Conditions placed on Indiana’s welfare rollout

A federal food stamp administrator has told Indiana’s human services chief that his staff must be consulted before the state rolls out its troubled welfare automation program to additional regions.

Regional Administrator Ollice Holden of the U.S. Food and Nutrition Service also said in the letter that his staff has ongoing concerns about the food stamp program, now known formally as the Supplemental Nutrition Assistance Program.

The Associated Press obtained a copy of the letter, date-stamped Friday and addressed to Secretary Anne Murphy of the Family and Social Services Administration.

"FNS wishes to stress that we remain concerned about the accuracy, timeliness and customer service of SNAP in Indiana," Holden wrote.

Murphy paused the rollout at 59 counties earlier this year shortly after taking the top job at FSSA because of problems with the work done by Armonk, N.Y.-based IBM Corp, Affiliated Computer Services Inc. of Dallas and their partners. Not part of the rollout so far are 33 counties in northern and central Indiana with nearly two-thirds of the state’s welfare caseload. Those 33 counties include Marion, Lake, Porter, St. Joseph, Elkhart and Tippecanoe.

Murphy, in testimony before the State Budget Committee on Friday, acknowledged the state’s new welfare system does not have enough face-to-face interaction with people who need services. Advocates for welfare recipients and lawmakers have harshly criticized the lack of face-to-face contact that largely began when Indiana privatized about 1,500 state caseworkers to the IBM-led team in March 2007.

Critics also have complained about lost documents, lengthy approvals for benefits and other problems with the new system.

The purpose of Holden’s letter was to inform FSSA that FNS would pay half of the administrative costs of the food stamp program for the federal fiscal year that begins Thursday, as is normal. The FNS share of those costs for the next 12 months is $41.5 million.

However, Holden stipulated that FSSA must confer with the federal agency before it further rolls out the call centers, document imaging and other automation used in welfare intake under FSSA’s 10-year, $1.34 billion outsourcing contract with IBM, ACS and their partners.

"We always do that," FSSA spokesman Marcus Barlow said. "We consult with FNS on every step of the project."

Murphy has said the rollout will not continue until FSSA determines whether the IBM-led team has made improvements that she requested earlier this year. She has said her agency will judge the effectiveness of promised changes sometime in October.

In a document she sent to Holden earlier this month, FSSA told FNS that it "strongly agrees that consistent performance over several consecutive months must be included" in the criteria used to determine when the rollout will continue.

Barlow said he would not speculate on when that might be.

A management review of the new system by FNS auditors in July resulted in eight corrective actions required by the federal agency that supported the critics’ complaints. FNS said food stamp applications must be processed by the state more quickly and accurately, among other required changes.

Barlow said the FNS findings coincide with what FSSA required of the IBM team in the corrective action plan the state ordered earlier this year.

"We were looking at this long before FNS sent us this letter," Barlow said.