/ap12.pdf Briefing charts: http://www.gao.gov/special.pubs/GAO-02­ 121/ap13.pdf http://www.gao.gov/special.pubs/GAO-02-121/ap14.pdf http://www.gao.gov/special.pubs/GAO-02-121/ap15.pdf One Ease E-Link: New Jersey’s Pursuit to Establish an Electronic, Multi-Tooled Network for the Delivery of Coordinated Social, Health And Employment Services William Kowalski, New Jersey Department of Human  Services  http://www.gao.gov/special.pubs/GAO-02-121/ap16.pdf  Briefing charts: http://www.gao.gov/special.pubs/GAO-02­ 121/ap17.pdf  Utah’s Development of a One-Stop Operating System  Russell Smith, Utah Department of Workforce Services  http://www.gao.gov/special.pubs/GAO-02-121/ap18.pdf  Briefing charts: http://www.gao.gov/special.pubs/GAO-02­ 121/ap19.pdf  Reengineering Business Processes to Integrate the  Delivery of Human Services in North Carolina  Bill Cox, North Carolina Department of Health and Human  Services  http://www.gao.gov/special.pubs/GAO-02-121/ap20.pdf  Briefing charts: http://www.gao.gov/special.pubs/GAO-02­ 121/ap21.pdf  Reactor: Rachel Block, Centers for Medicare and Medicaid  Services  Participants are divided into the same four groups in which they participated the previous day. Building on their previous discussions, they develop proposals for actions that could be taken to facilitate systems modernization. However, participants are not limited to any particular sector (e.g., federal agencies) in developing their proposals.
section_title: Appendix II: Conference Participants
subsections: section_title: Staff Acknowledgments
paragraphs: Elizabeth Caplick also helped arrange the conference that resulted in this  report.