FSSA chief admits to privatized welfare problems


Sandra Chapman/13 Investigates

Indianapolis - There are renewed calls for the state to pull the plug on its billion-dollar welfare privatization program, or at the very least, stop the one-way flow of money until contractors get it right.

13 Investigates has more on the tough questions facing the agency's leader.

FSSA Secretary Ann Murphy faced our cameras and legislative scrutiny after weeks of silence amid a growing public outcry over her agency's botched billion-dollar welfare system.

The big question: Why pay full contract price when only a third of Indiana counties are online and the remaining roll out is more than a year late?

"Has there been a cost adjustment, we're not getting what was targeted?" asked State Senator, Karen Tallian (D-Portage).

"Right, there have not been any cost adjustments...because we keep anticipating that we're going to roll out. We're trying to fix the problems," Murphy responded.

Kim Dodson of ARC Indiana, an agency that helps disabled adults, had a strong reaction. "I hope that this committee is as appalled as I am," she said.

"I think it's important that they be held, their feet be held to the fire and that taxpayers of Indiana should not be responsible for their failure to deliver services in a timely fashion," added Representative Suzanne Crouch, (R-Evansville).

Secretary Murphy says the only state sanctions leveled against IBM and its partners under the $1.34 billion deal is a $260,000 fine. But the state did give the company a $180 million increase despite lost documents, wrongly denied benefits and high error rates.

"We will likely face sanctions," quipped State Representative Dennis Avery, (D-Evansville).

In fact, Indiana is in the red and facing possible sanctions for its food stamp mistakes, including error rates at a five-year high of 7 percent in one category that takes into account the number of Hoosiers helped but who either got too much or too little assistance. The error rate is as high as 12 percent for clients who received no help at all.

State Rep. Jeff Espich (R-Uniondale) says he believes the FSSA is helping more people than ever before.

"There's 100,000 more people on Medicaid today than there was two years ago," he countered.

"We're seeing improvements on making sure the electronic documents are attached to the right cases," Murphy testified. But she told the panel there was still cause for concern. "Where we're still not seeing much improvement in the timeliness and we do think there is a problem with the...there's not sufficient face to face interactions," she said.

Murphy's admission comes as USDA Secretary Tom Vilsack informed 7th District Congressman Andre Carson and fellow Democrat Baron Hill of the 9th District that he would not pull the plug on FSSA's ability to privatize food stamps.

In a letter obtained by 13 Investigates, Vilsack says the Food and Nutrition Service (FNS) "is concerned about any decline in timeliness. Timely and accurate processing of applications is critical to meeting the needs of low-income people....FNS will continue to monitor Indiana's administration of the program."

But some lawmakers and advocates want action now, including Paul Chase, the Associate State Director for Public Policy with AARP Indiana.

"We cannot continue to experiment when people's lives are at state," Chase warned the committee.

State Representative Gail Rieken (D-Evansville), called for an audit of the program during the last legislative session, but her proposal was tabled.

She now says time has run out. "I hope this committee will take immediate action and move beyond any political problem, calling for a cancellation of IBM/ACS contract."

The Budget Committee Chairman, State Senator Luke Kenley (R-Noblesville), says the committee will revisit these issues at its October 23rd hearing and directed Murphy to come back with more answers.

"I have a feeling we're not really getting the whole story here," he said.

Murphy confirmed Indiana also overpaid welfare benefits by $46 million, and underpaid by $12 million the highest amounts for both in almost ten years.

While she says no decision has been made as to the future of the deal, IBM and its partners have until next Wednesday to turn things around.

FSSA will announce it's decision in mid-October. The committee plans to follow up on October 23rd.

Related stories:

FSSA contractor ACS offering bonus incentives to employees

Indiana budget panel takes up FSSA-IBM deal Sept. 25

Investigation reveals FSSA errors paid with tax dollars