Lawmakers: Welfare subcontractor ACS under scrutiny

Influential lawmakers said Tuesday that Indiana welfare subcontractor Affiliated Computer Services Inc. will come under
closer scrutiny now that Gov. Mitch Daniels has fired IBM Corp. from the project.

Rep. Peggy Welch, a Bloomington
Democrat who sits on both the State Budget Committee and the General Assembly’s Medicaid Oversight Commission, said some lawmakers
wonder whether Dallas-based ACS was responsible for some of the poor service, lost documents and other problems that resulted
in Daniels firing IBM Thursday from a 10-year, $1.34 billion contract to automate intake for food stamps, Medicaid and other
welfare benefits.

"We’re going to be watching closely on ACS, because there is a perception that they are
just as bad an actor as IBM," Welch said after a meeting of the Legislature’s Medicaid Oversight Commission.

Rep. Suzanne Crouch, R-Evansville, said lawmakers remain skeptical of ACS because it was brought in by Mitch Roob, a former
ACS executive who oversaw the IBM/ACS project as Family and Social Services Administration secretary until January, when he
became Indiana’s secretary of commerce.

"People are uncomfortable that ACS is still in place and that they
were brought on board by former Secretary Roob," said Crouch, one of several Evansville lawmakers who’ve led legislative
criticism of the welfare changes.

Roob’s office did not immediately respond to a message seeking comment.

The lawmakers’ comments provided the first indication since IBM’s firing that political pressure also was building against
ACS, one of IBM’s largest partners in the welfare outsourcing that moved 1,500 case workers from the state’s payroll to ACS’
employment 2-1/2 years ago. ACS workers compile eligibility data on welfare applicants before state employees decide which
benefits to award.

ACS spokesman Ken Ericson said when IBM was fired last week that his company was looking forward
to working more closely with FSSA and that it "remains fully committed to the success of this project."

When asked about lawmakers’ comments Tuesday, he referred to those earlier remarks.

Welch and Sen. Luke Kenley,
R-Noblesville, briefed other members of the Medicaid Commission on steps FSSA is taking to implement a "hybrid plan"
that will incorporate the call centers, document imaging and Internet access that IBM brought to the welfare program along
with the face-to-face contact FSSA offered.

FSSA Secretary Anne Murphy is set to discuss the transition from the
IBM contract, which expires Dec. 14, to the hybrid plan Friday in Bloomington before the State Budget Committee chaired by
Kenley. She told the panel last month that the IBM project needed more face-to-face interaction between caseworkers and welfare
recipients.

Murphy met with Kenley, Welch and some other Budget Committee members last week after Daniels canceled
the IBM contract.

Kenley, in response to a question from Medicaid Commission member Rep. Charlie Brown, D-Gary,
said FSSA has no immediate plans to roll out the automation and other welfare changes to any new counties. The changes are
in place so far in 59 counties with about a third of the state’s welfare caseload of 1.2 million people, but not in some large
cities such as Indianapolis, Gary, South Bend and Elkhart.

FSSA spokesman Marcus Barlow said the comments by Welch
and Crouch about ACS were "unfortunate" because Daniels said the problems were with IBM’s system and not specific
companies.