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United States General Accounting Office: 
GAO: 

Report to Congressional Committees: 

January 2002: 

Human Services Integration: 

Results of a GAO Cosponsored Conference on Modernizing Information 
Systems: 

GAO-02-121: 

Contents: 

Letter: 

Summary of Proceedings: 

Background: 

Systems Modernization Needed To Better Meet Information Needs
For Human Services: 

Systems Modernization Efforts Are Underway in Several States: 

Challenges for Systems Modernization Pertain to Intergovernmental 
Collaboration, Federal Funding Processes, and Project Management: 

Participants Proposed Various Actions To Facilitate Systems 
Modernization: 

Appendix I: Conference Agenda: 

Appendix II: Conference Participants: 

Appendix III: GAO Contacts and Staff Acknowledgments: 

GAO Contacts: 

Staff Acknowledgments: 

Tables: 

Table 1: Issues Faced and Responses Taken by States in Developing and 
Implementing Their Information Systems Projects: 

Table 2: Federal Funding for Human Services Information Systems by 
Program, 2002: 

Table 3: Potential Roles of Key Sectors in Facilitating Systems 
Modernization: 

Table 4: Actions Proposed by Conference Participants to Facilitate 
Systems Modernization: 

Abbreviations: 

AFDC: Aid to Families With Dependent Children: 

APD: advanced planning document: 

CARES: Client Assistance for Re-employment and Economic Support System: 

GAO: General Accounting Office: 

DHS: Department of Health and Human Services: 

HSITAG: Human Services Information Technology Advisory Group: 

PKI: Public Key Infrastructure: 

PRWORA: Personal Responsibility and Work Opportunity: 

Reconciliation Act: 

TANF: Temporary Assistance for Needy Families: 

WISDOM: Wisconsin Data for Operational Management: 

[End of section] 

United States General Accounting Office: 
Washington, DC 20548: 

January 31, 2002: 

Congressional Committees: 

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. 

Summary of Proceedings: 

Conference presenters maintained that systems modernization is needed 
because there are major gaps in the capabilities of states' 
information systems to meet information needs for administering and 
overseeing welfare reform. With its shift in emphasis from income 
maintenance to self-sufficiency, welfare reform has a need for greater 
data sharing and systems capability to support new partnerships among 
diverse service providers and variations among local operations. 
However, the majority of the local TANF administrators surveyed by GAO 
in 15 states 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, in part, because some of 
the systems used by agencies that serve TANF recipients do not share 
data on these recipients, which constrains the ability of case 
managers to arrange and monitor the delivery of services. 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 advantage of recent 
innovations in technology. These innovations, such as Internet-based 
technologies, offer significant opportunities for improving the 
delivery of human services. 

Presentations on the systems initiatives in five states—New Jersey, 
North Carolina, Oregon, Utah, and Wisconsin—highlighted the approaches 
these states are taking to modernize their information systems and 
benefit from recent technological advances. While these initiatives 
are at various stages and have a multitude of stated objectives, all 
have expanded their data-sharing capabilities in order to enhance 
program management and service integration—that is, the coordination 
of services for families and individuals that are delivered by 
different programs and agencies in a manner that appears seamless. To 
enhance service integration, the state initiatives are making data 
from different programs available to case managers and, in some cases, 
to program applicants using a single computer screen. For example, New 
Jersey's One Ease-E Link initiative provides hardware and software to 
counties so they can create county-level networks comprised of a 
multitude of public and private service providers, including nonprofit 
agencies. The Internet-based system enables these providers to share 
recipient information using case management software and assess 
applicants' program eligibility by using an eligibility-screening 
tool. Three of the five states have also created large databases, 
called "data warehouses," that combine data from various program 
sources and support program management by generating customized 
management reports on topics such as recipients' use of government 
services over time. 

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. With regard to 
intergovernmental collaboration, one of the presenters highlighted the 
need to find ways to facilitate investments by local, state, and 
federal governments together in information systems to achieve a 
citizen-centered service delivery model. Other participants focused on 
the federal government and highlighted what they viewed as an 
overemphasis on regulation and an insufficient effort to help states 
and localities invest wisely in technology and learn from best 
practices. With regard to funding, several participants maintained 
that the overall process for obtaining approval for federal funding—
the advanced planning document process—can be slow, burdensome, and 
inconsistent with the way modern systems are designed and implemented. 
The participants also commented that the cost allocation component of 
this process, which requires costs to be properly allocated to the 
various programs that benefit from a project, sometimes delays project 
implementation and that more guidance is needed on acceptable cost 
allocation methodologies. Finally, several participants cited 
difficulties that some states have experienced in obtaining sufficient 
staff expertise in management of information technology projects and 
emphasized the importance of using proven methods of project 
management in this specialized field to increase the chances of 
project success. 

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. For example, participants 
suggested that in addition to authorizing funding for systems 
demonstration projects, the Congress could play a broad supportive 
role in helping to remove barriers and facilitate systems 
modernization as it obtains further knowledge of technology trends and 
the specific needs of human services systems. In addition, 
participants developed more than 20 proposals for actions to 
facilitate systems modernization. The majority of these proposals are 
intended to enhance collaboration among different levels of government 
and simplify the approval processes for obtaining federal funding. 
However, the list of proposals does not represent a consensus of 
participants. Participants brought diverse perspectives to the issues 
discussed at the conference and did not have time to systematically 
assess the merits or relative priorities of the various proposals. 
Nonetheless, the proposals represent a rich source of potentially 
useful ideas for improving the development of information systems for 
human services and thus merit further analysis and discussion. 

Background: 

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. 

Systems Modernization Needed To Better Meet Information Needs For 
Human Services: 

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.
	
Shifts in Welfare Program Objectives and Operations Place New Demands 
on Information Systems: 

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. 
[Footnote 1] 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. 

Current Information Systems Do Not Fully Support Information Needs for 
Welfare Reform: 

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.2 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 Gals, 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.[Footnote 3] 

Age of Many States' Systems Compounds Difficulty of Meeting New 
Information Demands: 

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.[Footnote 4] 
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.[Footnote 5] 

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.[Footnote 6] 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. 

Systems Modernization Efforts Are Underway in Several States: 

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. 

States' Initiatives Seek to Enhance Service Integration and Program 
Management Through Expanded Data Sharing: 

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.[Footnote 
7] 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.[Footnote 8] 

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.[Footnote 9] 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.[Footnote 10] 

* 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.[Footnote 11] 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. 
[Footnote 12] 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 
WORKS One-Stop Operating System.[Footnote 13] 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 online 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.[Footnote 14] 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. 

States Confronted a Broad Range of Issues in Developing and 
Implementing Their Initiatives: 

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. 

Table 1: Issues Faced and Responses Taken by States in Developing and 
Implementing Their Information Systems Projects: 

Issue: Obtaining support for the project from state's leadership; 
Examples of state agency responses (States indicated in parentheses): 
Present project plans to governor and cabinet in computer slide show 
(NJ) or to state executive steering committee (NC) for approval. 

Issue: Obtaining support for the project from agency staff who will 
use the system; 
Examples of state agency responses (States indicated in parentheses): 
Include state and local representatives in collaborative planning 
process (NJ, NC, OR). Focus first on fixing problems that case 
managers identify as the most annoying or time consuming (WI). 

Issue: Providing adequate training to staff who will use the system; 
Examples of state agency responses (States indicated in parentheses): 
Provide documentation on system so staff can continue to learn on 
their own after they have received training (WI). Develop skills of 
selected agency users who will assist their peers and facilitate 
cultural change in agency (NJ, OR). 

Issue: Obtaining adequate funding for development and operations of 
state and local information systems; 
Examples of state agency responses (States indicated in parentheses): 
Provide state start-up funds; then collect user fees from local 
provider agencies (NJ). Launch pilot projects in localities to 
demonstrate value of the systems (NJ, OR). 

Issue: Maximizing the system's compatibility with other systems and 
capability to support future upgrades; 
Examples of state agency responses (States indicated in parentheses): 
Follow industry or state standards governing the design and deployment 
of technology investments (NJ, NC, and UT). Employ Internet technology 
with a Web browser as the user interface rather than client server 
technology with Windows or Macintosh as the user interface (UT). 

Issue: Minimizing the risk that conversion to the new system will 
result in the loss of functions or data; 
Examples of state agency responses (States indicated in parentheses): 
Maintain existing system, resulting in dual systems, during conversion 
(NJ). Pilot the project on a test basis and make adjustments as needed 
(NJ, OR). 

Issue: Overseeing contractors' performance to maximize cost 
effectiveness of systems development; 
Examples of state agency responses (States indicated in parentheses): 
Test applications yourself rather than relying on contractor's 
demonstrations (UT). Specify expectations for funding, ownership, 
maintenance, and modifications in the contract (UT). 

Issue: Ensuring adequate state management of the project that can 
survive personnel changes; 
Examples of state agency responses (States indicated in parentheses): 
Hire the best available project managers and hold them accountable for 
performance (UT). Provide clear authority, vision, and sufficient 
resources to the project team (OR). 

Issue: Minimizing adverse effects of competition among state agencies 
for information systems resources; 
Examples of state agency responses (States indicated in parentheses): 
Emphasize need to serve the same families to stimulate collaboration 
rather than competition (NJ). Place authority to prioritize demands 
about resources with a neutral third party (WI). 

Source: Papers presented at conference by state officials as shown in 
appendix I. 

[End of table] 

Challenges for Systems Modernization Pertain to Intergovernmental 
Collaboration, Federal Funding Processes, and Project Management: 

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. 

Enhancing Strategic Collaboration Among Federal, State, and Local 
Governments: 

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.[Footnote 15] 
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. 
[Footnote 16] 

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). 

Simplifying Cumbersome Approval Process for Obtaining Federal Funding: 

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.[Footnote 17] 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. 

Table 2: Federal Funding for Human Services Information Systems by 
Program, 2002: 

Program: TANF; 
Federal agency: Administration for Children and Families, HHS; 
Nature of funding: Block grants; 
Federal/state funding percentage for information systems: No state 
match required[A]; 
Rules for funding systems: No APD. 

Program: Medicaid: eligibility; 
Federal agency: Centers for Medicare and Medicaid Services, HHS; 
Nature of funding: Entitlement; 
Federal/state funding percentage for information systems: 50/50 – 
system development; 50/50 – system operations; 
Rules for funding systems: ADP. 

Program: Medicaid: claims processing; 
Federal agency: Centers for Medicare and Medicaid Services, HHS; 
Nature of funding: Entitlement; 
Federal/state funding percentage for information systems: 90/10 - 
system development; 75/25 – system operations; 
Rules for funding systems: ADP. 

Program: Child care; 
Federal agency: Administration for Children and Families, HHS; 
Nature of funding: Block grants; 
Federal/state funding percentage for information systems: No state 
match required; 
Rules for funding systems: No APD. 

Program: Child support enforcement; 
Federal agency: Administration for Children and Families, HHS; 
Nature of funding: Entitlement; 
Federal/state funding percentage for information systems: 66/34 - 
system development; 66/34 – system operations; 
Rules for funding systems: APD. 

Program: Food stamps; 
Federal agency: Food and Nutrition Service, Agriculture; 
Nature of funding: Entitlement; 
Federal/state funding percentage for information systems: 50/50 – 
system development; 50/50 – system operations; 
Rules for funding systems: APD. 

Program: Child welfare; 
Federal agency: Administration for Children and Families, HHS; 
Nature of funding: Entitlement; 
Federal/state funding percentage for information systems: 50/50 – 
system development; 50/50 – system operations; 
Rules for funding systems: APD. 

Program: Employment and training; 
Federal agency: Employment and Training Administration, Labor; 
Nature of funding: Formula grants; 
Federal/state funding percentage for information systems: No state 
match required; 
Rules for funding systems: No APD. 

[A] Where no state match is required, there may be limits on the 
amount of federal funds that can be spent for administration. However, 
information systems under TANF are not subject to the 15-percent limit 
on administrative expenditures. 

Source: Richard Nathan and Mark Ragan, Nelson A. Rockefeller Institute 
of Government, "Federalism and the Challenges of Improving Information 
Systems for Human Services." 

[End of table] 

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. 
[Footnote 18] 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. 
[Footnote 19] 

Within the APD process, conference participants identified cost 
allocation as a component that may delay federal funding approval and 
impede service integration.[Footnote 20] 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 BIB, the lead federal agency.[Footnote 21] 

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.[Footnote 22] 
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.[Footnote 23] 

Obtaining Staff Expertise in Project Management and Information 
Technology: 

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.[Footnote 24] 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.[Footnote 25] 

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.[Footnote 26] 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. 

Participants Proposed Various Actions To Facilitate Systems 
Modernization: 

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. 

Different Sectors Can Play Roles in Systems Modernization: 

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. 

Table 3: Potential Roles of Key Sectors in Facilitating Systems 
Modernization: 

Sector: Congress; 
Potential roles in facilitating systems modernization: Providing 
greater overall support by obtaining additional knowledge of 
information systems trends and needs, and the implications of federal 
legislation with respect to the need to modify information systems. 	
Authorizing greater flexibility in the allocation of costs for 
information system projects. Authorizing funds for information system 
demonstration projects. 
Challenges in fulfilling these roles: How to stimulate and maintain 
congressional interest in this technical area that will bridge 
turnover in congressional leadership and staff.
How external organizations should target their efforts to better 
inform the Congress.
			
Sector: Federal agencies; 
Potential roles in facilitating systems modernization: Facilitating 
states working together in developing effective information systems 
and sharing their models with other states. Allowing states greater 
flexibility in developing information systems. Developing 
certification processes for state information systems. 
Challenges in fulfilling these roles: How to provide or contract for 
technical assistance to states, given limited federal resources in 
this area. 

Sector: State and local governments; 
Potential roles in facilitating systems modernization: Developing 
model, client-centered information systems. Testing innovative service 
delivery and information system links through demonstration projects.	
Challenges in fulfilling these roles: How to disseminate information 
about these model systems to other states and localities. How to also 
meet other objectives, such as federal reporting requirements, while 
focusing on meeting client needs. How to maintain a base of expertise 
in information technology that can sustain projects through turnovers 
of agency staff and leadership. 

Sector: Information technology contractors; 
Potential roles in facilitating systems modernization: Educating human 
service organizations about how information technology can help solve 
their problems. Contributing to improving state and local management 
of information systems projects. Serving as independent advisors to 
states and helping provide an overall vision for meeting their 
information systems needs. Serving as a third-party messenger to help 
obtain the support of state legislators or executive leadership for 
information systems projects. 
Challenges in fulfilling these roles: How to overcome concerns about 
using public funds for information systems rather than program 
purposes. How information technology contractors, which are a 
community of competitors, can work together for the common good. How 
to overcome cultural differences between the private and public 
sectors so they can work together more effectively. How to avoid 
unrealistic expectations by clients about the development and 
capabilities of information systems. 

Source: Small-group discussions of conference participants. 

[End of table] 

Conference Participants Offered Varied Proposals: 

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. 

Table 4: Actions Proposed by Conference Participants to Facilitate 
Systems Modernization: 

Enhancing strategic collaboration among federal, state, and local 
governments: 

* In light of upcoming reauthorizations for several programs, hold a 
congressional hearing on integrated information technology for human 
services. 
* Focus attention of the Congressional Internet Caucus Advisory 
Committee on information technology needs in human services. 

* Inform federal and state political leaders about the positive 
impacts of information technology for the health and human services. 

* Create an institute for the management of human services information 
systems. 

* Establish federally funded demonstration projects for information 
systems that seek to integrate state and local human services. 

* Shift the federal role in information systems management from that 
of a regulator to a facilitator. 

* Harmonize outcome measures across federal agencies toward common 
goals. 

* Develop measures of success for systems development that are related 
to serving customers and could be used for various systems. 

* Stagger federal deadlines for the implementation of required state 
information systems so not all states and their contractors face the 
same deadline. 

* Require that federal laws and regulations include a statement 
assessing their impact on costs for state information systems in line 
with Title II of the Unfunded Mandates Reform Act of 1995.[A] 

Simplifying the cumbersome approval process for obtaining federal 
funding: 

* In the short term, provide relief from APD requirements within 
current laws and regulations. 

* Replace the APD process with a process wherein states' plans for 
information systems become components of their broader program plans. 

* Replace the APD process with a process that relies on certification 
of state capacity to manage information systems,[B] whereby states 
that are certified receive less federal oversight and more 
flexibility.[C] 

* Use a principled negotiation process to create a replacement for the 
APD process.[D] 

* Create a federal block grant for human services information systems.
* Develop a new approach to cost allocation. 

Obtaining staff expertise in project management and information 
technology: 

* Develop a set of best practices for the procurement of information 
technology contractors. 

* Allow states to use state procurement rules in states that are 
certified. 

* Develop a project management curriculum and certification process 
for health and human services professionals. 

Miscellaneous: 

* Promote investment in Internet infrastructure. 

* Develop and disseminate a repository of best practices of the use of 
technology in the health and human services. 

* Design information systems with a focus on service delivery and let 
data and outcomes be a necessary byproduct. 

* Eliminate the prohibition on the use of federal funds for 
proprietary applications software developed for human services 
programs.[E] 

[A] For more information on this law, see U.S. General Accounting 
Office, Unfunded Mandates: Reform Act Has Had Little Effect on 
Agencies' Rulemaking Actions GAO/GGD-98-30, (Washington, D.C.: 1998). 

[B] Carnegie Mellon University's Software Engineering Institute has 
developed several capability maturity models for assessing an agency's 
information technology strengths and weaknesses and developing plans 
for improvement. For more information on such models and an example of 
their application, see U.S. General Accounting Office, Air Traffic 
Control: Immature Software Acquisition Processes Increase FAA System 
Acquisition Risks, GAO/AIMD-97-47, (Washington, D.C.: 1997). 

[C] This proposal is elaborated in the conference paper by Jerry 
Friedman and John Cuddy. See web address in appendix I. 

[D] As outlined in the conference paper by Friedman and Cuddy, 
principled negotiation is a process in which the relevant parties 
identify their underlying interests and work together to generate 
options that satisfy their interests. 

[E] See 45 CFR Sec. 95.617 (a), (b), and (c) requiring that state or 
local governments have ownership rights to software, modifications, 
and associated documentation developed with federal funds. However, 
proprietary operating/vendor software packages that are provided at 
established catalog or market prices and sold or leased to the general 
public are not subject to these public ownership requirements. Federal 
funds are not available for proprietary applications software 
developed specifically for the public assistance programs covered 
under this subpart. A federal official at the conference explained 
that the prohibition is designed to prevent duplicate federal funding 
for software development. 

Source: Small-group discussions of conference participants. Proposals 
may not represent the views of all or most participants in these 
groups. 

[End of table] 

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.[Footnote 27] 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. 

Signed by: 

Sigurd Nilsen: 
Director, Education, Workforce and Income Security Issues: 

[End of section] 

List of Recipients: 

The Honorable Tom Harkin, Chairman: 
The Honorable Richard G. Lugar, Ranking Minority Member: 
Committee on Agriculture, Nutrition, and Forestry: 
United States Senate: 

The Honorable Max Baucus, Chairman: 
The Honorable Chuck Grassley, Ranking Minority Member: 
Committee on Finance: 
United States Senate: 

The Honorable Joseph I. Lieberman, Chairman: 
The Honorable Fred Thompson, Ranking Minority Member: 
Committee on Governmental Affairs: 
United States Senate: 

The Honorable Edward M. Kennedy, Chairman: 
The Honorable Judd Gregg, Ranking Minority Member: 
Committee on Health, Education, Labor, and Pensions: 
United States Senate: 

The Honorable Larry Combest, Chairman: 
The Honorable Charles Stenholm, Ranking Member: 
Committee on Agriculture: 
House of Representatives: 

The Honorable John A. Boehner, Chairman: 
The Honorable George Miller, Ranking Member: 
Committee on Education and the Workforce: 
House of Representatives: 

The Honorable W. J. "Billy" Tauzin, Chairman: 
The Honorable John D. Dingell, Ranking Member: 
Committee on Energy and Commerce: 
House of Representatives: 

The Honorable Dan Burton, Chairman: 
The Honorable Henry A. Waxman, Ranking Member: 
Committee on Government Reform: 
House of Representatives: 

The Honorable Bill Thomas, Chairman: 
The Honorable Charles B. Rangel, Ranking Member: 
Committee on Ways and Means: 
House of Representatives: 

The Honorable Patrick Leahy, Co-Chair: 
The Honorable Conrad Burns, Co-Chair: 
The Honorable Robert Goodlatte, Co-Chair: 
The Honorable Rick Boucher, Co-Chair: 
U.S. Congressional Internet Caucus: 

[End of section] 

Appendix I: Conference Agenda: 

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: 
National Health Policy Forum: 
Welfare Information Network (The Finance Project): 

June 28 and 29, 2001 in Reston, Virginia: 

Conference Objectives: 

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. 

Agenda: 

June 28: 

8:00-9:00: Continental Breakfast: 

9:00-9:10: Welcome And Conference Overview: 
Cynthia Fagnoni, General Accounting Office (GAO), and Richard Nathan, 
Rockefeller Institute of Government. 

9:10-10:00: 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 
[hyperlink, http://www.gao.gov/special.pubs/GA0-02-121/ap1.pdf] 
Briefing charts: [hyperlink, 
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 [hyperlink, 
http://www.gao.gov/special.pubs/GA0-02-121/ap3.pdf] 

Reactor: Thomas Gals, Rockefeller Institute of Government. 

10:00-10:10: Break. 

10:10-12:00: 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 [hyperlink, 
http://www.gao.gov/special.pubs/GA0-02-121/ap4.pdf] 
Briefing charts: [hyperlink, 
http://www.gao.gov/special.pubs/GAO-02121/ap5.pdf] 

Federalism and the Challenges of Improving Information Systems For 
Human Services: 
Richard Nathan and Mark Ragan, Rockefeller Institute of Government; 
[hyperlink, http://www.gao.govispecial.pubs/GA0-02-121/ap6.pdf] 
Briefing charts: [hyperlink, 
http://www.gao.gov/special.pubs/GA0-02-121/ap7.pdf] 

Innovations in Technology and Project Management Practices That Can 
Improve Human Services Representatives from the Human Services 
Information Technology Advisory Group: [hyperlink, 
http://www.gao.gov/special.pubs/GA0-02-121/ap8.pdf] 
Briefing charts: [hyperlink, 
http://www.gao.gov/special.pubs/GAO-02121/ap9.pdf] 

Lessons Learned Helping Organizations Make Smart Information 
Technology Decisions: 
Werner Schaer, Software Productivity Consortium, and Robert Glasser, 
State Information Technology Consortium [hyperlink, 
http://www.gao.gov/special.pubs/GA0-02-121/ap10.pdf] 
Briefing charts: [hyperlink, 
http://www.gao.gov/special.pubs/GAO-02121/ap11.pdf] 

Reactors: Joseph Leo, Science Applications International Corporation, 
and Bruce Eanet, Employment and Training Administration, U.S. 
Department of Labor. 

12:00-1:30: Lunch. 

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) [hyperlink, 
http://www.rockinst.org/publications/pubs_and_reports.html] 

1:30-3:00: 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. 

3:00-3:15: Break. 

3:15-5:00: Plenary Session: Reports From Breakout Groups And 
Discussion Of Their Ideas: 
Discussion Leader: Barry Van Lare, Welfare Information Network. 

5:15-6:30: Reception: 

6:30: Dinner: 

JUNE 29: 

8:00-9:00: Continental Breakfast: 

9:00-10:35: 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 [hyperlink, 
http://www.gao.gov/special.pubs/GA0-02-121/ap12.pdf]] 
Briefing charts: 
[hyperlink, http://www.gao.gov/special.pubs/GAO-02121/ap13.pdf] 
[hyperlink, http://www.gao.gov/special.pubs/GA0-02-121/ap14.pdf] 
[hyperlink, http://www.gao.gov/special.pubs/GA0-02-121/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: 
[hyperlink, http://www.gao.gov/special.pubs/GA0-02-121/ap16.pdf] 
Briefing charts: [hyperlink, 
http://www.gao.gov/special.pubs/GAO-02121/apl7.pdf]
Utah's Development of a One-Stop Operating System Russell Smith, Utah 
Department of Workforce Services [hyperlink, 
http://www.gao.gov/special.pubs/GA0-02-121/ap18.pdf] 
Briefing charts: [hyperlink, http://www.gao.gov/special.pubs/GAO-
02121/apl9.pdf] 

Reengineering Business Processes to Integrate the Delivery of Human 
Services in North Carolina: 
Bill Cox, North Carolina Department of Health and Human Services: 
[hyperlink, http://www.gao.gov/special.pubs/GA0-02-121/ap20.pdf] 
Briefing charts: [hyperlink, 
http://www.gao.gov/special.pubs/GAO-02121/ap2l.pdf] 

Reactor: Rachel Block, Centers for Medicare and Medicaid Services. 

10:35-10:45: Break: 
10:45-12:00: Breakout Sessions: 

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. 

Group 1: 
Moderator/Recorder: Sheri Steisel, National Conference of State 
Legislatures, and Jono Hildner, Hildner and Associates. 

Group 2:
Moderator/Reporter: Jan Lilja, Food and Nutrition Service, U.S. 
Department of Agriculture, and Eileen Sweeney, Center on Budget and 
Policy Priorities. 

Group 3: 
Moderator/Reporter: Evelyn Ganzglass, National Governors' Association, 
and Costis Toregas, Public Technology Incorporated. 

Group 4:
Moderator/Reporter: Catherine Born, University of Maryland School of 
Social Work, and Mark Ragan, Rockefeller Institute of Government. 

12:00-1:00: Lunch. 

1:00-2:30: Plenary Session: Reports From Breakout Groups And 
Discussion Of Their Proposals: 
Discussion Leader: Cynthia Fagnoni, GAO. 

2:30: Adjourn. 

[End of Appendix I] 

Appendix II: Conference Participants: 

Brenda Aguilar, Office of Information and Regulatory Affairs, U.S. 
Office of Management and Budget. 

Robin Arnold-Williams, Executive Director, Utah Department of Human 
Services. 

Gregory M. Benson, Jr., Executive Director, New York State Forum for 
Information Resource Management, Rockefeller Institute, State 
University of New York. 

Rachel Block, Deputy Director, Center for Medicaid and State Operations,
U.S. Centers for Medicare and Medicaid Services. 

Barbara Blum, Director, Research Forum on Children, Families, and the 
New Federalism National Center for Children in Poverty, Columbia 
University. 

Catherine E. Born, Research Associate Professor, University of 
Maryland School of Social Work. 

Constance Brines, National Industry Director, Social Services, Oracle 
Service Industries (HSITAG) Bart Broz, Executive Assistant, Office of 
Management Information Systems, Texas Department of Human Services. 

Elizabeth Caplick, Intern, Education, Workforce, and Income Security 
Issues, U.S. General Accounting Office. 

Jeremy Cox, Senior Analyst, Education, Workforce, and Income Security 
Issues, U.S. General Accounting Office. 

Bill Cox, Director, Division of Information Resource Management,
North Carolina Department of Health and Human Services. 

John Cuddy, Chief Information Officer, Oregon Department of Human 
Resources Colleen Daly, Director of Office of State Systems, U.S. 
Department of Health and Human Services. 

Randolph Desonia, Senior Research Associate, National Health Policy 
Forum. 

James T. Dimas, Senior Associate, Annie E. Casey Foundation. 

Marc Dreilinger, Director of MIS Planning, New York State Office of 
Temporary & Disability Assistance. 

Martin Dunning, Operations Manager, State and Local Government, Sun 
Microsystems, Inc. (HSITAG). 

Bruce Eanet, Administrator for Technology and Information Services, 
Employment and Training Administration, U.S. Department of Labor. 

Patricia Elston, Senior Analyst, Education, Workforce, and Income 
Security Issues, U.S. General Accounting Office. 

Cynthia M. Fagnoni, Managing Director, Education, Workforce, and 
Income Security Issues, U.S. General Accounting Office. 

Gene Falk, Specialist in Social Legislation, Congressional Research 
Service, The Library of Congress. 

Jerry Friedman, Executive Director, American Public Human Services 
Association Rick Friedman, Director, Division of State Systems, U.S. 
Centers for Medicare and Medicaid Services. 

Thomas Gais, Director, Federalism Research Group, Rockefeller 
Institute, State University of New York. 

Evelyn Ganzglass, Director, Employment and Social Services Policy 
Studies,National Governors' Association Center on Best Practices. 

Robert Glasser, President, State Information Technology Consortium. 

Melinda Gish, Analyst in Social Legislation, Congressional Research 
Service, The Library of Congress. 

Vicki Grant, Deputy Director, Supporting Families After Welfare. 

Gale Harris, Assistant Director, Education, Workforce, and Income 
Security Issues, U.S. General Accounting Office. 

Norman Heyl, Senior Information Systems Analyst, Information 
Technology, U.S. General Accounting Office. 

Jono Hildner, President, Hildner and Associates. 

Sean Hurley, Director, Data Collection and Analysis Division, 
Administration for Children and Families-OPRE U.S. Department of 
Health and Human Services. 

Judy Miller Jones, Director, National Health Policy Forum. 

April Kaplan, Program Manager, Welfare Information Network, The 
Finance Project. 

Rachel Kelly, Analyst in Social Legislation, Congressional Research 
Service, The Library of Congress. 

William G. Kowalski, Director, One Ease-E Link, New Jersey Department 
of Human Services. 

Linda Lambert, Assistant Director, Information Technology, U.S. 
General Accounting Office 

Erin Lee, Program Director for Information Technology, National 
Governors' Association. 

Joseph J. Leo, Vice President, Civilian Government Programs, Science 
Applications International Corporation. 

Susan Lerman, Senior Principal, AMS (HSITAG). 

Janice G. Lilja, Acting Deputy Administrator for Management, Food and 
Nutrition Service, U.S. Department of Agriculture. 

Judith Moore, Co-Director, National Health Policy Forum. 

Richard Nathan, Director, Rockefeller Institute of Government, State 
University of New York. 

Zoe Neuberger, Policy Analyst, Center on Budget and Policy Priorities 
Sigurd Nilsen, Director, Education, Workforce, and Income Security 
Issues, U.S. General Accounting Office. 

Lee Posey, Policy Specialist, National Conference of State 
Legislatures. 

Mark Ragan, Senior Fellow, Rockefeller Institute, State University of 
New York Michael Rich, Professor, Emory University. 

Richard Roper, President, The Roper Group. 

Elaine Ryan, Director of Governmental Affairs, American Public Human 
Services Association. 

Paul Saeman, Acting Director, Workforce Information Bureau, Wisconsin 
Department of Workforce Development. 

Sandra C. Salter, Manager of Information Systems Unit, Delaware 
Department of Health and Social Services. 

Werner Schaer, President and CEO, Software Productivity Consortium. 

Suzanne Scherr, Industry Solutions Executive, Electronic Data Systems 
(HSITAG). 

Melissa Seeley, Intern, U.S. Office of Management and Budget. 

Andrew Sherrill, Assistant Director, Education, Workforce, and Income 
Security Issues, U.S. General Accounting Office. 

Bard Shollenberger, Director of Government Relations, Children and 
Family Services, Lockheed-Martin/IMS. 

Larry Singer, Chief Information Officer, State of Georgia. 

Russell Smith, Deputy Director, Workforce Information Technology, Utah 
Department of Workforce Services. 

Reuben Snipper, Statistician/Policy Analyst, Office of Assistant 
Secretary for Planning and Evaluation, U.S. Department of Health and 
Human Services. 

Robert Stauffer, Deloitte Consulting (HSITAG). 

Shay Stautz, Staff Director, National Association of State Chief 
Information Officers. 

Rae Ann Steinly, Information Systems Specialist, American Public Human 
Services Association. 

Sheri Steisel, Senior Director, Human Services Committee, National 
Conference of State Legislatures. 

Eileen Sweeney, Director of State Low-Income Initiatives Project, 
Center on Budget and Policy Priorities. 

Costis Toregas, President, Public Technology Incorporated Lorrie 
Tritch, Deputy Director for Administration, Iowa Department of Human 
Services. 

Barry Van Lare, Executive Director, Welfare Information Network Sandra 
Vargas, County Administrator, Hennepin County, Minnesota. 

Gary Weeks, Director of Human Services Reform, Annie E. Casey 
Foundation. 

Matt Weidinger, Staff Director, Ways and Means Subcommittee on Human 
Resources, U.S. House of Representatives. 

[End of Appendix II] 

Appendix III: GAO Contacts and Staff Acknowledgments: 

GAO Contacts: 

Andrew Sherrill, (202) 512-7252, sherrilla@gao.gov: 
Patricia Elston (202) 512-3016, elstonp@gao.gov: 

Staff Acknowledgments: 

Elizabeth Caplick also helped arrange the conference that resulted in 
this report. 

[End of Appendix III] 

Footnotes: 

[1] See web addresses in appendix I to conference papers by Andrew 
Sherrill, "The Capabilities of State Automated Systems to Meet 
Information Needs in the Changing Landscape of Human Services," and by 
Richard Nathan and Mark Ragan, "Federalism and the Challenges of 
Improving Information Systems for Human Services." 

[2] The states were Arizona, Georgia, Kansas, Minnesota, Mississippi, 
Missouri, New Jersey, New York, Ohio, Texas, Utah, Washington, West 
Virginia, Wisconsin, and Wyoming. For further information about the 
methodology and findings, see U.S. General Accounting Office, Welfare 
Reform: Improving State Automated Systems Requires Coordinated Federal 
Effort, [hyperlink, http://www.gao.gov/products/GAO/HEHS-00-48], 
(Washington, D.C.: 2000). 

[3] For an overview of the earlier work, see the section on 
information systems in Richard P. Nathan and Thomas L. Gals, 
Implementing the Personal Responsibility Act of 1996: A First Look 
(Albany, NY: The Nelson A. Rockefeller Institute of Government, 1999). 

[4] U.S. Department of Health and Human Services, Administration for 
Children and Families, Office of State Systems, Report to Congress on 
Data Processing and Case Tracking in the Temporary Assistance for 
Needy Families Program (Washington, D.C.: HHS, Dec. 1997). 

[5] For historical background on federal financial participation 
rates, see U.S. General Accounting Office, Automated Welfare Systems: 
Historical Costs and Projections [hyperlink, 
http://www.gao.gov/products/GAO/AIMD-94-52FS], (Washington, D.C.: 
1994). 

[6] See appendix I for web address for the paper by HSITAG, 
"Innovations in Technology and Project Management Practices That Can 
Improve Human Services." 

[7] Gary Weeks, Integrating Human Services (Albany, New York: The 
Nelson A. Rockefeller Institute of Government, 2001), available at 
hyperlink, http://www.rockinst.org/publications/pubs_and_reports.html]. 

[8] GAO has reviewed the effects of variations in financial 
eligibility rules on administrative processes and low-income families' 
access to federal programs. See U.S. General Accounting Office, Means—
Tested Programs: Determining Financial Eligibility Is Cumbersome and 
Can Be Simplified [hyperlink, http://www.gao.gov/products/GAO-02-58], 
(Washington, D.C.: 2001). 

[9] See web address in appendix I for paper by Bill Cox, 
"Reengineering Business Processes to Integrate the Delivery of Human 
Services in North Carolina." 

[10] For information on some of the legal restrictions that can limit 
the ability of federal programs to effectively share information with 
one another, see U. S. General Accounting Office, Benefit and Loan 
Programs: Improved Data Sharing Could Enhance Program Integrity 
[hyperlink, http://www.gao.gov/products/GAO/HEHS-00-119], (Washington, 
D.C.: 2000). 

[11] See web address in app. I for William G. Kowalski, "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." 

[12] For a description of PIG and a discussion of issues involved in 
its adoption by the federal government, see U.S. General Accounting 
Office, Information Security: Advances and Remaining Challenges to 
Adoption of Public Key Infrastructure Technology GAO-01-277, 
(Washington, D.C.: 2001). 

[13] See web address in appendix I for Russell Smith, "Utah's 
Development of a One-Stop Operating System." 

[14] See web address in appendix I for Paul Saeman, "Wisconsin State 
System Initiatives for Eligibility and Work Based Programs." 

[15] See web address in appendix I for briefing charts by Sandra 
Vargas and Costis Toregas, "The Need to Align Federal, State, and 
Local Technology Investments: A Local Perspective." Public Technology 
Incorporated is a nonprofit national organization dedicated to 
furthering the use of technology in cities and counties for both 
elected officials and professional managers. 

[16] As described in their paper, other roles of such an institute 
would include developing and training state and local system project 
managers, showcasing and sharing information about good practices, and 
facilitating innovative systems designs at the state and local levels. 
See "Federalism and the Challenges of Improving Information Systems 
for Human Services." 

[17] Prior written approval under the APD process is required for 
combined state-federal expenditures of $5 million or more for systems 
acquired through an open competitive process; $1 million or more for 
systems acquired through a sole source process; and any amount for 
systems acquired with federal funds under the enhanced match, 
according to 45 C.F.R. Sec. 95.611. 

[18] See web address in appendix I for paper by Jerry Friedman and 
John Cuddy, "Reengineering the Approach by Which the Federal 
Government Approves and Monitors the Creation of State Human Services 
Information Systems." Jerry Friedman is now the executive director of 
the American Public Human Services Association. 

[19] Another HHS official added that under the APD process, states 
gain certain advantages from prior approval of federal funding, such 
as the ability to "lock in" the federal shares as borrowers might 
"lock in " interest rates, relief from some cash flow problems, and 
reduced risk that costs will be disallowed and thus not reimbursed by 
the federal agencies. 

[20] The Congress has asked GAO to review the APD and cost allocation 
requirements for information systems development for child support 
enforcement, child welfare, Medicaid, and the food stamp programs. 

[21] The cost allocation plan for systems development is reviewed by 
each of the federal agencies that will finance the effort, and within 
HHS, by the various program divisions and the State System's Policy 
Division of the Administration for Children and Families. The plan for 
systems operations is reviewed by HHS's Division of Cost Allocation as 
outlined in Office of Management and Budget (OMB) Circular A-87. 

[22] Cost allocation requirements are based on appropriations law at 
31 U.S.C. 1301 (a) and further explained in OMB Circular A-87 and "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," available at 
[hyperlink, 
http://www.whitehouse.gov/omb/circulars/a087/a087-all.html] and 
hyperlink, http://www.hhs.gov/grantsnet/statelmdex.htm]. 

[23] For example, Cox raised the issue of how costs should be 
allocated in a project in which the first phase of development may 
benefit only a particular program, whereas the second phase benefits 
several programs. 
	
[24] See web address in appendix I for paper by Werner Schaer and 
Robert Glasser, "Lessons Learned Helping Organizations Make Smart 
Information Technology Decisions." 

[25] See U.S. General Accounting Office, Electronic Government: 
Federal Initiatives Are Evolving Rapidly But They Face Significant 
Challenges [hyperlink, 
http://www.gao.gov/products/GAO/T-AIMD/GGD-00-179], (Washington, D.C.: 
2000) and Electronic Government: Challenges Must Be Addressed With 
Effective Leadership And Management [hyperlink, 
http://www.gao.gov/products/GAO-01-959T], (Washington, D.C.: 2001). 

[26] GAO's prior work reported that states have encountered long-
standing problems in recruiting and retaining information technology 
staff. See [hyperlink, http://www.gao.gov/products/GAO/HEHS-00-48]. 

[27] GAO recommended that a federal interagency group be established 
to identify, and develop implementation plans for, federal actions 
that would facilitate states' efforts to improve their information 
systems for federal programs that serve low-income families. The 
report said that the group should consider actions in several areas, 
such as disseminating information on best practices for managing 
information technology; reviewing, and modifying as needed, the APD 
process; and facilitating links among the automated systems used by 
different state and local agencies through such means as supporting 
demonstration projects and coordinating data reporting requirements 
for different programs. See [hyperlink, 
http://www.gao.gov/products/GAO/HEHS-00-48]. 

[End of section] 

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