    [House Hearing, 109 Congress]
    [From the U.S. Government Publishing Office]

                               USE OF TECHNOLOGY
                       TO IMPROVE PUBLIC BENEFIT PROGRAMS

    =======================================================================

                                    HEARING

                                   before the

                        SUBCOMMITTEE ON HUMAN RESOURCES

                                     of the

                          COMMITTEE ON WAYS AND MEANS
                         U.S. HOUSE OF REPRESENTATIVES

                           ONE HUNDRED NINTH CONGRESS

                                 SECOND SESSION

                                   __________

                                 APRIL 5, 2006

                                   __________

                               Serial No. 109-69

                                   __________

             Printed for the use of the Committee on Ways and Means

                        U.S. GOVERNMENT PRINTING OFFICE
    30-442                      WASHINGTON : 2006
    _____________________________________________________________________________
    For Sale by the Superintendent of Documents, U.S. Government Printing Office
    Internet: bookstore.gpo.gov  Phone: toll free (866) 512-1800; (202) 512�091800
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                          COMMITTEE ON WAYS AND MEANS

                       BILL THOMAS, California, Chairman

    E. CLAY SHAW, JR., Florida           CHARLES B. RANGEL, New York
    NANCY L. JOHNSON, Connecticut        FORTNEY PETE STARK, California
    WALLY HERGER, California             SANDER M. LEVIN, Michigan
    JIM MCCRERY, Louisiana               BENJAMIN L. CARDIN, Maryland
    DAVE CAMP, Michigan                  JIM MCDERMOTT, Washington
    JIM RAMSTAD, Minnesota               JOHN LEWIS, Georgia
    JIM NUSSLE, Iowa                     RICHARD E. NEAL, Massachusetts
    SAM JOHNSON, Texas                   MICHAEL R. MCNULTY, New York
    PHIL ENGLISH, Pennsylvania           WILLIAM J. JEFFERSON, Louisiana
    J.D. HAYWORTH, Arizona               JOHN S. TANNER, Tennessee
    JERRY WELLER, Illinois               XAVIER BECERRA, California
    KENNY C. HULSHOF, Missouri           LLOYD DOGGETT, Texas
    RON LEWIS, Kentucky                  EARL POMEROY, North Dakota
    MARK FOLEY, Florida                  STEPHANIE TUBBS JONES, Ohio
    KEVIN BRADY, Texas                   MIKE THOMPSON, California
    THOMAS M. REYNOLDS, New York         JOHN B. LARSON, Connecticut
    PAUL RYAN, Wisconsin                 RAHM EMANUEL, Illinois
    ERIC CANTOR, Virginia
    JOHN LINDER, Georgia
    BOB BEAUPREZ, Colorado
    MELISSA A. HART, Pennsylvania
    CHRIS CHOCOLA, Indiana
    DEVIN NUNES, California

                        Allison H. Giles, Chief of Staff

                      Janice Mays, Minority Chief Counsel

                                     ______

                        SUBCOMMITTEE ON HUMAN RESOURCES

                       WALLY HERGER, California, Chairman

    NANCY L. JOHNSON, Connecticut        JIM MCDERMOTT, Washington
    BOB BEAUPREZ, Colorado               BENJAMIN L. CARDIN, Maryland
    MELISSA A. HART, Pennsylvania        FORTNEY PETE STARK, California
    JIM MCCRERY, Louisiana               XAVIER BECERRA, California
    DAVE CAMP, Michigan                  RAHM EMANUEL, Illinois
    PHIL ENGLISH, Pennsylvania
    DEVIN NUNES, California

    Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public
    hearing records of the Committee on Ways and Means are also published
    in electronic form. The printed hearing record remains the official
    version. Because electronic submissions are used to prepare both
    printed and electronic versions of the hearing record, the process of
    converting between various electronic formats may introduce
    unintentional errors or omissions. Such occurrences are inherent in the
    current publication process and should diminish as the process is
    further refined.

                                C O N T E N T S

                                   __________

                                                                       Page

    Advisory of March 29, 2006, announcing the hearing...............     2

                                   WITNESSES

    Texas Workforce Commission, Diane Rath, Chair and Commissioner
      Representing the Public, Austin, Texas.........................     7
    Louisiana Department of Social Services, Marketa Gautreau,
      Assistant Secretary of Community Services, Baton Rouge,
      Louisiana......................................................    12
    Florida Department of Children and Families, Don Winstead, Deputy
      Secretary, Tallahassee, Florida................................    16
    Oklahoma Department of Human Services, Lisa Henley, Project
      Director of the Oklahoma EBT Project, Oklahoma City, Oklahoma..    28
    New York City Human Resources Administration, Dennis Fecci,
      Former Chief Information Officer, New York, New York...........    32

                           SUBMISSIONS FOR THE RECORD

    Cohen, Gregory, and Sherri Heller, ACS Government Solutions,
      joint letter...................................................    48
    Gerry, Hon. Martin, Social Security Administration, letter.......    49
    Hammond, Hon. Donald V., U.S. Department of the Treasury,
      statement......................................................    53
    Kentucky Cabinet for Health and Family Services, Frankfort, KY,
      statement......................................................    54
    Kibble-Smith, Brian, J.P. Morgan Chase Treasury Services,
      Chicago, IL, statement.........................................    55
    National Association of State Workforce Agencies, statement......    58
    Newman, Brent, Accuity Inc., Skokie, IL, statement...............    62
    SAS Institute, Cary, NC, statement...............................    64
    Visa U.S.A. Inc., statement......................................    70

                               USE OF TECHNOLOGY
                       TO IMPROVE PUBLIC BENEFIT PROGRAMS

                                  ----------

                            WEDNESDAY, APRIL 5, 2006

                 U.S. House of Representatives,
                           Committee on Ways and Means,
                               Subcommittee on Human Resources,
                                                        Washington, DC.

        The Subcommittee met, pursuant to notice, at 3:04 p.m., in
    room B-318, Rayburn House Office Building, Hon. Wally Herger
    (Chairman of the Subcommittee) presiding.
        [The advisory announcing the hearing follows:]

    ADVISORY FROM THE COMMITTEE ON WAYS AND MEANS

                        SUBCOMMITTEE ON HUMAN RESOURCES

                                                    CONTACT: (202) 225-1025
    FOR IMMEDIATE RELEASE
    March 29, 2006
    HR-7

                     Herger Announces Hearing on the Use of

                 Technology to Improve Public Benefit Programs

        Congressman Wally Herger (R-CA), Chairman, Subcommittee on Human
    Resources of the Committee on Ways and Means, today announced that the
    Subcommittee will hold a hearing on the use of technology to improve
    public benefit programs. The hearing will take place on Wednesday,
    April 5, 2006, in room B-318 Rayburn House Office Building, beginning
    at 3:00 p.m.

        In view of the limited time available to hear witnesses, oral
    testimony at this hearing will be from invited witnesses only.
    Witnesses will include program administrators and other experts
    familiar with how technologies have been used to improve public benefit
    programs. However, any individual or organization not scheduled for an
    oral appearance may submit a written statement for consideration by the
    Subcommittee and possible inclusion in the printed record of the
    hearing.

    BACKGROUND:

        Recent improvements in technology can offer better service to
    individuals seeking a variety of public benefits.

        Some technologies already have been applied widely. For example,
    electronic payments exceeded payments by paper checks for the first
    time in 2003. In its application in government programs, this
    increasing use of electronic payments has accelerated individuals'
    access to needed funds while creating billions of dollars in program
    savings for taxpayers and reducing fraud and abuse. Surveys suggest
    benefit recipients are 30 times less likely to experience a payment
    problem with electronic payments compared to paper checks, which is
    essential in programs that assist low-income individuals or those
    recently laid off from work.

        Other technologies are still under development. Some States and
    agencies recently implemented more efficient application, identity
    verification, and service monitoring processes designed to provide
    better services to those in need. For example, pilot programs using
    child care ``smart card'' technology can better track services provided
    to children, making better use of existing resources. Other States are
    poised to make more extensive use of data matching to better ensure the
    provision of benefits to eligible individuals, and to more efficiently
    target additional services such as work supports to those who recently
    found a job.

        In announcing the hearing, Chairman Herger stated, ``Americans from
    all walks of life have experienced in recent years the benefits of new
    technologies in their homes and workplaces. These improvements have led
    to better, less expensive and more accessible services. Families and
    individuals in need of government assistance should benefit from the
    same revolutionary advances in getting the help they need. This hearing
    will explore how programs and agencies are using these new technologies
    to better serve beneficiaries and taxpayers alike. It also will provide
    an opportunity to review what can be done to further improve services,
    which is what the American people rightly expect.''

    FOCUS OF THE HEARING:

        The hearing will focus on the use of technology to improve public
    benefit programs under the Subcommittee's jurisdiction.

    DETAILS FOR SUBMISSION OF WRITTEN COMMENTS:

        Please Note: Any person(s) and/or organization(s) wishing to submit
    for the hearing record must follow the appropriate link on the hearing
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    ``109th Congress'' from the menu entitled, ``Hearing Archives'' (http:/
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    for which you would like to submit, and click on the link entitled,
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    followed the online instructions, completing all informational forms
    and clicking ``submit'' on the final page, an email will be sent to the
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    submission for the record. You MUST REPLY to the email and ATTACH your
    submission as a Word or WordPerfect document, in compliance with the
    formatting requirements listed below, by close of business Wednesday,
    April 19, 2006. Finally, please note that due to the change in House
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    FORMATTING REQUIREMENTS:

        The Committee relies on electronic submissions for printing the
    official hearing record. As always, submissions will be included in the
    record according to the discretion of the Committee. The Committee will
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        2. Copies of whole documents submitted as exhibit material will not
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        3. All submissions must include a list of all clients, persons,
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        Note: All Committee advisories and news releases are available on
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        The Committee seeks to make its facilities accessible to persons
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    call 202-225-1721 or 202-226-3411 TTD/TTY in advance of the event (four
    business days notice is requested). Questions with regard to special
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    noted above.

        Chairman HERGER. Welcome. At today's hearing we will review
    ways technology can be used in public benefits programs to
    improve customer service, better prevent fraud and abuse, and
    even produce savings for taxpayers. This may seem like rocket
    science to some, but the advantages of using technology are
    both obvious and necessary for programs to work successfully.
    Consider how people apply for welfare or other unemployment
    benefits. The old way involved going to and waiting your turn
    in a government office, providing information face to face to a
    caseworker who fills out a paper form, and then waiting to see
    if you qualified. This is time intensive and labor intensive
    for applicants and government workers. It is also expensive to
    administer and often frustrating to all involved. Despite those
    flaws, some States and programs still operate this way.
        The new way involves encouraging individuals to apply for
    key benefits either over the phone or online. This is easier,
    faster, and more convenient for applicants. It is also cheaper,
    as several States will describe today, and it allows States to
    focus more resources on what people really need, like helping
    find a job, getting job training or referring individuals to
    substance abuse treatment. The new way also has other important
    benefits. Consider disaster preparedness. States and agencies
    that have moved to online application for and the electronic
    payment of benefits are able to serve more people better and
    faster under the very worst circumstances. As we saw following
    Hurricane Katrina and other storms, programs that maintained
    only paper files effectively lost recipients. Paper checks sat
    unopened in post offices or mailboxes, and coordinating
    benefits people needed was even harder than under normal
    circumstances.
        Today we will explore what several States have done to
    improve their use of technology in these programs, and what
    more remains to be done. We will learn about how technology can
    improve service delivery at every stage of the benefit process,
    whether it is application, payment, or ensuring program
    integrity. We will learn how real people benefit along the way,
    which is the most important part. For instance, surveys suggest
    people who receive benefits the old way, by paper check, are 30
    times more likely to encounter a payment problem than people
    who receive electronic payments. Checks get lost, damaged or
    stolen. Checks take days to arrive in the mail. Checks need to
    be signed, delivered and deposited. Checks cost programs more
    in the process and too many recipients need to pay fees just to
    get their check cashed.
        It is no wonder States are increasingly turning to direct
    deposit or other electronic payments for welfare, unemployment,
    child support and other benefits. Recipients who get electronic
    payments are the biggest beneficiaries of this improved benefit
    delivery system. Today we will learn more about how we can use
    these and other improvements and technology to better serve all
    Americans. On a day-to-day basis and in times of disaster such
    as Hurricane Katrina, it turns out that it is smarter, cheaper,
    and faster than the old way, both for recipients and taxpayers
    alike. That is the kind of win-win solution we should be
    looking for across all public benefit programs. Mr. McDermott,
    would you care to make a statement?
        Mr. MCDERMOTT. Thank you, Mr. Chairman. For too many
    Americans, we are the last line of defense. That is painfully
    true after the hurricanes which devastated the Gulf Coast last
    year. Thousands of hurricane victims were scattered by the
    winds to cities across the country, put in my city of Seattle,
    and no doubt, Mr. Chairman, to the communities in your own
    congressional district. It was estimated that we had about
    5,000 people in Seattle from New Orleans, and that is a long
    way from Louisiana. I recently held a town meeting in Seattle,
    where displaced Americans recounted their stories of their
    personal triumphs and public malfunction. I have to agree after
    touring the region--we went down with the Speaker and Nancy
    Pelosi, the Minority Leader--that during that trip we saw
    things that confirmed what I heard from people in Seattle.
        Now, in New Orleans a member of the clergy told us their
    biggest fear was that they would drop off the front page of the
    newspaper, and drop off page ten, and drop off the paper all
    together. I went back and looked at my own Seattle newspaper,
    there was not a thing in there about Katrina of New Orleans or
    anything else. It is a real problem that the problems that we
    see as acute in event, become chronic and are soon forgotten by
    most of the country. One extraordinary public servant you will
    meet shortly, told me how she lived, not just afraid, but
    really terrified for weeks after the storm because hundreds of
    foster kids were missing and they had to find them one by one.
    It was going out looking for the sheep one at a time.
        Maybe it is because I represent the city that is at the
    forefront of our technological transformation with Microsoft
    and all the rest of what goes on in Seattle, I firmly believe
    technology can have a profound and positive influence in our
    lives if used appropriately. I really welcome today's hearing
    to explore the role technology can play in how public benefit
    programs are implemented. We cannot forget for a second that we
    must translate the ones and zeros of computerese into the
    meaning of the needs of people especially children. This is not
    a theoretical discussion. If we learned anything from Katrina
    and Rita, it is that we need electronic lifelines and homing
    beacons to better protect foster and disadvantaged kids during
    and after natural disasters. We really need to build an
    electronic levee, if you will, around the vulnerable kids, and
    we need guidance and real-world experience to help us do it
    right, and that is why I am pleased to have someone here from
    the Gulf Coast, the head of Louisiana's State Child Welfare
    Program to join us today. Marketa Gautreau is someone who lived
    through the nightmare of locating hundreds of missing kids, and
    someone whose advice and counsel we should heed.
        When we were in New Orleans, this is about a month ago the
    largest radio station was already doing the countdown to the
    beginning of the hurricane season again. We are talking 57 days
    and it starts all over again. Now, technology can undoubtedly
    help us track kids and better understand their backgrounds, but
    what comes next? Well, remember, it is about meeting the needs
    of vulnerable Americans in the wake of a crisis. We think of a
    hurricane, but an abuse event is the same kind of crisis in a
    family. We have critical questions that have to be answered.
    How can we help families get past the emotional trauma they
    experience during and after a disaster? How do we better
    support the children and families outside the child welfare
    system? What more should we be doing to ensure that children
    can be safely maintained in their own homes? How can we ensure
    the children, who must be placed in foster care, are safe and
    their needs met, and are reunited with parents or are
    permanently placed with their loved ones on a timely basis?
        Technology can help, but we need a dedicated and qualified
    workforce to determine the needs of every vulnerable child, and
    you got to do it one at a time. You can't do it in groups. When
    we know what needs to be done, we must act, especially if we
    have to remove a child from his or her parents. It is about
    action. That becomes more and more difficult for States as the
    Congress reduces its commitment to child welfare programs, to
    Medicaid and to the Social Services Block Grant (SSBG). Against
    that backdrop of congressional withdrawal, ordinary Americans
    stepped in to nurture vulnerable children as foster parents.
    They have opened their homes and hearts even as the Republican
    leadership in this Congress has closed their eyes and wallet,
    and you will see it in the budget that we pass this week. When
    I was in New Orleans I met foster parents who told me about the
    challenges they faced. The first storm was forecast in the
    Gulf. The second storm was not forecast out of Washington, D.C.
    Good, decent, ordinary Americans leaped in, but the Federal
    Government ducked out, and the burden is too great to be
    carried by the American people alone or by technology.
    Technology would not have fixed much of what went on down
    there.
        To meet the needs of vulnerable children we need to recruit
    and retain foster parents and adoptive parents. We need the
    adequately fund services aimed to help vulnerable children and
    their families. We are not adequately doing any of those things
    now, in my opinion. I look forward to hearing more about that
    technology can meet our responsibility to kids, but ones and
    zeros will never replace hearts and minds. As we know in
    Seattle, and lots of other American citizens know, the Gulf
    Coast is certainly not the only place where a natural disaster
    can and will strike. In Seattle we are waiting for the big one,
    the big shaker. We had a shaker on the 26th of October 2001. It
    was an 8.6, and we know that we will have one. I am looking at
    this not as something in other places, but what affects my
    area. Mr. Chairman, you also live on the West Coast so you know
    about shakers too. I look forward to hearing the testimony of
    the witnesses. Thank you.
        Chairman HERGER. Thank you, Mr. McDermott. Before we move
    on to our testimony today I want to remind our witnesses to
    limit their oral statements to 5 minutes. However, without
    objection, all the written testimony will be made a part of the
    permanent record. We have one panel today, and our witnesses
    who are seated at the table. To introduce our first witness,
    the gentleman from Texas, Mr. Johnson.
        Mr. JOHNSON OF TEXAS. Thank you, Mr. Chairman. I appreciate
    that. Diane Rath, Chairwoman of the Texas Workforce Commission
    (TWC), we are glad to have you here today. She has overseen
    implementation of welfare reforms, and the rolls have decreased
    71 percent since 1996. She understands the importance of local
    involvement. Most of her budget is in control of the local
    workforce boards, who know the needs of their neighbors. In the
    wake of Katrina, she has been working to get evacuees from
    Louisiana trained and back into the workforce. We have done our
    best here in Congress to make sure Texas is able to continue to
    offer those services as long as they are necessary. I will tell
    you what, her staff reflects the kind of leader a person is,
    and I have heard nothing but great things about your staff here
    in Washington. Thank you for being here. We are glad to hear
    you testify. Thank you, Mr. Chairman, for allowing me to make
    the introduction.
        Chairman HERGER. You are welcome. Thank you. The gentleman
    from Louisiana, Mr. McCrery, to introduce one of our witnesses.
        Mr. MCCRERY. Thank you, Mr. Chairman. We are also delighted
    to have with us today, Ms. Marketa Gautreau from Baton Rouge,
    the Assistant Secretary of Community Services, Louisiana
    Department of Social Services. I think, as my colleague from
    Washington pointed out, this is a timely hearing based on the
    experience we have had on the Gulf Coast with, frankly, having
    a lack of technology to assist us in the aftermath. The State
    of Louisiana, along with others, had a difficult time, to say
    the least, putting back together all of our records, locating
    children and so forth. This is in fact a timely hearing.
        I think, Ms. Gautreau would join me though in thanking Dr.
    McDermott, Chairman Herger, the Congress, not the Republican
    Congress, but the Congress, because Democrats and Republicans
    worked together to try to get immediate aid in the form of
    unemployment compensation, money. Louisiana got about $400
    million quickly there to bolster our fund, getting about $220
    million for social services. Those kinds of quick responses
    that we join together here in the Congress to provide, were, I
    think, indispensable to my State, Ms. Gautreau's State, just
    really surviving in those first few months following Katrina. I
    want to thank Dr. McDermott for going with us down to
    Louisiana, and for his efforts to really get into the nitty-
    gritty details of what the needs are, and for offering very
    constructive suggestions, really, since September 1st, on ways
    to help. It is very much appreciated. This Congress, and this
    Committee particularly, the staff on both sides of the aisle,
    Democrat and Republican, responded admirably to my call for
    help and others' calls for help. Ms. Gautreau, welcome, and we
    are delighted to have you and looking forward to your
    testimony.
        Chairman HERGER. I thank the gentleman from Louisiana. We
    would also like to welcome Mr. Don Winstead, Deputy Secretary
    of the Florida Department of Children and Families (DCF), from
    Tallahassee, Florida; Ms. Lisa Henley, Project Director of the
    Oklahoma EBT Project for the Oklahoma Department of Human
    Services, from Oklahoma City, Oklahoma; and Mr. Dennis Fecci,
    Former Chief Information Officer for the New York City Human
    Resources Administration, from New York, New York. With that,
    the gentleman from Louisiana, to inquire. Excuse me.
        [Laughter.]
        Ms. Rath to testify, please.

     STATEMENT OF DIANE RATH, CHAIR AND COMMISSIONER REPRESENTING
         THE PUBLIC, TEXAS WORKFORCE COMMISSION, AUSTIN, TEXAS

        Ms. RATH. Thank you. Good afternoon, Mr. Chairman, Members
    of the Committee, and thank you for that introduction, Mr.
    Johnson. I appreciate it. I am Diane Rath, and I am Chair and
    Commissioner of TWC, and we appreciate being invited to share
    the experience of Texas in using technology to more efficiently
    serve our residents. We no longer have unemployment offices in
    Texas. In 1998 we established Tele-Centers that allow Texans to
    file unemployment claims and to file for payments online or
    over the telephone. We also created a comprehensive online
    capability for our unemployment insurance program. Claimants
    and employers can complete all their business with TWC online
    if they so choose. 90 percent of our users now access our
    service without having to go to an office or stand in line.
        One of the Commission's most valuable tools is the
    Workforce Information System of Texas (TWIST). The TWIST is a
    centralized point of intake, case management, service delivery
    and reporting for our employment and training programs. In
    addition to the advantage of integrated case management, it
    eliminates duplication in enrollment. Folks only have to give
    us information one time, and it provides real-time access to
    information. Any time we need to check enrollment figures for a
    particular program, workforce board, or individual, we can do
    so without any time lag. The linchpin of our employment
    services program is our award-winning WorkInTexas.com, a real-
    time website designed to match employers of all sizes and all
    industries, at no charge, with qualified job candidates, and we
    have separate sections for both employers and job seekers.
    WorkInTexas is fully integrated with our TWIST, so that
    participants in various employment and training programs are
    automatically registered. All unemployment claimants are
    required to register and make a minimum of three work searches
    per week. Since its debut almost 2 years ago, more than 147,000
    employers--that is about one out of three employers in Texas--
    have used WorkInTexas.com. More than 415,000 people have found
    jobs using WorkInTexas.
        Our agency's total capabilities were tested like never
    before last fall with Hurricanes Katrina and Rita. No matter
    how you plan, nothing can prepare you for nearly a million
    people to cross over your State line with no advance notice and
    no timeline for returning home. Almost half a million have
    remained in Texas. Our resources and manpower have been
    challenged, but we have been able to provide employment and
    support services to tens of thousands of our neighbors who had
    nowhere else to turn, and we were able to do that only because
    of our commitment to technology and our ability to adapt. The
    TWC immediately stepped forward to spearhead a multi-State
    effort to process a massive of Louisiana unemployment claims.
    We created a separate toll free number for Louisiana callers
    that went into our Texas Unemployment Insurance (UI) Tele-
    Centers, and then were either handled by our representatives or
    routed to other States that had volunteered to help. Our use of
    technology allowed us to reroute those calls to other States in
    a way that was seamless. The caller didn't know if they were
    speaking to someone from Rhode Island or Washington unless they
    picked up on the accents.
        The hotline we established received more than 2.6 million
    calls, of which Texas employees handled nearly half. We also
    helped Louisiana development an Internet application for both
    regular and disaster UI, used by their residents or our staff.
    To date, Texas has processed nearly 68,000 unemployment claims
    for Louisiana. On the workforce side, our local workforce
    boards established temporary workforce shelter centers at the
    major hurricane shelters. These centers allowed evacuees to
    file for unemployment, to receive job counseling, conduct a job
    search, prepare a resume, meet with employers, and attend job
    fairs on site. Each center had computers available, and we
    encouraged job seekers to use WorkInTexas to identify
    opportunities for employment. Our local boards also deployed
    mobile workforce units, each equipped with computers and
    satellite Internet access.
        We adapted WorkInTexas to allow Louisiana job seekers to
    indicate their evacuee status, and allow employers to indicate
    a preference to hire Katrina evacuees. We partnered with the
    Louisiana Association of Business and Industry on an initiative
    to recruit workers to fill their members' critical labor
    shortage. Now we have Louisiana employers and Louisiana job
    seekers looking for and finding each other on WorkInTexas.com.
    We have also created a separate tracking system for these
    Louisiana job matches. Technology has helped us integrate our
    various programs and provide a more comprehensive and coherent
    approach to helping people find work. Service integration had
    kept Texas on a leading edge of workforce service delivery, and
    we believe that other States can achieve similar results if
    they are willing to abandon their old models and embrace
    technology and service integration. More details about our
    initiatives are found in the written testimony, and I
    appreciate the chance to share our story and look forward to
    your questions.
        [The prepared statement of Ms. Rath follows:]

       Statement of Diane Rath, Chair and Commissioner Representing the
               Public, Texas Workforce Commission, Austin, Texas

        Chairman Herger, Ranking Member McDermott and members, good
    afternoon. My name is Diane Rath, and I am the Chair and Commissioner
    Representing the Public for the Texas Workforce Commission. Thank you
    for inviting me to share with you how TWC is creatively using
    technology to provide high-quality services to Texans.
        By way of background, the Texas Workforce Commission celebrated its
    10\th\ anniversary last month. Prior to 1995, the state's 28 employment
    and training programs were spread across 10 different state agencies,
    but then-Governor George W. Bush believed that Texans would be better
    served by bringing all the traditional labor programs--payday, UI,
    etc.--all employment services--including TANF, Food Stamp, Wagner-
    Peyser, and state funded--and child care under a single umbrella. The
    Commission was created as that umbrella, and we were additionally
    charged with developing a new model for integrated delivery of those
    services. We have now block-granted nine of those programs--
    representing $800 million of our total budget of $1.1 billion--to our
    network of 28 Local Workforce Development Boards.
        First of all, we no longer have local unemployment offices in
    Texas. In 1998, TWC established ``Tele-Centers'' that allow Texans to
    file unemployment claims and request payments over the telephone. In
    2002, we also created a comprehensive online capability for our UI
    program. Not only can claimants file their claims online, but employers
    can also create new tax accounts, file their tax reports, respond to
    separation requests, and report unemployment fraud online. Instead of
    having to drive across town or to a different county to wait in line at
    an unemployment office, claimants and employers can transact their
    business with us from their homes or offices.
        We have two major initiatives that will make extensive use of
    technology to improve our unemployment program. First, we are
    transitioning from paper checks to direct deposit and debit cards for
    unemployment benefits. The Lone Star Card, Texas' debit card for social
    service benefits, has been accepted by the public and reduced both
    administrative costs and fraud associated with delivering benefits. We
    have also started work towards a complete integration of our
    Unemployment Insurance and Employment Services programs.
        One of the Texas Workforce Commission's most valuable tools is
    TWIST, The Workforce Information System of Texas. TWIST is a
    centralized point of intake, case management, service delivery, and
    reporting for six of our largest employment and training programs.
    Besides the obvious advantage of integrated case management, this
    system helps us in three critical ways. First, it eliminates
    duplication in enrollment. If someone enrolls in one of our programs
    and then wants to enroll in others, they only have to provide us the
    information the first time. Second, it creates economies of scale.
    Third, it provides us with real-time access to performance data. Any
    time we want to check enrollment figures for a particular program,
    workforce board, or individual, we can do so without any time lag in
    the data.
        The linchpin of our Employment Services program is WorkInTexas.com,
    a real-time web site designed to match employers of all sizes and
    industries with qualified job candidates. We have separate sections for
    employer and job seeker resources, and because it is on the Internet,
    it is available 24 hours a day, 7 days a week, 365 days a year.
        WorkInTexas.com takes a unique approach as a recruitment and
    employment resource. The job posting format allows employers to match
    on multiple combinations of occupation experience and education, view
    detailed comparisons of each job seeker to their job's requirements,
    and create customized screening questions to obtain specific
    information from interested job seekers. Employers can set up multiple
    accounts for different hiring groups within their organization, manage
    their account and its users, and manage their job postings. Even
    without posting a job, they can test the workforce and training
    available in potential new job sites, or perform keyword searches to
    find specific skills.
        Job seekers can create multiple matching combinations for different
    location and pay preferences, use a wizard to create a professional
    resume, view detailed comparisons of their qualifications to each job
    posting, and email job postings to their friends. Job seekers
    interested in career planning can link to a skills-assessment test,
    research the suggested occupations and available training, and select
    occupations to add to their matching profile in WorkInTexas.com.
        WorkInTexas.com is fully integrated with TWIST so that the
    participants in our various employment and training programs are
    automatically registered for WorkInTexas.com. All unemployment
    claimants are required to register with WorkInTexas.com and make a
    minimum of three work searches per week.
        Since its debut not quite two years ago, more than 147,000
    employers--roughly one-third of the state's total--have registered on
    WorkInTexas.com. These employers have access to nearly 4.2 million job
    seekers. More than 410,000 people have been hired through the site--
    about one-third of these people had been receiving unemployment at the
    time of their hiring. WorkInTexas.com was selected by Harvard
    University's Ash Institute as one of the ``Top 50 Government
    Innovations for 2006,'' and took first place for the Government-to-
    Business category in the 2004 Digital Government Achievement Awards, a
    national award program recognizing outstanding government Web sites and
    services.
        Our agency's total capabilities were tested last fall like never
    before by Hurricanes Katrina and Rita. No matter how many worst-case
    scenarios you plan, nothing can prepare you for having nearly a million
    people cross over your state line with no advance notice, and no
    timetable for returning home. Almost half a million have remained in
    Texas. Our resources and manpower were challenged, but we have been
    able to provide employment and support services to tens of thousands of
    our neighbors who had nowhere else to turn. And we were able to do that
    only because of our commitment to technology and our ability to adapt
    it to situations for which we could not possibly prepare.
        Immediately after the storm, TWC stepped forward to spearhead a
    multi-state effort to process the massive number of Louisiana
    unemployment claims. We created a separate toll-free number for
    Louisiana callers that went into our UI Tele-Centers, and then were
    either handled by our Texas claims representatives or routed to other
    states that had volunteered to process claims. Our use of Voice Over
    Internet Protocol (or VoIP) in the Tele-Centers allowed us to route
    those calls to other states in a way that was seamless to the client.
    The caller didn't know they were speaking to someone from Rhode Island
    or Montana unless they picked up on the accents. The hotline we
    established received more than 2.6 million calls, of which Texas Tele-
    Center employees handled nearly half. We also helped Louisiana develop
    an Internet application for both regular and disaster unemployment that
    either their residents could fill out online or that our claims takers
    could do in our Tele-Centers. To date, Texas has processed nearly
    68,000 unemployment claims for Louisiana.
        On the workforce side, our local Workforce Boards established
    temporary workforce centers at the major hurricane shelters. These
    centers allowed evacuees to file for unemployment, receive career and
    professional counseling, conduct a job search, prepare a resume, and
    meet with prospective employers. Each of these centers had computers
    available, and we encouraged the job seekers to use WorkInTexas.com to
    identify opportunities for temporary and permanent employment. We also
    established voice mailboxes to which evacuees could call in and receive
    personalized job referrals. Our local boards also deployed five mobile
    workforce units--each equipped with computers and satellite Internet
    access--to assist with overflow at the larger centers and to provide
    services in communities with smaller shelter operations. These mobile
    units later served as temporary replacements for the Southeast Texas
    one-stop centers that were badly damaged by Hurricane Rita.
        We adapted WorkInTexas.com to allow Louisiana job seekers to
    indicate their evacuee status and to allow employers to indicate a
    preference to hire Katrina evacuees. And as the number of Louisiana
    residents registered on WorkInTexas.com surpassed 30,000, we partnered
    with the Louisiana Association of Business & Industry on an initiative
    to recruit workers to fill their members' critical labor shortages. Now
    we have Louisiana employers and Louisiana job seekers looking for and
    finding each other on WorkInTexas.com. We have also created a separate
    tracking system for these Louisiana job matches.
        At the Texas Workforce Commission, we have made the cultural shift
    and are steadfast believers in the power of technology to improve the
    quality of services we deliver Texans. The main lesson from our
    experience is that technology must be central to program design.
    Technology not only makes programs run more efficiently, but it allows
    for easier scalability--you can expand or shrink capacity based on
    demand with relatively limited costs. Related to that is the importance
    of VoIP. We gave the example for the Katrina calls, but when Hurricane
    Rita looked like it was headed for the southern tip of Texas, we had to
    make contingency plans to close our McAllen Tele-Center. In the old
    days, that would have presented a major disruption to our network, but
    with VoIP, we can instantly route the calls to our other five centers
    and continue with barely a hitch.
        Our agency has switched from a personal-service model (where you
    have to go to a person to get help) to a self-service model (where you
    can help yourself but also have the option to talk to someone if you
    need to). In the unemployment program, employers and job seekers can
    complete all their business electronically, if they choose. But if they
    want personal service, the staff in our workforce centers is available
    to assist them. More than 90 percent of our users are now accessing our
    services without having to go to a local office or stand in line. This
    maximizes our staff resources and allows us to invest less in bricks,
    mortar, and overhead, which, in turn, makes more of our limited
    resources available for direct services.
        Technology has helped us to integrate our various programs and
    provide a more comprehensive and coherent approach to helping people
    find work. Service integration has kept Texas on the leading edge of
    the workforce service delivery, and we believe that other states can
    achieve similar results if they are willing to abandon their old models
    and embrace technology and service integration.
        The last item I want to share with you is our recent rollout of the
    first online version of the Transition Assistance Program, which
    provides job-search assistance, employment services, labor market
    information and other forms of assistance to separating service members
    and their spouses during their transition into civilian life.
    Traditionally, this has been offered in the form of 2- to 3-day
    seminars, which we operate at 13 sites in conjunction with the U.S.
    Department of Defense. But TWC has now taken that material and
    developed a six-chapter, self-directed course that any service member
    or spouse can access at any time, from any computer, anywhere in the
    world. The eTAP program has already become extremely popular with
    service members, and is particularly important for the returning
    Reserves and National Guard.
        I appreciate the chance to share our story with you today, and I
    will look forward to answering any questions you might have.

        Chairman HERGER. Thank you very much, Ms. Rath, and we
    certainly appreciate the job you did in being so helpful during
    this tragic time we had. Now, Ms. Gautreau.

     STATEMENT OF MARKETA GARNER GAUTREAU, ASSISTANT SECRETARY OF
     COMMUNITY SERVICES, LOUISIANA DEPARTMENT OF SOCIAL SERVICES,
                         BATON ROUGE, LOUISIANA

        Ms. GAUTREAU. Thank you, Mr. Chairman, and Members, and
    thank you, Texas. I do not know what we would have done without
    this. I am Marketa Garner Gautreau, and I am the Assistant
    Secretary of the Office of Community Services, which houses the
    child welfare system in Louisiana. On behalf of my Governor,
    Ms. Blanco, I appreciate the opportunity to be here. I would
    like to talk about technology in the context of who we are in
    child welfare and what we did before the storm. We have 1,800
    employees that investigate about 35,000 allegations of child
    abuse and neglect each year. On any given day, I have 5,200 to
    5,400 children in foster care, 7,000 in subsidized adoption,
    and another 500 in the Young Adult Program, which is the
    program of foster children aging out of the system. We had a
    budget of $255 million before the storm. 60 percent of that is
    title IV-E eligible, which shows the very high penetration rate
    that we have.
        At the height of the storm, 73 percent of my foster care
    population evacuated. 2,000 children had to leave the Greater
    Orleans area. Another 500 had to evacuate yet less than a month
    later in Rita. The Department of Social Services in Louisiana
    is charged with staffing shelters. Our of my 1,800 employees,
    600 evaluated in the first hurricane. 900 of them went to work
    in shelters for 1 month. 600 stayed for the next 6 weeks. Our
    workforce was very, very impacted by the storm. Our highest
    priority was finding those 2,000 children, and then, of course,
    we had those famous missing children that you heard so much
    about in the national media, the thousands of Katrina orphans
    supposedly that were floating around somewhere in Louisiana.
    Those were the first things that happened.
        In technology, I am not a technology expert, but I want to
    tell you what didn't work. What didn't work was that I had no
    capacity to reach my staff in real time. Cell phones were down.
    Land lines were down. Technologies that we had always relied on
    were not available to us. There was no accurate real-time data
    to track these children where they were and where they were
    going and how they were getting there. I needed geo-mapping so
    I could track people and find out if they were in Texas or
    Washington or Minnesota. We didn't have any of that.
        The main technology lessons that we learned from Rita is
    that the traditional systems failed. Cell phone towers were
    down. Land lines were down. Blackberries worked, but
    unfortunately, the Department of Social Services doesn't staff
    every single one of our 1,800 child welfare workers with
    Blackberries. We needed policies and procedures in place in our
    registration sites and shelters that were uniform and
    systematic. We used paper registration. Red Cross used a
    different form. Different State agencies used different forms,
    and so nobody matched and nobody knew where anybody was when we
    tried to call a shelter across town to find a child. Those need
    to be standardized. That needs to be done by technology and not
    by paper. We needed centralized reporting outside of the
    affected area, call centers that would not be blown away by the
    winds. Finally, we recognize very clearly that paper is no
    match for a Category three, and the records, the precious life
    books of our foster care children and their case files, and the
    court documents that were lost in Katrina will take us forever
    to replace and to redocument.
        The other issues that we dealt with that the Federal
    Government could help us with are very clear to me. First of
    all, our Children's Bureau was hampered greatly by the lack of
    authority to waive, extend or otherwise adjust Federal
    reporting. Under the Child and Family Service Review, we are
    evaluated on the major metro area, which became the smallest
    metro area in the State, and there was a report due September
    1st. If you remember, Katrina struck August 29th. It was a
    little difficult for us to try to meet the Federal requirements
    of a form to fill out that many days after the storm, and yet
    there was no ability for the Bureau to waive that requirement.
    Child welfare workers are not deemed emergency responders, and
    that hampered us in our work tremendously. We did not have the
    same priority for housing, for offices, or for communication
    systems that other first responders had, and yet, we were on
    the frontline looking for those children, trying desperately to
    reunite them with their families. We need a new way for rapid
    distribution of supplemental funds. We are extremely grateful
    for the 220 million that just came into Louisiana, but it came
    7 months after the storm. We needed that money faster than
    that. I believe that Congress can help us with that. I believe
    that the SSBG is money that is absolutely critical, and title
    IV-E money is absolutely critical to the State, and we must
    address those issues at this level. Thank you, and I will be
    glad to answer questions later.
        [The prepared statement of Ms. Gautreau follows:]

        Statement of Marketa Gautreau, Assistant Secretary of Community
        Services, Louisiana Department Of Social Services, Baton Rouge,
                                   Louisiana

        Mr. Chairman and Members of the committee, my name is Marketa
    Garner Gautreau and I am the Assistant Secretary of Louisiana's
    Department of Social Services (DSS). On behalf of Governor Kathleen
    Babineaux Blanco and that state of Louisiana, I thank you for the
    opportunity to be here. I am responsible for DSS' Office of Community
    Services (OCS) which administers our state's child welfare system. We
    investigate allegations of child abuse and neglect, provide prevention
    services, place children in foster care and residential services, and
    help children achieve permanency as quickly as possible--by
    reunification with their birth families, adoption, or placement in
    independent living.
        OCS handles about 35,000 allegations of abuse and neglect a year
    and has roughly 5,400 children in care at any point in time. Under the
    best of circumstances, ours is difficult and challenging work. Roughly
    1,800 staff care for children who have lived through traumatic
    situations. Dealing with displaced and disrupted families is our stock
    and trade on a daily basis--the aftermath of Hurricanes Katrina and
    Rita forced us to cope with these issues on a much broader and more
    urgent scale, but it remained work with which we are intimately
    familiar.
        I consider myself an advocate for children who has entered public
    service to further their interests. I am not an information technology
    specialist. But as head of a $250 million state human services agency,
    I can easily define what I need from technology as a routine matter. I
    need:

          The ability to reach my subordinates and field staff (and
    for them to reach me) 24/7.
          Accurate, real time information about the status of abuse
    allegations.
          Accurate real time contact information for our children,
    their foster parents, birth parents and other caregivers.
          Reliable data on our costs.
          Historical information about caseload, services, child
    outcomes, staffing, and other operational issues.
          Geo-based mapping so that we can track the physical
    location of our population and analyze the nature of abuse and neglect
    by area.
          Excellent management reports to allow us to be strategic
    as well as tactical in making program and policy decisions.

        DSS is the agency responsible (under the state's emergency
    management plan) for operating special needs shelters for children, the
    elderly and the disabled during natural disasters or other emergencies.
    These situations require special communications technology as well as
    information systems that can handle evacuee registration and tracking,
    rapidly dispense emergency aid and ensure that there are central data
    collection and reporting centers so that separated families can make
    contact and have a better chance for rapid reunification.
        Louisiana's existing technology systems are not adequate to fully
    meet our day to day needs or support ``typical emergencies'' (average
    storms with shelter needs of a few hours to a few days) let alone the
    massive crises created by Katrina and Rita.
        On a day-to-day basis we do not yet have a real time case tacking
    and management system. While I can generally rely on phones and e-mail
    for 24/7 communication with the field, we remain very weak in
    management reporting, cost analysis and currently have no geo-based
    technology available. In emergencies these weaknesses are magnified.
    The most important lessons we have learned about technology from the
    Katrina/Rita experience are:

        1.  Land-lines, traditional cell phones, and e-mail and other web-
    based communications, cannot be relied on during a large scale natural
    disaster. The only reliable communication we had between the central
    office and the field staff in affected areas was through wireless text
    messaging using PDA devices. A very small percentage of OCS and DSS
    staff have access to such devices as that technology is expensive and
    generally considered non-essential for all levels of staff. This
    severely hampered our ability to know where staff or clients were or to
    respond quickly where staff, materials, or other resources were most
    needed.
        2.  Systematic registration and tracking of evacuees is essential
    if families are to be kept together, highest need people appropriately
    triaged, and missing persons reunited as quickly as possible. No common
    procedure existed between the public special needs shelters and
    privately operated regular shelters (e.g., Red Cross, church-based) for
    registering evacuees and few lap-top based or other technology was
    available to manage this process.
        3.  Existing legacy systems used for child welfare caseload
    management are not sufficiently accurate or timely to be relied upon in
    an emergency as a source for contact information and child status.
    There can be lag-times of a few days to several weeks in entering new
    information about birth parents, child placement, investigation status,
    and related contact information. Individual social workers almost
    always have timely information about all cases in their care. But the
    data may not get entered into our systems as it is difficult and time
    consuming to do and there is no reporting capacity from the system that
    makes any individual worker's job better. As a consequence, the most
    accurate information is sometimes off-line, in the caseworker's
    possession. It works reasonably well under normal circumstances. But in
    an emergency of the scale of Katrina and Rita--when as many as 600 of
    our 1800 staff (and virtually all of the staff in the affected areas)
    were themselves missing or out of communication--it makes the ability
    to ``find'' our children extremely difficult.
        4.  Paper record keeping is simply not tenable in this day and age
    in weather emergency prone areas. We had whole offices where all of the
    case records were totally destroyed. The history of the child's care,
    records of legal status, treatment related information, and similar
    critical information about a child's history were permanently lost.

        To be fully prepared in a new emergency situation, we need wide
    spread wireless messaging capability; policies, procedures and systems
    support for the management of evacuee populations that is shared
    between federal, state and local agencies and among and between public
    and private non-profit shelter providers; better core systems so that
    we can centrally access accurate, real-time contact and status
    information about our clients; and electronic record keeping with back-
    up in areas unlikely to be affected by natural disasters.
        To prepare for the upcoming hurricane season, our Department is
    currently planning to test a product this season in a limited number of
    locations that can scan drivers' licenses or ID's and can issue a bar
    coded wristband allowing for registration. It has the ability to link
    families to a head of household that could be used to match child to
    parent should they become separated. The system is web based and all
    updates are back to a central database so that all sites have access to
    the same information. This kind of registration solution would be most
    helpful in tracking people from evacuation points to shelter or other
    sites to meet their needs.
        The best solution of course would be that all agencies responsible
    for shelter registration could use compatible systems so that
    information can be shared. Legislation allowing the sharing of
    information may be appropriate since privacy issues in the sharing of
    data such as shelter registrations, may arise as they did in the post
    Katrina event when thousands were missing and being sought by family
    members.
        An imaging solution is being planned for areas below Interstate 10,
    the areas most prone to hurricane damage. This would allow the
    Department to reestablish an office virtually anywhere else in the
    state and have full access to the case file and proceed with needed
    services base on the facts of the case history. This information can be
    made available via the web for both front line workers and management.
        I'd like to share some of the other issues that have emerged in the
    aftermath of Katrina and Rita--particularly as they relate to OCS and
    its interaction with the Federal government.

          The Federal Administration of Children and Families (ACF)
    has been very supportive since the storms but their ability to be
    helpful has been constrained by lack of authority to waive, change, or
    amend Federal program rules and requirements in emergency situations.
    We have been mutually frustrated by the lack of authority to waive
    reporting requirements and submission deadlines that result in
    financial penalties--or waive the penalties themselves for programs
    such as:

            ASFA
            Title IVE (eligibility documentation requirements)
            CFSR Program Improvement Plan
            Title IVE Program Improvement Plan
            Child and Family State Plan

        In lieu of simply being able to waive penalties and requirements,
    the Children's Bureau staff worked tirelessly with our state to re-
    write the CFSR Program Improvement Plan and are to be commended for
    their efforts to lessen the impact of the original plan for the state
    of Louisiana.

          A second problem involves the timeliness of supplemental
    funding for emergency needs of children in custody. Our population has
    special housing, clothing, transportation and medical needs. While we
    now have supplemental social services block grant funding to cover some
    of the extraordinary expenses being incurred post-storms, that funding
    took more than seven months to be authorized and received. Certain
    other expenses--such as the transportation costs for caseworkers to
    visit children in out-of-state settings--have not been deemed storm
    related by FEMA and may not be reimbursed. These visits are court-
    ordered and generally cannot be done by substitute staff in other
    jurisdictions.
          Child welfare workers are not deemed ``first responders''
    or critical staff under most Federal emergency programs. Consequently,
    they have not been high on the priority lists for temporary housing or
    other access related resources. The ability to get offices in the
    affected areas back up and running has been severely constrained by the
    lack of staff housing.
          The ability to meet matching requirements for federal
    programs has been severely affected by the magnitude of the state's
    fiscal crisis. In some cases Federal dollars will have to be forgone
    even when they are many multiples of the state match required simply
    because of the lack of state general funds.

        Based on our experience the past six months, Federal oversight
    agencies for child welfare are very constrained in their ability to
    waive, except, or otherwise amend reporting, penalties, matching and
    other compliance requirements when an extraordinary emergency has
    occurred. While we hope America never has to witness a dislocation on
    the scale of the New Orleans and Lake Charles devastation again,
    responsible leadership demands that we all plan for such circumstances.
    That planning needs to recognize that abused and neglected children,
    their foster parents and caregivers--and the public agencies
    responsible for their care--need special support in times of emergency
    in order to avoid further trauma to these children.
        I believe the funding issues Congress can address are clear:
        Child welfare agencies responsible for the care, custody, and
    safety of minor children need immediate response to disasters of this
    magnitude. Louisiana did receive supplemental emergency funds through
    the Social Services Block Grant--seven months after the disaster. This
    was the first and only supplemental child welfare funding received to
    date.
        The Budget Reconciliation Act resulted in a projected reduction in
    Title IVE benefits for LA for an estimated $3.5 million. Reducing our
    ability to claim IVE reduces the basic services we are able to provide
    children and families in our care.
        There are on-going discussions to cap the Title IVE entitlement
    program. Title IVE is the only uncapped revenue for the child welfare
    population and maintenance and administrative costs increase each year.
    Capping that program severely impacts every state's child welfare
    agency in their ability to provide the most basic services.
        There are also efforts to cut the Social Services Block Grant--
    funds that are used entirely for child welfare in Louisiana. I would
    like to advocate for the current level of SSBG funding to states remain
    unchanged. Recent budget proposals included $7M reduction which for LA
    would be almost 30% of total SSBG.
        Because our children in foster care are among the most vulnerable
    and have complex mental health issues, I also ask that you consider
    promoting legislation that would designate a percentage of mental
    health/Medicaid funds to child welfare clients. This would help
    prioritize the services for these children.
        In closing, I would like to ask the committee to consider support
    of prevention funding for child welfare. Because of funding
    limitations, most child welfare systems focus on response once abuse
    and neglect has happened and children are in the state's custody. We
    believe that investments in prevention would help stabilize families
    before tragedies occur. I strongly support an expansion of funding
    opportunities for states to move toward more prevention focused child
    welfare system. (However not at the expense of entitlement programs
    such as IVE.)
        I am happy to answer any questions about the Louisiana experience
    and will be happy to work with the committee and its staff as you
    address issues of technology and human services administration and
    consider special needs for child welfare management in large-scale
    emergencies.

        Chairman HERGER. Thank you. Don Winstead, Deputy Secretary
    of the Florida Department of Children and Families, from
    Tallahassee, Florida. Mr. Winstead.

    STATEMENT OF DON WINSTEAD, DEPUTY SECRETARY, FLORIDA DEPARTMENT
             OF CHILDREN AND FAMILIES, TALLAHASSEE, FLORIDA

        Mr. WINSTEAD. Mr. Chairman, Mr. McDermott, Members of the
    Committee, I am pleased to be here today to discuss the use of
    technology to improve public benefit programs. I am Don
    Winstead, Deputy Secretary of the DCF. We are the State agency
    in Florida that, among other programs, is responsible for
    determining eligibility for benefit programs including
    Temporary Assistance for Needy Families (TANF), food stamps,
    and Medicaid.
        Mr. Chairman, the world of customer service has changed.
    When I flew to Washington for this hearing, I traveled on an
    electronic ticket purchased online. At the airport I checked
    myself in the computer terminal, and printed out my boarding
    pass. Although there were a few employees there to assist if I
    needed help, I was able to manage the process pretty
    efficiently. In Florida, we have been using many of the same
    technologies used in airports, retail outlets and other
    businesses to improve customer service, while decreasing cost
    and improving effectiveness. We call our business model ACCESS
    FLORIDA. Let me contrast how ACCESS FLORIDA works compared with
    traditional public benefit approaches. As you said, Mr.
    Chairman, in the old, traditional public benefit model, people
    apply at agency offices. They fill out a lengthy paper
    application, spend an inordinate amount of time waiting--
    probably in an uncomfortable blue plastic chair--and then go
    through an extensive interview and provide additional
    information to verify key items.
        In Florida, in contrast, families needing help can apply
    anywhere, anytime, using ACCESS FLORIDA, our Web application.
    Customers enter their own information. While people may apply
    from computers anywhere that can access the Web, they also can
    go to a wide variety of other sites. In addition to our
    offices, the ACCESS FLORIDA program includes over 2,500
    community partner sites around the State. Partner sites include
    Workforce One-Stops, community centers, health clinics,
    hospitals, homeless service centers, domestic violence
    shelters, public libraries, faith-based and community-based
    organizations, and on and on. My written statement describes
    the process, and I have attached some copies of some of our
    computer screens to give you a better idea of what the customer
    sees. Part of the process is when our eligibility staff review
    the Web application. They are assisted by a process the
    technology folks call ``data streaming.'' As an old public
    assistance worker, I call it ``magic.''
        The Web application flows the information at lightning
    speed into our legacy computer system, pausing when necessary
    for the eligibility worker to make decisions or authorize
    benefits. This minimizes duplicate data entry and greatly
    improves efficiency. Our agency staff have also constructed a
    Web-based document imaging system to better manage information.
    statewide implementation is underway and will result in the
    electronic storage of 1.25 million records with $4.5 million in
    annual savings. Savings have already more than paid for the
    equipment necessary and have produced a net gain to the State.
    So far, our other results have been remarkable. Since 2002, we
    have reduced positions from 7,200 to less than 4,200 today that
    are filled, and our target is 4,109 positions by June 30. This
    is over a 40-percent reduction in staff; at the same time, our
    workload has increased by over 20 percent. We have gone from
    about 1.9 million recipients unduplicated in July 2002 to about
    2.3 million today. Since inception, ACCESS FLORIDA
    implementation has reduced costs to taxpayers over $83 million.
        Since we implemented the Web application in 2005, the
    acceptance and use by Floridians has been astounding. In
    February, 77 percent of our applications for public assistance
    were e-signed Web applications. Of the Web applications, over
    half came via the Internet rather than the intranet. This means
    that over half came through home computers or computers in
    partner sites rather than computers in our offices. High
    utilization is one measure of acceptance. In addition, we ask
    customers to complete a customer satisfaction survey at the
    conclusion of the application process. The last page attached
    to my written statement gives you a recap of the results.
    Importantly, 90 percent of the respondents said they would use
    the application again. In conclusion, we say that ACCESS
    FLORIDA is supported by technology and powered by partnerships.
    DCF staff have transformed customer services in Florida.
    Working with thousands of community-based partners, we have
    improved access, increased efficiency, reduced costs, and
    improved performance. Mr. Chairman, we are far from finished. I
    appreciate the opportunity to testify today and provide the
    Committee with information about ACCESS FLORIDA, and I would be
    happy to respond to any questions.
        [The prepared statement of Mr. Winstead follows:]

      Statement of Don Winstead, Deputy Secretary, Florida Department of
                  Children and Families, Tallahassee, Florida

        Mr. Chairman, Mr. McDermott, and Members of the Committee, I am
    pleased to appear before you to discuss the use of technology to
    improve public benefit programs. My name is Don Winstead. I am Deputy
    Secretary of the Florida Department of Children and Families (DCF). DCF
    is the state agency in Florida responsible for determining eligibility
    for public benefit programs including Temporary Assistance for Needy
    Families (TANF), Food Stamps and Medicaid.
        Mr. Chairman, the world of customer service has changed. When I
    flew to Washington for this hearing, I traveled on an electronic
    ticket, purchased on-line. When I arrived at the airport, I checked
    myself in at a computer terminal and printed out my boarding pass.
    Although there were a few employees there to assist if I needed help, I
    was able to navigate the process easily and efficiently.
        In Florida, we are using many of the same technologies used in
    airports, retail outlets and many other businesses to improve customer
    service while decreasing cost and improving effectiveness. We call our
    business model, ACCESS FLORIDA. Let me contrast how ACCESS FLORIDA
    works compared with traditional public benefit approaches.
        In the old, traditional public benefit model, people apply at
    agency offices. They generally fill out a lengthy paper application,
    spend an inordinate amount of time waiting to be interviewed--probably
    in an uncomfortable, blue plastic chair--go through an extensive
    interview and provide additional information to verify key items. While
    the interview might be conducted with the aid of a computer terminal,
    the agency employee asks the questions and, based on the application
    and the information provided by the customer, goes through the tedious
    process of key-entering the information into the legacy computer
    system. At the end of the process, the family may be ultimately
    approved for benefits and issued an EBT card. We used to call this
    ``technology''.

    Our Focus: Customer Service
        In Florida, families needing help can now apply anywhere, anytime
    using the ACCESS FLORIDA web application. Customers enter their own
    information. While people may apply from any computer that can access
    the web, they also can go to a wide variety of other sites. In addition
    to our offices, the ACCESS FLORIDA program includes over 2,500
    community partner sites around the state. Partner sites include
    Workforce One-Stops, community centers, health clinics, hospitals,
    homeless service centers, domestic violence shelters, public libraries,
    faith-based and community-based organizations, and so on.
        At a community partner site, applicants can access a computer to
    apply or check on the status of a previous application, drop off or fax
    verification information to us, access a help-line telephone or get
    assistance in using the technology.
        Customers can also visit agency offices but they won't find the
    same process they did a few years ago. Today our lobbies have self-
    service computer terminals, greeters and helpers to answer questions or
    assist in the process, telephones to access help-lines and printers so
    that applicants can print out copies of information they have
    submitted. Plastic chairs are being replaced by upholstery and seating
    areas have been redesigned to reflect a more professional environment.
        To improve customer service, call center agents are available by
    toll free number. We have three customer call centers, in Jacksonville,
    Tampa and Miami with over 500 employees to assist customers. In
    addition we have developed telephone and web based automated response
    units, so that people can find out key information about the status of
    their application or review without needing to talk to a live agent.
        When customers enter information into the web application, the
    information is reviewed by eligibility staff. In some cases, people
    still will need to come into an office for a face-to-face interview and
    in other situations, needed information can be obtained by telephone,
    fax or mail. Full interviews are required in complex or error-prone
    situations. These cases are called ``red track'' and require more
    detailed review. Simpler and less error-prone situations are designated
    ``green track'' and simplified or abbreviated processes can be used. Of
    course, if the applicant is applying for temporary cash assistance and
    is required to participate in work activities, he or she will have to
    go into one of our Workforce One-Stop centers.
        When our eligibility staff review the web application, they are
    assisted by an automated process the technology folks call ``data
    streaming.'' As an old public assistance worker, I call it ``magic.''
    The web application flows the information at lightning speed into our
    legacy computer system, pausing when necessary for the eligibility
    worker to make decisions or authorize benefits. This process minimizes
    duplicate data entry and greatly contributes to the efficiency of the
    process. Soon customers will also be able to report a change in their
    circumstances via the internet.

    Solutions: Staff-Driven Initiatives
        Another important part of the process is document imaging. Our
    agency staff have constructed a web-based document management system to
    which commercially available scanning devices can connect. These
    devices permit documents to be digitized and indexed so that the
    information is available to eligibility staff using our secure network
    anywhere in the state. There are no imaging software costs associated
    with the scanning since the software application was developed by
    agency employees in our Tampa Bay region.
        The Tampa Bay region designed, created, and implemented this
    comprehensive electronic filing system for the storage and retrieval of
    the region's 190,000 public assistance case files. After trial and
    error with different models, the scanning equipment vendor secured a
    new machine (Ricoh IS760D) that had not previously been available in
    the United States. The first machine released in the U. S. was shipped
    directly from the manufacturer so the Tampa Bay region could use it for
    this project. The scanner performs high speed tray-fed images of
    approximately 100 pages per minute. This enterprise solution, along
    with the software written by agency staff, has been implemented region-
    wide and is currently being adopted statewide. This system improves
    security and accessibility to case information yet eliminates costs
    associated with the creation, maintenance, location and retrieval of
    paper case files. In the pilot region, this technology saved $270,000
    in the first year and is projected to save $930,000 over the next three
    years. Statewide implementation will result in the electronic storage
    of approximately 1.25 million records and nearly $4.5 million in annual
    savings. Savings more than paid for the equipment necessary for
    implementation, resulting in a net gain to the State.
        Recent and planned refinements to our technology include use of
    ``screen scraper'' technology in our call centers so that key
    information from multiple computer screens is collected in one place so
    that call center agents can see the most relevant data for a family
    without needing to scroll through multiple computer screens. This
    speeds customer response and reduces call wait time. We are working on
    additional innovations, such as speech interactive capability to make
    more information and services available by telephone and through the
    web.

    Results So Far: Remarkable
        So far, the results have been remarkable. In 2002, we had slightly
    over 7,200 positions in our Economic Self-Sufficiency program. Right
    now, we have about 4,173 filled positions with a target of 4,109 by
    June 30, 2006. This means we will have over a 40 percent reduction in
    staff over this period of time. At the same time, our workload has
    increased over 20 percent. We had about 1.9 million public assistance
    clients in July 2002. Now we have about 2.3 million. Since inception,
    we have reduced costs to taxpayers over $83 million.
        While the TANF caseload has continued to decline, the food stamp
    and Medicaid caseloads have continued to increase. Like in the TANF
    program, the majority of the adults in these families are employed and
    are receiving benefits or health coverage to supplement their earnings.
    Those who are not employed or elderly are most likely to be disabled. A
    key benefit of our model is that it is consistent with program goals
    that emphasize work.
        Since we implemented the web application in mid 2005, the
    acceptance and use by Floridians has been astounding. In February, 77%
    of our applications for public assistance were e-signed, web
    applications. Of the web applications, over half came via the internet
    rather than the intranet. This means that over half came through home
    computers or computers in partner sites rather than from our offices.
        High utilization is one measure of acceptance. In addition, we ask
    customers to complete a customer satisfaction survey at the conclusion
    of the application process. In February 2006, 73 percent of respondents
    said they were able to complete the application without help. 57
    percent said it took less than thirty minutes to complete the
    application with only 14% saying it took over an hour. 52 percent found
    the process easy and 87 percent rated the experience either easy or
    fairly easy. Importantly, 90 percent told us they would use the web
    application again.
        We say that ACCESS FLORIDA is supported by technology and powered
    by partnerships. Working with our thousands of community-based partners
    we have improved access, increased efficiency, reduced costs and
    improved performance. And Mr. Chairman, we are far from finished.

    Background: How We Got Here
        Important to the development of the model was the direction of the
    Florida Legislature. The 2003 General Appropriations Act included
    proviso language requiring the department to develop a plan to
    outsource public assistance eligibility functions or to develop
    alternative service delivery and administrative approaches to achieve
    greater efficiency in these functions. Ultimately, in 2004, a detailed
    business case was developed showing an outsourced option and an in-
    sourced option. The in-sourced option included development of community
    partnerships while retaining core eligibility functions being performed
    by agency employees.
        Governor Bush examined the alternatives and on January 12, 2005
    decided that Florida would pursue the in-sourced option.
        The other important factor in the development of ACCESS FLORIDA,
    was the hurricane season of 2004. That summer, visitors to Florida
    included Charley, Frances, Ivan and Jean, in rapid succession. To serve
    the affected citizens in our state, Florida had to implement a Disaster
    Food Stamp Program of unprecedented volume. The ``Food for Florida''
    program was begun, but we were rapidly overwhelmed by applications. We
    quickly had tens of thousands of paper applications, far beyond our
    capacity to process. We needed an automated solution, and we needed it
    fast. Over the course of 72 hours, agency staff developed a prototype
    web application. We took paper applications at sites in affected
    counties and shipped them to back room processing centers outside the
    disaster areas where staff fed the information into the web application
    for processing.
        Two things emerged from this experience. First, the Food for
    Florida program provided desperately needed help to over 2 million
    Floridians. Secondly, the agency staff came out of the experience
    feeling like they could do just about anything. Since then, history has
    proved them right.
        The hurricane season of 2005 gave us more opportunity for learning.
    We used streamlined procedures from 2004 when Hurricane Dennis slammed
    into the Florida panhandle last July. We added functions to our web
    applications to provide simplified access to special food stamp, TANF
    and Medicaid benefits for Katrina evacuees from Alabama, Mississippi
    and Louisiana. Finally, Hurricane Wilma brought devastating power
    outages and damage to some of the most populated areas of our state.
    Again, our Food for Florida program was able to help about 3 million
    Floridians in addition to our guests from other Gulf states.

    Future Developments
        During this past year, we have focused on reengineering two of our
    three major business processes: applications and reported changes.
    During the coming year, we plan to reengineer the third process,
    complete redeterminations. We will continue to move towards a system
    where customers will manage their accounts on-line. This will be
    accomplished through a web-based system which has conversational
    functionality with our legacy system.
        We will be continuing to improve our processes in anticipation of
    the 2006 Hurricane season. We are looking at new ways to pre-register
    applicants to reduce the large crowds at disaster sites. We are
    examining use of point of sale devices to speed issuance of benefits
    and also to provide access to Florida's drivers' license database to
    improve verification of identity. As in the past, we plan to move the
    disaster-related innovations into the mainstream program. Using data
    matches to automate verification of identity and citizenship and using
    card swipe technology to access case files are part of this plan.
        To help illustrate how ACCESS FLORIDA works, I have attached copies
    of several computer screens to this testimony. Below is a list of
    attachments. A brief explanatory comment is shown at the top of each
    page. These selected screens do not, however, tell the full story. I
    invite any Member of the Committee to browse through the information on
    our web site to see the system for yourself. The easiest way to access
    the information is to go to the state's web portal, www.myflorida.com.
    Select the tab, ``Find an Agency'' and click your way to the Department
    of Children and Families home page and from there to the ACCESS FLORIDA
    link. You can see the web application, get further information about
    partner sites, and find our offices by county or zip code.
        While at our web site, I would invite you to also check out our
    ``Performance Dashboard''. You, along with every citizen of Florida,
    can monitor our performance on a variety of measures. You can check how
    we're doing with application processing standards and dozens of other
    metrics. Our goal is to measure key performance indicators and, not
    only make ourselves accountable for results, but be entirely
    transparent in the process.
        Supported by technology and powered by community partnerships, our
    staff has transformed customer services in Florida. Mr. Chairman, I
    appreciate the opportunity to testify today and provide the Committee
    with information about ACCESS FLORIDA. I would be happy to respond to
    any questions.
                                     ______

    Attachments
    Attachment #1--Welcome Screen (page 6).
    Attachment #2--Start Screen (page 7).
    Attachment #3--Benefit Information (page 8).
    Attachment #4--Household List (page 9).
    Attachment #5--Common Application Form and Eligibility Survey (page
    10).
    Attachment #6--ACCESS Online Survey (page 11).
    Attachment #7--Survey Results (page 12).
    Attachment #1--Welcome Screen
        This welcome screen permits the customer to select a language and
    provides introductory information.
    [GRAPHIC] [TIFF OMITTED] T0442A.001

    Attachment #2--Start Screen

        This screen starts the application process. Note that both
    screen-level and item-level help are available.
    [GRAPHIC] [TIFF OMITTED] T0442A.002

    Attachment #3--Benefit Information

        This screen permits the applicant to designate for whom he
    or she is applying and the benefits applied for. Some
    combinations of choices will activate additional drop-down
    options.
    [GRAPHIC] [TIFF OMITTED] T0442A.003

    Attachment #4--Household List

        This screen shows an example of screen with customer-
    entered information. The tabs across the top show progress in
    the application process. By clicking on the ``Save and Quit''
    button, the applicant can return later to finish the
    application
    [GRAPHIC] [TIFF OMITTED] T0442A.004

    Attachment #5--Common Application Form

        Information from the web screens is placed on the common
    application form. The applicant can review all the information
    submitted and can print out a copy for her records.
    [GRAPHIC] [TIFF OMITTED] T0442A.005

    Attachment #6--ACCESS Online Survey

        This screen provides customer feedback on the web
    application process.
    [GRAPHIC] [TIFF OMITTED] T0442A.006

    Attachment #7--Survey Results

        These graphs summarize key data from the customer survey
    for February 2006
    [GRAPHIC] [TIFF OMITTED] T0442A.007

        Chairman HERGER. Thank you. Ms. Henley to testify.

       STATEMENT OF LISA HENLEY, PROJECT DIRECTOR, OKLAHOMA EBT
    PROJECT, OKLAHOMA DEPARTMENT OF HUMAN SERVICES, OKLAHOMA CITY,
                                OKLAHOMA

        Ms. HENLEY. Thank you, Mr. Chairman and Members, for having
    Oklahoma in today to talk to you about our electronic benefit
    services for child care. The Oklahoma Department of Human
    Services began implementing an Electronic Benefit Transfer
    (EBT) child care system in fiscal year 2000. The factors that
    led to our decision to put child care on an EBT card were
    simple. We needed to reduce overpayments, whether those were
    done inadvertently because of the cumbersome paper process or
    were intentional overpayments by providers claiming for
    services that had not been rendered. We wanted to improve the
    quality of child care received by eliminating and reducing the
    paperwork required by providers to complete each month. We
    wanted to ensure that all participants in the system were
    accountable, including our staff, the providers, and our
    clients. We wanted to improve cash flow for our providers. In
    the current paper system, providers were paid on a monthly
    basis. We needed to get parents involved in child care. They
    needed to get into the centers and homes and see what was going
    on with their child care providers and their children. We
    wanted to reduce administrative costs.
        Did we accomplish these goals? Our system has been in
    effect now for 3 years and operates like a dream. Overpayments
    have been reduced by 10 percent. In Oklahoma, that is a $10
    million saving. Those savings have been put back into the
    quality program, which affects all of Oklahoma's kids.
    Everybody benefits. Providers no longer complete paper claims
    unless they have been granted an exception. We have
    approximately 47,000 kids in the program. We do fewer than 50
    claims per month. Our staff have 2 working days to either
    approve or deny services, and we actually accomplish that in
    Oklahoma in 1.4 days. Parents are responsible for payment to
    providers for services if they fail to swipe their cards. Child
    care benefits are linked to their food stamp and TANF cards,
    which ensures or we hope ensures that parents will not be
    leaving their cards at a provider's location. Providers know
    that the first swipe of every day if the child is approved for
    services, the co-pay amount that is to be paid by the parent,
    and the part-time and full-time rates that the provider will be
    paid for rendering those services.
        Providers are paid weekly now, 2 weeks in arrears, all via
    direct deposit. There are no paper checks given. Liquidated
    damages are applied to any providers who are found in receipt
    of a card. The parents must swipe in accordance with the child
    care facility's requirements. They must at the very least
    conduct swipes once every 10 days. We have eliminated eight
    staff, and we no longer mail monthly claim forms or warrants.
    The child care EBT system by itself has not produced
    significant savings. It has been in association with the
    agency's policy changes that we have really seen some cost
    savings. The two together are a strong and powerful tool for
    reducing costs and putting those funds back in to improved
    quality child care. Thank you.
        [The prepared statement of Ms. Henley follows:]

    Statement of Lisa Henley, Project Director of the Oklahoma EBT Project,
         Oklahoma Department of Human Services, Oklahoma City, Oklahoma

    OKDHS Electronic Benefits and Child Care Subsidy Fact Sheet--State
            Fiscal Year 2005

    The Program
        The Child Care Subsidy pays for part or all of childcare costs
    while parents or caretakers work, job search, attend school or receive
    training. Childcare services may also be provided as part of a
    protective service plan to prevent abuse, neglect or exploitation. The
    subsidy is paid directly to the childcare provider on the family's
    behalf. The family may have a co-payment for the childcare based on
    their income, the number of family members and the number of family
    members needing services.

    Vendors and Rates
        The OKDHS Rates Schedule (OKDHS Appendix C-4), available at http://
    www.policy.okdhs.org/home/, presents the payment tables listed with a
    variety of determining factors. Payment is scaled and tiered based on
    the age of the child, the county in which the vendor is located
    (standard and metropolitan market rates), the care setting (center or
    home), the quality of the provider and the type of authorization.
    Authorization type, such as part-time care, full-time care or special
    needs care is determined during the eligibility process.
        All childcare providers in the state of Oklahoma must meet the
    requirements to be licensed through the OKDHS Division of Child Care.
    Licensed providers are then able to request that Family Support
    Services Division execute a contract that allows their facility to
    receive payment for eligible clients through the subsidy program.

          Approximately 70 new contracts were opened each month and
    79 were closed

          5,103 contracts were in effect for some part of the
    fiscal year

    Child Care Quality--``Reaching for the Stars
        Oklahoma was the first state to successfully implement a tiered
    reimbursement program that helps childcare providers succeed and
    improve childcare quality. Called Reaching for the Stars, licensed
    childcare programs that meet quality criteria receive a higher Star
    rating and higher reimbursement rates for child care services.

          At the end of fiscal year 2005 nearly 94 percent of
    children supported by OKDHS Child Care Subsidy in childcare centers
    were in facilities rated higher quality as determined by independent
    raters.

    Eligibility System
        Prospective clients obtain an application for services from the
    county Human Services Center (there is at least one HSC in all Oklahoma
    counties), a childcare provider or online through www.okdhs.org/
    childcare. OKDHS Social Workers make an eligibility decision based on
    both need for services and financial status. The commitment is that an
    eligibility determination will be made within two working days of the
    receipt of a complete application packet, which consists of the
    application with accompanying verification documents. In SFY 2005 this
    timeliness goal was achieved on 88.5 percent of application approvals.
        Services are delivered by issuing an authorization that approves a
    specific child to attend a specific vendor for a number of days per
    month that is determined by service need. This authorization for care
    is processed in a statewide, real time and online system through the
    OKDHS Wide Area Network and an Electronic Benefits Transfer (EBT)
    application. Delivered care is recorded with magnetic cards produced by
    the HSC and Point of Sale (POS) devices that are present at each vendor
    location. This data is processed for a direct deposit payment on a
    weekly basis.

          Clients took an average of 9.1 days to complete the
    application packet, the eligibility decision was returned in an average
    of 1.4 working days
          Social Workers process an average of 5,160 approved
    authorizations per month

    Administration
        At the administrative level seven OKDHS divisions directly support
    operational aspects of the program. These divisions and their primary
    role are:

    Family Support Services Division     Eligibility Policy, Provider
                                          Contracting
    Division of Child Care               Provider Licensing and Quality
    Finance Division                     EBT and Payment Processing
    Field Operations Division            Eligibility Determination
    Office of Inspector General          Auditing and Program Integrity
    Data Services Division               Systems and Application Support

          Administrative or state-office level staff assigned full
    time to subsidy functions number approximately 20
          There are approximately 2,032 staff statewide devoted to
    eligibility determination and case management (these staff also perform
    the same function for a number of other programs including Food Stamps,
    Medicaid and Temporary Assistance for Needy Families)

        Electronic Benefit Services (EBT) Child Care
    The EBT System in Oklahoma
        The Oklahoma Department of Human Services began implementing
    Electronic Benefits for Child Care in 2000. Factors leading to our
    decision include--

          Reducing overpayments.
          Improving the quality of care received by eliminating/
    reducing the paperwork required by providers.
          Insuring OKDHS staff, providers and clients were
    accountable for the services provided.
          Improving cash flow for providers. Providers were paid
    monthly.
          Getting parents involved in their children's child care
    needs and environment.
          Reducing administrative costs.

        Did we accomplish these goals?

          Overpayments have been reduced by approx. 10%.
          Providers no longer complete paper claims unless they
    have been granted an exception (OKDHS pays fewer than 50 paper claims
    for exceptions per month).
          OKDHS staff have two (2) working days to either approve
    or deny eligibility.
          Parents are responsible for payment to providers if they
    fail to swipe when services are received.
          Child Care benefits are linked to the same card as Food
    Stamps and TANF making it less likely that parents will leave cards at
    a provider's facility.
          Providers know with the first swipe of each day if the
    child is approved for services, the copay amount to be paid by the
    parent and the part-time and full-time rates OKDHS will pay for that
    child.
          Providers are paid weekly, two weeks in arrears.
          Liquidated damages are charged to any provider found in
    receipt of a card.
          Parents must swipe in accordance with the Child Care
    facility requirements but must at least conduct swipes once every ten
    days.
          OKDHS has eliminated 8 FTE and no longer mails monthly
    claims forms or warrants.
    Brief Overview of the System
        Swipes can be conducted daily or within 10 days of the service or
    any combination thereof. Child Care facilities decide how swipes will
    be conducted with their facility. Parents can check in/out up to ten
    (10) children in a single swipe transaction. All members of a family
    are assigned ``person numbers'' and parents can conduct swipes for any
    combinations depending on which kids are in care on any given day. An
    example is listed below:

        Case #123456 has 3 children

          Swipe Card
          Enter PIN number
          Select choice on key pad of check in/out
          Enter child number
          Enter child number if applicable
          Enter child number if applicable
          Hit enter again which informs POS that parent has no more
    child numbers to enter
          System returns approved or denied message and prints info
    for each child checked in/out

        Providers can run daily exceptions reports that inform them of kids
    that are checked in but have not checked out. Detail weekly payment
    reports are printed on the POS terminal for providers with fewer than
    20 kids. Providers with more than 20 children receive a ``summary''
    report with detail provided by the OKDHS Provider website.
        Broadcast messages can be sent to individual providers, providers
    in a specific county or to all providers statewide. Caseworkers can
    also send individual messages to specific parents, which is printed
    when they swipe in.
        All swipes, whether approved or denied, can be seen by OKDHS staff.
    OKDHS staff can also determine how many subsidy kids are in care, at
    any given time, insuring Licensing requirements are being met.
        An Average Month
    Pre-Statewide Implementation

    Contracted Vendors                   4,805 (Childcare Centers and Family
                                          Childcare Homes)
    Children Receiving Services          46,870
    Pay for Services                     $11,673,304

          Services are delivered in all 77 of Oklahoma's counties
          $249.06 average per child
          Recipient families are responsible for approximately
    $1.58 million in co-pays
          There are approximately 27,570 recipient families
    Post-Statewide Implementation

    Contracted Vendors                   4,348 (Childcare Centers and Family
                                          Childcare Homes))
    Children Receiving Services          47,294
    Pay for Services                     $10,615,827

          Services are delivered in all 77 of Oklahoma's counties
          $224.46 average per child
          Recipient families are responsible for approximately
    $1.59 million in co-pays
          There are approximately 27,300 recipient families
    EBT and Policy
        Electronic Benefit systems by themselves do not affect significant
    cost savings. Cost savings are based on the policies implemented, in
    conjunction with EBT, by the States. OKDHS initially built the EBT
    system based on current policy and procedures and the system failed.
    The success of the system is attributed to a favorable political
    environment, the backing of leadership, improvements in county
    operations and our commitment to a successful system. Policy changes
    include:

          Two working days to approve or deny application
          No payment for failure to swipe unless a medical
    emergency prevents swiping
          Liquidated damages applied to any provider found in
    receipt of a card
          Cancellation of subsidy contract after three possessions
          Parent's must enter Child Care facility at least once
    every ten days
          Creation of new rates to facilitate swipe process
    System Costs
        The monthly Cost Per Case Month (CPCM) is $5.24 and includes:

          Call Center Operations--located in Sandy City, Utah
          Transaction Processing--Time and Attendance tracking
          Settlement to providers
          Reconciliation
          Card stock
          Embosser installation and maintenance
          POS installation and maintenance
          Training

        The average CPCM paid to the Contractor for above services is
    $247,993.48
        Original Contract Award (one-time funding)--$5.2m

     Design                      $378,067.11
     POS Terminals               $3,600,000.00
     Training                    $1,221,932.89

        The Department spent an additional $793,174.50 on enhancements
    during the life of the contract.

        Chairman HERGER. Thank you. Mr. Fecci to testify.

     STATEMENT OF DENNIS FECCI, FORMER CHIEF INFORMATION OFFICER,
      NEW YORK CITY HUMAN RESOURCES ADMINISTRATION, NEW YORK, NEW
                                  YORK

        Mr. FECCI. Mr. Chairman, Members of the Committee, my name
    is Dennis Fecci. I am former Deputy Commissioner and Chief
    Information Officer for New York City Human Resources
    Administration. I am here to talk to you today a little bit
    about external data matching for caseload integrity. Experience
    has shown us that many applicants and recipients supply
    information that is not accurate or current. By current, I mean
    that at the time of eligibility determination, the information
    was accurate, but changes in circumstances were not reported at
    all or not reported on a timely basis. A recent study in
    Indiana revealed that over 25 percent of the Medicaid
    recipients in long-term care had assets that were unknown to
    the State. We have seen that many States do not aggressively
    seek to externally verify information that is submitted by
    applicants and recipients. They depend on information supplied
    by the applicant or recipient and the documentation that they
    provide. We have also seen in New York and now in Indiana that
    it is possible to do a series of simple data matches to
    identify and correct critical information about the applicants
    and recipients. This results either in termination of the
    benefits or rebudgeting the case to the correct benefit levels.
        The process is very simple. The State eligibility database
    is matched against external databases using demographic keys.
    When a discrepancy is discovered, a letter is sent to the
    recipient requesting them to call in to discuss the
    discrepancy. They have 10 days to respond. If they do not
    respond within that 10-day period, another letter is sent to
    them stating the State's intent to close that cases. If there
    is no response within 10 days, the case is closed. If the
    client verifies the match, they are asked to submit
    documentation. When the documentation is received, the case is
    rebudgeted, and the rebudgeting could result in a reduction in
    benefits of closing of the case. Indiana has embarked on a
    program to utilize as much information technology as possible
    to assure that only truly eligible persons receive benefits.
        Starting on February 9, 2006, Indiana modified some data
    matches, sent over 20,000 discrepancy letters to recipients,
    and so far we expect that in about 36.5 percent of these cases
    there will be a reduction of benefits or a temporary or
    permanent termination of benefits. Indiana plans to pursue
    about 35 different matches, which I have listed in the written
    testimony. We found both in New York and in Indiana that
    obtaining access to the external data can be very difficult and
    time-consuming. Many organizations do not understand the legal
    privacy and confidentiality regulations and, therefore, are
    hesitant to share the information. We found that it takes many
    times longer to get the access to the information and the
    technical issues of actually programming the match and
    operationalizing the match. Thank you very much. I will be
    pleased to answer questions.
        [The prepared statement of Mr. Fecci follows:]

     Statement of Dennis Fecci, Former Chief Information Officer, New York
            City Human Resources Administration, New York, New York

    External Data Matching for Caseload Integrity
          Experience has shown us that many applicants and
    recipients supply information that is not accurate or current. For
    example, a recent study in Indiana revealed that over 25% of Medicaid
    recipients in long term care had assets that were unknown to the state.
          Many states do not aggressively seek to externally verify
    information submitted by applicants and recipients.
          It is possible, using simple data matches, to identify
    and correct critical information that states have about applicants and
    recipients either terminating the ineligible or rebudgeting the case to
    the correct benefit grant levels.
          Typical data matches seek: undisclosed assets; new
    employment; private medical benefits; actual addresses/living
    arrangements; etc.
          Indiana is embarking on a program to utilize information
    technology to assure that only truly eligible persons receive benefits.
          Starting on February 9, 2006 Indiana modified an existing
    data match alert relating to new employment of recipients and has sent
    over 20,000 information discrepancy letters to those recipients. In
    approximately 36.5% of these cases, this process has (will) resulted
    in:

            Reduction of benefits
            Temporary termination of benefits
            Permanent termination of benefits

          Indiana Plans to pursue the following external Data
    Matches:

            Bank Match
            Bureau of Motor Vehicles Match
            Casino Winnings Match
            Child Care Employment Match
            County Employment Match
            Credit Bureau Match
            Home Attendant employment Match
            Hoosier Lottery Match
            Identity Unduplication Match
            Inheritance Match
            Insurance Award Match
            Medicare Eligible 65+ Match
            National Fleeing Felon Match
            National New hire Match
            Neighboring States Public Benefits Match
            Outstanding Warrants Match
            Personal Injury Awards Match
            Professional License Match
            Property Tax Match
            PARIS Match
            Quarterly Wage Reporting Match
            Racing Winnings Match
            SSA 40 Quarters CITIZENS Match
            School Address/Guardian Match
            Securities Match
            Section 8/Public Housing Match
            State Payroll/Pension Match
            SAVE Match
            TPHI Match
            UIB Match
            Utilities Match
            VNS Employment Match
            Vital Statistics Match
            Worker's Comp. Match
            24-Month Continuing Eligibility Match

          Obtaining access to external data can be difficult and
    time consuming. States need assistance to promote this exchange of
    data.

        Chairman HERGER. Thank you. I want to thank each of you for
    your testimony and particularly for traveling to be with us
    here today. It seems that a key advantage of increased use of
    technology involves disaster preparedness, which is obviously
    something that Texas, Louisiana, and Florida have experienced
    firsthand. Would each of you please briefly address how the use
    of automation can help speed services and assistance to people
    when disaster strikes and comment on what we have learned from
    Katrina to help better prepare for future disasters?
        Ms. RATH. Mr. Chairman, I think it was important that the
    technology has to be very closely tied and an integrated part
    of the program service delivery. From our perspective, the most
    important aspect of it was the scalability. You can immediately
    increase your capacity and your capability for delivering
    services without being limited by your personnel, your
    location, or your offices. If you have that scalability, then
    you are able to respond to a sister State's needs. We had our
    own Rita. We had 65,000 unemployment claims come in in 2 weeks,
    to immediately process those, not by the offices in the area,
    but we had centers in El Paso responding to that need.
    Technology allows us to do that very seamlessly and without the
    customer being aware of it.
        Chairman HERGER. Thank you.
        Ms. GAUTREAU. In Louisiana, we issued 500 million emergency
    food stamp applications in a very short period of time, and I
    know that the technology there to do that was critical for our
    State's success in being able to handle that incredible volume.
    The technology failure, however, in the registration of people
    coming into shelters I think was one of the most glaring errors
    that really we saw so clearly with Texas because we were
    working with them multiple times during every day, trying to
    understand who was coming into their shelters. What we saw
    happen in the evacuation was, as the waters rose, children were
    taken from rooftops, from dangerous situations, and flown to
    Baton Rouge where we had an emergency children's shelter. The
    helicopters that came back then took the parents to Texas.
    There was no way that we had any electronic means to register
    either those children or those parents at those shelters. If we
    had had some kind of common data system that we could have used
    for registration, then we would have been certainly better
    equipped in our reunification process. We are looking at maybe
    electronic bracelets. We have a new Permat system that we plan
    to hopefully not have to test in 56 days, but as the new season
    approaches, we are looking at more technology at the
    registration sites in those shelters, and we hope that that
    will give us an edge against that kind of destruction and
    separation.
        Chairman HERGER. Thank you.
        Mr. WINSTEAD. Mr. Chairman, the hurricane season of 2004
    was one of the important events that really led to the
    development of our Web application. Among the visitors to
    Florida in 2004 were Charley, Frances, Ivan, and Jeanne, and we
    were frankly devastated by that. In the Disaster Food Stamp
    Program, we were faced with having tens of thousands, if not
    hundreds of thousands of applications that we could not
    process. In a 72-hour period, our agency staff developed the
    prototype Web application that became the start of our ACCESS
    FLORIDA Web application. Ultimately, we served 2 million
    Floridians in the Disaster Food Stamp Program in 2004. Then in
    2005, with Hurricane Dennis that hit the Panhandle and then
    Hurricane Wilma that hit some of the most populated areas of
    Florida, we served an additional 3 million Floridians in 2005,
    and there we were able to apply those lessons. We took paper
    applications, but we drop-ship them to processing centers where
    we scan them in and then stream the data to our Web application
    for processing, and then issue benefits by EBT card.
        We are planning new things in anticipation of the hurricane
    season of 2006. We have enhancements to our Web application,
    looking at ways to do more issuance of EBT cards on sites,
    looking at point of sale terminals for card swipe technology,
    integrated with the Florida driver's license database. All of
    our driver's licenses now have magnetic strips on them, so we
    are working on technology so you can swipe your driver's
    license to verify your identity, swipe your EBT card to
    validate your benefits there. We can associate the EBT card
    number, the case number, and the driver's license number so
    that we can make sure we have got the right person and speed
    the application of benefits. We are also looking at some
    additional mobile technology, including satellite technology,
    to try to be ready to rapidly respond to the needs of people
    this hurricane season.
        Chairman HERGER. Thank you. Mr. Fecci, do you have any
    post-9/11 New York thoughts?
        Mr. FECCI. Yes, I do. I was very heavily involved in the
    recovery after 9/11 in the city. We were able to rebuild
    facilities that were heavily damaged very quickly and convert
    our systems over to the issuance of emergency benefits. One of
    the chief lessons I learned from that was that we were able to
    do that because we were able to suspend the very complex and
    time-consuming procurement regulations, and I would suggest
    that many States should have emergency contingency type
    contracts that would only be exercised in a time of emergency
    to get us the goods and services that we need to rebuild very
    quickly.
        Chairman HERGER. Thank you. Ms. Henley, do you have any
    comments?
        Ms. HENLEY. Well, as it relates to disasters? No, sir. I
    think that there are--one of the things that I would like to
    see with technology, especially with EBT and child care, is
    incentives offered. It would be a real shame to have saved the
    $10 million plus that we have saved in Oklahoma and pour it
    back into quality child care, just to have that taken back out,
    because all of our kids are benefiting now, so incentives would
    be a great opportunity.
        Chairman HERGER. Thank you. The gentleman from Washington,
    Mr. McDermott, to inquire.
        Mr. MCDERMOTT. Thank you, Mr. Chairman. When I went to
    Louisiana, the trip was scheduled to see a lot of oil fields,
    and I sort of skipped all that and went to see foster kids and
    hospitals and the kinds of social services things. I would like
    to ask you a couple questions about that. There is a budget
    laying on the desk here in the Senate--or in the House right
    now that cuts 30 percent out of the SSBG. In light of that,
    talk about what the disaster did to your planning for
    technology and also your ability to give mental health
    services, because nobody here has said a single thing about
    what happens to human beings emotionally in this, which we all
    know creates more turmoil, which creates more child abuse,
    which creates more foster kids. It is a system that is feeding
    itself, and unless you arrest that, the mental health issue has
    got to be there someplace in it. Talk about a 30-percent cut
    and where you are in putting your system back online since you
    have had a whole 7 months to get it back all together, right?
        Ms. GAUTREAU. Yes, thank you, Dr. McDermott. We were in the
    process of doing an integrated case management system across
    the Department of Social Services called ``No Wrong Door'' that
    actually would have several of the ingredients that my
    colleagues here have talked about today. That project was put
    on hold in the financial constraints that hit Louisiana
    immediately after the storm. We are now going to have to--I
    believe the word is ``hold'' or ``freeze'' that contract. we
    are finishing up the first phase of it so that we will have a
    product to deliver, but it will not put us in statewide
    Automated Child Welfare Information System (SACWIS) compliance,
    which is the Federal standard for child welfare systems and our
    technology. The original product would have done that. It will
    not do that now, and that is due to our budget cuts. The cuts
    to the social services block grants mean an awful lot to a
    State that is already in fiscal constraints. Our use of those
    funds really does allow us to enhance our mental health
    services. Our Department of Health and Hospitals, which houses
    our mental health, can only meet the needs of about 14 percent
    of the population, of the identified need that we know we have.
    That was pre-storm. We have always used our money and the child
    welfare system to augment those mental health services.
        The children that come into the foster care system are
    already, by virtue of coming into the system, children that
    have been traumatized by abuse and neglect, and so their mental
    health needs certainly exceed those of most ordinary children.
    We have staff as well as foster families and foster children
    whose mental health is very fragile. The radio station that you
    referenced, counting down the days to the storm, I don't think
    there is an Louisianian anywhere in this Nation that does not
    realize that hurricane seasons starts June 1st. People are
    frightened. They are fragile. They are worried. We are seeing
    an incredible increase in post-traumatic stress. We are seeing
    children that were adjusting well in other States getting
    frantic. We are seeing our incidence of child abuse in the
    resettled part of New Orleans going up exponentially. We took
    13 children into care in 1 month in a city that has less than
    half of the population that it had before. We are just seeing
    the exponential repercussions of not addressing the mental
    health services of this population--not just the foster care
    population, but our staff and our regular citizenry. The
    technology that we need to move forward as SSBG, if that cut
    goes through, as the Budget Reconciliation Act (P.L. 109-171)
    impacts that, if title IV-E gets capped, as is often talked
    about in these hallowed halls, you are really putting a burden
    on States that are fiscally constrained by the aftermath of the
    storm. We were fiscally constrained before, but we certainly
    have a dual impact now.
        Mr. MCDERMOTT. Talk about the title IV-E cap, what that
    means to you.
        Ms. GAUTREAU. The title IV-E cap would be an immediate $3.7
    million hit to my budget, and that is just in the first year,
    and then the outward progressions would change as----
        Mr. MCDERMOTT. Is that salaries of employees or is that----
        Ms. GAUTREAU. It is administrative cost, which includes
    some salary, but it also includes some service delivery.
        Mr. MCDERMOTT. Are you retaining foster parents or are
    you--how are you dealing with the 13 new ones you got? What do
    you do them? You just plop them on top of what you already
    have, or have you got foster parents standing out there
    waiting?
        Ms. GAUTREAU. No, we do not have foster parents sitting out
    there waiting. We hoped that we would with the aftermath of the
    storm when all of the people that called that wanted to adopt a
    Katrina orphan. We tried to sign them up and encourage them to
    become foster parents in their own States as well as Louisiana.
    We have a shortage of foster care families in the State. We
    still have about 136 foster families outside of the State that
    have not been able to come back into the State, and that leaves
    us a shortage of those families. We waived the normal
    restrictions for foster care about space and house size and
    room capacity so that we could double and triple up with our
    foster families who are in the State and who are willing to
    take extra children. We are in desperate need of foster care
    families, and that takes money to recruit them.
        Mr. MCDERMOTT. Thank you, Mr. Chairman.
        Chairman HERGER. Thank you. The gentleman from Louisiana,
    Mr. McCrery, to inquire.
        Mr. MCCRERY. Thank you, Mr. Chairman. I thank all of you
    for your testimony today and for trying to help us as we figure
    out the best way to proceed nationally on improving our social
    services benefit programs across the board. I want to assure
    all of you that, even though the President's budget calls for a
    30-percent cut in social services block grants, the President
    cannot pass anything. The Congress has to pass the budget and
    appropriate all moneys, and every once in a while we disagree
    with the President, whether he is Republican or Democrat. I
    cannot remember in 18 years in Congress when a President's
    budget has been adopted by the Congress. Don't worry about this
    30-percent cut in the President's budget. My guess is that when
    the Congress passes the real budget, there will not be a 30-
    percent cut in the SSBG.
        Ms. Gautreau, I want to explore just for a minute your
    reference to the SCWAS. As you know, this has been basically an
    open-ended entitlement for States. Initially, back in the early
    nineties, there was a 75-percent match. For every dollar spent
    by the State, the Government would put up 75 cents of it. Now
    it is a 50-percent match, 50 cents per dollar Government
    contribution, Federal Government contribution. Yet our State
    never got to the point where we were implementing a program. Of
    course, that is not your fault. That has been a number of years
    that that inaction has occurred. Where are we now? Why haven't
    we been taking advantage of this open-ended entitlement?
        Ms. GAUTREAU. We were taking advantage of it in the No
    Wrong Door system that we were building that I referenced a
    moment ago. The program was put on hold because of the lack of
    the State's ability to meet its 50-percent match now to move
    forward in light of the budget constraints that we are under.
    The system that we were building would have been SACWIS
    compliant. We are one phase into a three-phase, 10-year
    project, and we were not quite 2 years in. We have the
    beginning of a SACWIS compliance system, but we will not be
    there with the implementation of this first phase.
        Mr. MCCRERY. If we were to have had a system fully
    operational before Katrina, would it have helped us deal with
    the effects of Katrina?
        Ms. GAUTREAU. Absolutely. We would have not been so reliant
    on the paper records. We lost the entire record system in St.
    Bernard Parish. We lost many of the records in Plaquemines
    Parish. We were fortunate that in Orleans our office was on the
    15th floor of a building downtown, and so when we got the
    papers dried out, most of them were there. The courts lost a
    lot of documents, but between us we have been able to piece
    together case records. Had we been SACWIS compliant, had that
    technology been in place, all of that would have been
    computerized data, and we would have had no fear of losing any
    child's record.
        Mr. MCCRERY. Have all the foster children been accounted
    for?
        Ms. GAUTREAU. Yes, sir. We found them all very, very
    quickly. They were scattered across our Nation, and they were--
    we still have quite a few children in Texas, Mississippi, and
    in Georgia. There are only 136 out of State now, so out of
    2,000, we are thrilled to have them home.
        Mr. MCCRERY. We talked a little bit about the $220 million
    in additional social services coming to Louisiana. What do you
    plan to do with that?
        Ms. GAUTREAU. Fifteen million out of the $220 million will
    go to help us catch up with some of these children, the mental
    health services that we desperately need for these children we
    will use to kind of backfill some of our budget deficit. We
    will use that money to do the mental health. The travel--we
    have this unique dynamic now where we have a court of
    jurisdiction in New Orleans, we have a child maybe living in
    Texas, and then we have a birth parent in, say, Alabama. We
    have this unique triangular system, and courts require foster
    children see their birth parents monthly and they come to court
    monthly. We do not have the transportation dollars to manage
    this system, and we will be using some of that SSBG money to
    help us literally transport these children across State lines.
    We will also use some of it to implement some new prevention
    programs which we hope will in the long run keep children out
    of foster care and keep families stable and together.
        Mr. MCCRERY. All right. Thank you very much.
        Ms. GAUTREAU. Thank you.
        Chairman HERGER. Thank you. The gentleman from California,
    Mr. Stark, to inquire.
        Mr. STARK. Thank you, Mr. Chairman. Just very quickly,
    while I am intrigued and encouraged by information technology
    that can help us all do our work, sometimes I think that we
    have to be careful, particularly in dealing with children, that
    we not lose the human contact. Ms. Henley, you point out that
    your program gets parents involved in the children's child care
    needs and environment. I suspect that means as a result of
    requiring them to be at the child care facility at least once
    every 10 days and swipe a card. That does not mean that they
    are really getting in and involving themselves in the
    activities of the child care. It just means they have got to be
    there to put their key in the lock. That is better than
    nothing. Don't misunderstand me, but I hope that you wouldn't
    lose sight of the way that we could entice parents to become
    more actively involved. Mr. Winstead, while I am intrigued with
    the Florida system--and I am sure this is something you have
    heard more about than you care to, but it seems to me that your
    Statewide Child Welfare Automated System was fully working at
    the time you lost Rilya Wilson, wasn't it?
        Mr. WINSTEAD. If I may----
        Mr. STARK. Well, and you have not found her yet, as far as
    I know. Now, maybe it would be easier to find her with the
    electronic system, but I merely suggest that as a means of
    saying that losing contact with people that, particularly in
    your communities, you are charged with--and particularly with
    children, where I think that well-trained caseworkers still
    could be the quickest way to determine when children might need
    the services of Dr. McDermott. He is not going to be replaced
    very soon by a computer, I don't think. I guess I would just
    like to--I would say the thing to Mr. Fecci, that while I am
    intrigued with how much money Indiana has saved by matching
    data, there is nothing in that list that says they have also
    found a lot of people who might be entitled to benefits who are
    unaware. The outreach was not emphasized. I guess I would just
    hope that with some of the savings that you get, Mr. Winstead,
    you would raise the pay of the workers who have face-to-face
    contact with your cases and in Louisiana that we would have
    some money left over from rebuilding to get preventative
    services to children who are going to be more traumatized than
    ever by being uprooted and moved to a strange community. God
    help them if they had to come to Oakland, California, from
    beautiful Louisiana. That could be a really traumatic
    experience for them. I am just suggesting that while we would
    like to help any way we can to encourage automation, that we
    don't become so intrigued with the push-pull, click-click of
    the computers and our BlackBerries and all this that we lose
    sight of what you all are really charged with is at some point
    that human interrelation that only a well-trained caseworker
    who is interested, and particularly with children, can be the
    one to help.
        Mr. WINSTEAD. If I may?
        Mr. STARK. Please, Mr. Winstead.
        Mr. WINSTEAD. I think we would agree, and I would in no way
    try to do anything but agree that the Rilya Wilson situation
    was a tragedy, and I offer no excuse, no rebuttal.
        Mr. STARK. Probably not caused by data processing----
        Mr. WINSTEAD. If I may quickly say a couple of things.
    First of all, yes, we have raised those frontline caseworker
    salaries. Governor Bush has led that charge. Secondly, one of
    the things that was not happening in Florida was proper
    attention in keeping up with monthly visits by caseworkers to
    children. That has been a real emphasis for us. The U.S.
    Departmant of Health and Human Services Inspector General did a
    report released in December about monthly visitation to
    children that noted Florida has the second highest compliance
    in that, but that was far too low for us. Last month, in March
    2006, out of over 47,000 children in in-home care and out-of-
    home care in our State, caseworkers visited 99.18 percent of
    them. That is what we are doing. The other thing, though, with
    technology that I would mention very quickly, Mr. Chairman,
    just to make you aware of a new project, it is a pilot using
    Nextel IH70 GPS-enabled camera/cell phone and Zora time track
    technology.
        Mr. STARK. You lost me.
        Mr. WINSTEAD. What it does--and I have seen it work. We
    right now are piloting--we have got 82 protective investigators
    in Florida using this technology. They have got GPS cell
    phones. The supervisor can call up on a computer screen. You
    can actually see a map, and you can watch where the caseworker
    goes. We have got a camera. The caseworker can take a picture
    of the child----
        Mr. STARK. Don't you tell my wife about that, Mr. Winstead,
    or I am in trouble.
        [Laughter.]
        Mr. WINSTEAD. The caseworker can also, when they go on
    annual leave or go to the doctor, enter a button to turn off
    the technology, but their supervisor knows it is turned off.
    The next version that we are getting in the pilot also will
    have a panic button so that if the caseworker gets in trouble
    in the field, we know where they are; we know to send help.
    Also, in rural counties, knowing where your caseworker is when
    a call comes in, you do not have to wait for somebody to come
    back to the office. You can look and see who is closest to that
    child and get somebody out there. That is a way that we are
    coupling the human contact that is so important--I agree
    completely about the training and the skill because it is
    really a people business. If we can give our workers the tools
    that they need and use the technology to help them do a better
    job, I think that is where you----
        Mr. STARK. Great, and that is what I guess I just wanted to
    remind everybody. Thank you all for your testimony. Thanks, Mr.
    Chairman.
        Chairman HERGER. The gentleman from California, Mr.
    Becerra.
        Mr. BECERRA. Mr. Chairman, thank you very much, and thank
    you for holding this hearing. To the witnesses, thank you for
    your testimony, especially on how you have tried to respond
    under some very compelling circumstances in many cases,
    especially, I know, in certain States more than others, things
    have been very difficult. Applause to you for the work that you
    do because we know you are already overworked to begin with.
    Let me just add, I know we have a vote coming up, so I would
    just like to say one thing. I hope we can continue to make use
    of every piece of technology we can, because as I see it, we
    are losing social workers faster than we can train them. Unless
    we do something to provide them with a better environment and
    they do not feel so overburdened, all that technology is going
    to go for naught because we will not have the human face that
    the technology allows us to put before these individuals,
    whether it is a foster child or parents who are trying to help
    out, as quick as we should.
        I hope that we can find ways or you can let us know ways
    that we can harness this technology to help you save money with
    other administrative costs, because if we do not figure out a
    way to have the average social worker stay on the job more than
    2 years, we are in real trouble. There is no way that anyone
    can do a decent job of providing services when you have got 100
    families you are trying to monitor, when you should really be
    looking at no more than 15 or so. Kudos to you if you have
    implemented some things. Congratulations if you have faced
    adversity and you overcame it. Then let us know how we can help
    you harness that technology sooner than later. With that, I
    will yield back the balance of my time because of the votes
    that we have coming up. Thank you very much for being here.
        Chairman HERGER. Thank you, and I want to thank each of you
    for the time you have taken for traveling here. Your
    information you have provided has been very interesting and
    will be helpful in the future as we look for ways to improve
    service delivery, achieve program efficiencies, and stretch
    taxpayer dollars. I would like to request of you, if we have
    some more written questions, if you would respond to those,
    please. Thank you again very much, and with that this Committee
    stands adjourned.
        [Whereupon, at 4:10 p.m., the hearing was adjourned.]
        [Questions submitted from Chairman Herger to Ms. Rath, Mr.
    Winstead, and Mr. Fecci, and their responses follow:]

             Questions from Chairman Wally Herger to Ms. Diane Rath

        Question: I understand that Texas plans to use electronic payments
    for unemployment benefits. How will receiving electronic payments help
    recipients? What type of savings do you expect to produce for
    taxpayers?
        Answer: Receiving electronic payment of benefits via a debit card
    will assist Unemployment Insurance (UI) claimants by:

        1. Eliminating lost or stolen warrants;
        2. Decreasing the time between payment authorization and
    availability of funds to the claimant;
        3. Eliminating check-cashing fees for claimants who do not have a
    bank account;
        4. Allowing the claimant 24-hours-a-day, 7-days-a-week access to
    the claim's payment history through an interactive voice-response
    system, customer support, or the Internet; and
        5. Providing 24-hours-a-day, 7-days-a-week customer support for
    payment-related problems.

        TWC anticipates the following savings by transitioning to a debit
    card system of UI benefit payments:

        1. Elimination of postage associated with mailing a warrant every 2
    weeks;
        2. Elimination of warrant cancelation and reissue expenses;
        3. Elimination of the need to store, print, process, and account
    for special warrant stock.

        Question: What is involved in Texas's ``complete integration of our
    Unemployment Insurance and Employment Services programs'' that you note
    in your testimony? How long will that take? What do you expect that
    process to yield in terms of better services for recipients? Will
    taxpayers see additional savings?
        Answer: Complete integration is a large coordination and coding
    project intended to both combine and streamline the information
    collection processes for UI claim filing and work registration. One of
    the primary goals is increasing data integration and sharing between
    both components of the UI claim filing systems--telephone and Internet,
    and WorkInTexas.com, the state's automated labor exchange system. TWC
    is also redesigning how job seekers input information into
    WorkInTexas.com to provide better quality resumes and applications for
    UI claimants.
        How long will that take? We estimate approximately 18 months for
    completion of the project as currently scoped.
        What do you expect that process to yield in terms of better
    services for recipients? The project envisions a single, more
    efficient, and essentially seamless claim filing and work registration
    process, resulting in a better quality work application. These
    integration efforts will provide a more user-friendly process for UI
    claimants and a more efficient method for Texas Workforce Center staff
    to match job seekers and employers.
        Will taxpayers see additional savings? Ultimately, our efforts at
    system integration will enhance the ability of our employers to fill
    their vacancies quickly, using the public workforce system they fund.
    We also believe that improving the quality and timeliness of UI
    claimants' work registration will reduce the amount of time claimants
    are unemployed.

        Question: Your testimony notes that the ``Lone Star Card'' is now
    used for social service benefits and that administrative costs and
    fraud have been reduced. Can you tell us how much has been saved or
    made available for other benefits by this innovation? What were some
    examples of fraud and abuse that has been prevented?
        Answer: How much has been saved or made available for other
    benefits by using the ``Lone Star Card'' for payment of social service
    benefits, including savings achieved through reduced administrative
    costs and fraud? The Lone Star Card is used for food stamp benefits as
    well as Temporary Assistance for Needy Families cash assistance.
    Eligibility and payment of benefits are administered by the Texas
    Health and Human Services Commission. Although exact savings are
    difficult to calculate, during the first 7 years of implementation,
    according to information from the Texas State Comptroller, the Lone
    Star Card was estimated to save $126 million in administrative and
    other costs. In addition, data from electronic benefits transfer makes
    it easy to detect and eliminate duplicate accounts and redundant
    information. The computerized system can also quantify the amount of
    unused benefits from 1 month to the next. As a result, in fewer than 3
    years following implementation of the Lone Star Card, almost 900,000
    dormant cases worth more than $28 million were removed from the Food
    Stamp rolls and cases worth more than $5.5 million were removed from
    the Temporary Assistance for Needy Families rolls.
        What are some examples of fraud and abuse that have been prevented?
    A $1 million illegal food stamp ring was uncovered at the end of the
    pilot project as a direct result of the electronic audit trail provided
    by the Lone Star Card. In addition, in 1996, a U.S. Department of
    Agriculture investigation in Houston only disqualified 9 percent of the
    area's food stamp retailers, compared to 15 percent that were
    disqualified in cities in states using paper coupons. This discrepancy
    suggests that unscrupulous retailers might have voluntarily withdrawn
    for fear of exposure with the electronic benefits transfer system.

        Question: What differences have you seen since unemployed workers
    have been required to register with WorkInTexas.com? How do you verify
    that claimants are making at least three work searches per week?
        Answer: What differences have you seen since unemployed workers
    have been required to register with WorkInTexas.com? Texas has always
    maintained a requirement that UI claimants register for work in the
    state's automated labor exchange system. Implementation of
    WorkInTexas.com has made that registration process much easier. Because
    WorkInTexas.com is Internet-based, UI claimants can access the labor
    exchange system 24-hours-a-day, 7-days-a-week, from any location that
    has an Internet connection. Additionally, feedback from users continues
    to validate that the WorkInTexas.com application compares extremely
    favorably to other Internet job search applications. We anticipate that
    the number of Texas employers and job seekers using the publicly funded
    labor exchange application will continue to grow.
        How do you verify that claimants are making at least three work
    searches per week? TWC uses a statistically valid, random sampling
    methodology to verify that UI claimants, who are required to do so, are
    making the appropriate weekly work searches. Each week, UI claimants
    are randomly selected to submit their work search logs to TWC. Staff
    verifies that (1) the requested log is received, (2) the log contains
    the appropriate number of work search contacts, and (3) the work search
    activities contained in the log are valid. TWC enacted state rules that
    integrate UI with each of our 28 Local Workforce Development Boards
    (Boards). TWC has determined that UI claimants must demonstrate that
    they are actively seeking work by making at least 3 weekly work search
    contacts. TWC has further determined that it may be appropriate to
    require more than three contacts per week, depending upon local labor
    market conditions as determined by the Boards. Boards, using various
    economic and geographic factors within their local workforce
    development areas, may raise the required number of work search
    contacts. In addition, TWC also provided Boards with the ability to
    lower the number of work search contacts in rural counties. However,
    the vast majority of UI claimants in Texas are required to make a
    minimum of three work search contacts per week. UI claimants who have
    been temporarily laid off, with definite return-to-work dates, as well
    as UI claimants attached to nondiscriminatory union hiring halls, are
    not required to conduct weekly work searches

        Question: What efficiencies have you noted since Texas started
    running data matches using the National Directory of New Hires? Which
    programs are involved? What savings have you achieved? Do you have
    plans to use this information or similar data matching more broadly in
    the future?
        Answer: What efficiencies have you noted since Texas started
    running data matches using the National Directory of New Hires?
    Accessing the National Directory of New Hires (NDNH) database has
    contributed to TWC's ongoing initiative for early fraud detection,
    while reducing the amount of overpayments. Since TWC entered into a
    computer-matching agreement with the Office of Child Support
    Enforcement (OCSE) in fall 2005, weekly new hire matches have increased
    by 75 percent. OCSE reports New Hire W-4 information 30 days from the
    date of hire, which is much timelier than acquiring employer wage
    information. Additionally, TWC has noted an increase in collection
    notices generated to UI claimants, which can be directly attributed to
    the additional new hire matches.
        Which programs are involved? Federal statute limits TWC's use of
    the NDNH to administration of the unemployment compensation program.
        What savings have you achieved? In Federal Fiscal Year 2005, TWC
    recovered overpayments in excess of $3 million. Additionally, TWC
    estimates potential overpayments that were avoided of approximately
    $3.9 million.
        Do you have plans to use this information or similar data matching
    more broadly in the future? TWC is interested in expanding our use of
    the NDNH to confirm employment for individuals participating in other
    programs. However, our use of NDNH is limited based upon federal
    statute. TWC administers many workforce programs in addition to
    unemployment insurance. If the federal statute were amended to provide
    workforce agencies more flexibility in the use of NDNH for all programs
    they administer, TWC would be able to conduct cross matches for other
    income eligible programs, and determine if individuals were
    fraudulently receiving benefits. In addition, TWC has been working
    closely with the United States Department of Labor (DOL) and OCSE in
    developing the design for the quarterly wage cross match. OCSE
    anticipates that the new cross match design will be available in fall
    2006. TWC also is working to enhance the current data-sharing agreement
    with the Social Security Administration (SSA) to improve verification
    of identity, while obtaining additional personal characteristics to
    reduce fraud. These additional data elements include disability, death,
    and prison information.

        Question: What defines the difference between states that have
    taken steps to improve their use of technology in public benefit
    systems and those that haven't yet? Does it boil down to resources,
    leadership, vision, or something else? All states have access to the
    same federal funding rules when it comes to paying for systems; so that
    seems to suggest that funding is not the key issue. So what drives
    state differences on this?
        Answer: What defines the difference between states that have taken
    steps to improve their use of technology in public benefit systems and
    those that have not yet? We can only speak to those factors that have
    driven technology decisions as they relate to the Texas workforce
    system. For Texas, the challenge to meet employer and job seeker needs
    counterpoised against very real budget constraints has led to the use
    of technology and automation. Additionally, Texas continues to foster a
    climate favorable to high-technology and science-oriented business.
    Enhanced use of technology by the public workforce system is a natural
    extension of that effort.
        Does it boil down to resources, leadership, vision, or something
    else? We believe that in Texas, it is a combination of all three.

        1. Resources: Texas receives less than 40 cents of every dollar
    paid by its employers in UI tax. With that rate of return, we have been
    driven toward finding efficiencies and process improvement through the
    strategic use of technology. Our efforts have helped us to
    simultaneously contain costs and improve the services we provide to
    employers and job seekers.
        2. Leadership: TWC is a leadership partner with the Governor in
    ensuring that the Texas workforce system effectively and efficiently
    serves employers and job seekers of Texas. Employing technology in
    innovative ways throughout the publicly funded workforce system
    maintains services, contains costs, and positions Texas as a leader
    among states in economic and workforce development.
        3. Vision: The vision of Texas' leadership is to ensure that it
    maintains a workforce and economic development infrastructure that
    makes Texas highly attractive to business, thereby generating high-
    growth, high-demand jobs for Texans. Successful deployment of
    automation and technology are key factors in realizing this vision. All
    states have access to the same federal funding rules when it comes to
    paying for systems, so that seems to suggest that funding is not the
    key issue.

        What drives state differences on this? As previously indicated,
    resources, leadership, and vision are the key drivers of the
    differences among states. However, we should note that Texas has long
    been concerned that federal funding rules do not drive states toward
    seeking the efficiencies that Texas has--particularly regarding UI. We
    have, for years, puzzled over the discrepancies between the allotment
    criteria in federal statute and the factors that DOL says it has relied
    upon to allot grant funds among the states. Indeed, two of the three
    factors set forth in section 302 of the Social Security Act for
    allotting funds necessary for ``proper and efficient administration''
    of each state's UI laws have been ignored by DOL in awarding base
    grants to states. This allotment practice not only reinforces, but
    finances inefficiencies and inequity among states, while penalizing
    streamlining and cost-reductions. The population covered by state laws
    and the number of unemployed in a state should be key factors in any
    allocation methodology. While differences in states' administrative
    costs are often attributable to choices that states have made regarding
    UI claimant eligibility, overall recipiency, and program
    administration--DOL methodology should not consider these cost factors
    ``uncontrollable,'' thereby allowing other states' programs to be
    financed by tax proceeds from Texas' employers. Texas has worked
    diligently to enhance services to employers and UI claimants while
    containing costs. Strategic deployment of technology and automation
    have been key to those service enhancements.
                                     ______

            Questions from Chairman Wally Herger to Mr. Don Winstead

        Question: What has Florida done with the estimated $83 million in
    savings you produced by improving your use of technology in public
    benefit programs? Are those state or federal funds? Did your saving
    state funds also reduce federal spending in Florida?
        Answer: The $83 million in savings was achieved from administrative
    costs due to reductions in personnel and related expenses, such as
    savings from reducing leased office space. These savings resulted in
    reductions in our agency's budget requests to the Florida Legislature.
    The savings included state funds, Temporary Assistance for Needy
    Families (TANF) federal funds and federal matching funds for food stamp
    and Medicaid administrative expenditures. The state fund reductions
    permitted the Legislature to use the resources on other priorities and
    to reduce the overall budget. The TANF savings were redirected by the
    Legislature to other permissible uses and the portion consisting of
    federal matching funds resulted in reduced federal expenditures and
    savings for federal taxpayers.

        Question: How are welfare and food stamp benefits paid in Florida?
    Specifically, do you still use paper checks? How about benefits for
    Hurricane Katrina evacuees? What are the advantages to Florida of
    paying benefits electronically?
        Answer: Florida no longer uses paper checks for either welfare or
    food stamp benefits. Most of such benefits (including cash payments or
    food stamps to Hurricane Katrina evacuees) are paid using Electronic
    Benefit Transfer (EBT) cards. Cash assistance recipients also have the
    option of having their benefits deposited to their bank accounts
    through electronic funds transfer (EFT). Currently about 300 recipients
    choose EFT rather than EBT. Most cash assistance customers also receive
    food stamp benefits, so the EBT card provides the convenience of
    providing both benefits. Medicaid recipients receive ``Gold Cards''
    through which they receive access to health care by authorized health
    providers.
        EBT and EFT services are a win-win for customers, retailers,
    financial institutions as well as federal and state agencies. Customer
    benefits are received more quickly and are less likely to be lost or
    stolen. It is also easier for customers to access benefits.
    Efficiencies in processing payments and recordkeeping provide savings
    for taxpayers. In addition, electronic payments enhance program
    integrity. This is particularly evident in the food stamp program where
    the use of EBT cards help assure that benefits are only used on
    authorized food items at participating retailers.

        Question: What does Florida do to promote electronic payments? What
    do you do to help people without bank accounts who cannot receive
    direct deposits? Do you foresee a day when every government payment is
    made electronically, and none by paper check?
        Answer: Florida is a leader in promoting electronic payments.
    However, we believe we can do much more in this area. State statutes
    require most state employees to use direct deposit. Payments to
    contracted providers are also primarily issued via direct deposit. As
    indicated above, benefits are issued for the major Economic Self-
    sufficiency Programs electronically via EBT cards or EFT. While cash
    assistance recipients can choose the option of direct deposit into bank
    accounts, they do not have a choice to receive paper checks.
    Additionally, direct deposit is used for unemployment compensation
    payments to people with bank accounts and discussions are underway now
    to enable the use of EBT cards for others. The Department's Strategic
    Plan also includes a cross functional workgroup to plan for use of
    electronic payments for Independent Living stipends, foster care and
    adoption subsidies, and self-directed mental health and substance abuse
    services. Regarding assistance for people without bank accounts, bank
    accounts are not needed when benefits are issued on EBT cards. However,
    the department has worked with the State Comptroller's office to
    encourage financial institutions to create low cost bank accounts for
    individual use. Finally, we do foresee a day when every government
    payment is made electronically and we are rapidly moving toward that
    day.

        Question: You note that in your Economic Self-Sufficiency programs
    you now serve more people, with literally thousands of fewer staff. If
    my math is correct, each worker now helps about 560 recipients per
    year, compared with about 260 recipients served per worker in 2002.

          What programs are included in the Economic Self-
    Sufficiency plan?
          What happened in terms of the quality of services? Is
    there any evidence that services suffered in the process?
          What became of the caseworkers who formerly carried out
    these functions for applicants?

        Answer: The Economic Self-Sufficiency program includes determining
    eligibility for TANF, food stamps, Medicaid, Optional State
    Supplementation, Refugee Cash Assistance and Refugee Medical
    Assistance.
        We have seen improvements in quality of services in a variety of
    measures. Our food stamp error rate has been reduced and we have also
    seen reductions in the error rate in cash assistance payments. For
    example, in our TANF program the payment error rate declined from 6.2%
    in 2001 to 2.87% in 2005. The food stamp error rate fell from 9.8% in
    2001 to an estimated 7.02% in 2005. This improvement in quality
    occurred even though the state was hit with seven hurricanes and had to
    shift tremendous amounts of resources to disaster relief.
        As I stated in my testimony, we include a customer survey at the
    conclusion of the web application and 90% of customers indicated they
    would use the web application again. In addition, our Quality Control
    staff surveyed customers on their use of the self-service areas of our
    service centers. 92% of those who used the self-service area reported
    that it was convenient and easy to use.
        Regarding caseworkers affected by the improved efficiency of our
    operation, the significant majority of the reductions in staff were
    accomplished through attrition and elimination of vacancies. Where
    attrition was not sufficient to achieve appropriate reductions, we
    formed teams to facilitate the job change process. These included Human
    Resources staff as well as staff from local Workforce agencies. These
    teams worked to assist employees in finding other opportunities within
    our agency, or in other positions within either government or the
    private sector. Approximately 400 employees were affected by layoffs.
    Some chose to retire, but most were able to find other employment.
    Fortunately, through this period, Florida was a leader in job growth
    and experienced record low unemployment.

        Question: What defines the difference between states that have
    taken steps to improve their use of technology in public benefit
    systems and those that haven't yet? Does it boil down to resources,
    leadership, vision, or something else? All states have access to the
    same federal funding rules when it comes to paying for systems; so that
    seems to suggest that funding is not the key issue. So what drives
    state differences on this?
        Answer: Resources, leadership, vision and other factors all played
    a role in shaping Florida's approach to modernizing the public benefits
    system. Governor Bush and the Florida Legislature provided very high
    level leadership and direction on this issue. Proviso language in the
    2003 Appropriations Act directed the department to achieve efficiencies
    in the public benefits system. Additionally, Florida was fortunate to
    have some highly talented and creative staff who were able to envision
    a new system and create the necessary technological tools to achieve
    it. As I indicated in my testimony, the need to respond to disasters
    also played a role. The 2004 hurricane season, in which four major
    hurricanes struck the state in only 6 weeks, and the ensuing disaster
    food stamp programs created an environment where the state was forced
    to test new approaches to meet emergency needs. The web-based tool
    developed for this need became the prototype of the web application
    that is in operation today.

        Question: Your testimony notes that today about 77 percent of
    public assistance applications in Florida are submitted over the
    Internet. That's compared with 41 percent in July 2005. That's a huge
    leap in a short time.

          What do you do to ensure that with the increased
    electronic applications there aren't ore people improperly claiming
    benefits, such as by claiming benefits from another state, or under
    someone else's Social Security number, or some other scheme?
          Are the systems in place to prevent fraud and abuse in
    the electronic world stronger than when paper applications were the
    norm?

        Answer: We use multiple mechanisms to reduce improper payments and
    improve the integrity of public benefit programs. One mechanism is to
    designate cases that meet certain ``error-prone'' criteria as ``red
    track cases''. These situations are subject to more rigorous review
    through the application process. Another important mechanism is data
    exchange. We perform approximately 20 data matches with external
    sources. These include the Benefit Earnings Exchange Reports System
    (BEERS), the Beneficiary Data Exchange Title II (Bendex) system, the
    Numident system to validate Social Security numbers, IRS unearned
    income data, Unemployment Compensation benefits, UI Wage data, and so
    forth. Seven of the data exchanges are part of the Income Eligibility
    Verification System (IEVS) and the remainder are additional matches
    done with federal and state sources. We currently perform a match with
    the State Directory of New Hires and we are in the process of
    implementing use of the National Directory of New Hires.
        We have reengineered our program integrity and front-end fraud
    prevention programs as part of modernization. These staff have access
    to more electronic data than the typical employee and are specially
    trained to find inconsistencies in information and follow up to prevent
    and uncover fraudulent activities.
        Florida also is one of 36 states participating in the Public
    Assistance Report Information System (PARIS) to identify potential
    duplicate program participation.
        The use of electronic data matching provides improved program
    integrity over the days when paper applications and paper verifications
    were the norm.

        Question: What are Florida's future plans to continue improving
    efficiency in providing public benefits? How can the federal government
    help?
        Answer: We are constantly working to improve the model and achieve
    greater efficiency. We think there are great opportunities to use
    electronic data matching in better ways including verification of
    identity. On-line, real-time matches with the Department of Motor
    Vehicles are planned. We are working on a process whereby customers can
    report changes on touch tone telephones, complete an eligibility review
    by updating information currently in their case, and receive more
    information on their applications using speech interactive technology.
    Secure authentication of the person's identity will make this two-way
    information highway possible. Centralized mail centers that interface
    with our Electronic Filing System for scanning and indexing of case
    file documents are also being considered for future streamlining
    enhancements.
        The federal government can help in a number of ways. Federal
    agencies can continue to be supportive and work with states to test new
    ideas and grant waivers where needed. For example, the Department of
    Agriculture has granted waivers to certain interview requirements to
    facilitate implementation of the web application. It is important to
    focus on outcomes rather than procedural requirements. States have been
    the laboratories of innovation in program design. States can also be
    the laboratories of innovation in use of technology. We believe Florida
    is an excellent example of what states can accomplish.
                                     ______

            Questions from Chairman Wally Herger to Mr. Dennis Fecci

        Question: Is data matching such as that practiced in New York or
    Indiana cost effective? In short, do the program savings from data
    matching more than offset any costs of running the matches? Do
    individuals benefit, for example when states are better able to target
    work supports like child care to people who just got a job?
        Answer: Data machining is extremely cost effective in New York.
    Technical and operational cost are clearly offset by revenues
    intercepted, and changes in eligibility status of individuals due to
    new and more accurate information. Large amounts of newly acquired or
    undisclosed assets are reveled through this process. New York has
    recovered many millions of dollars from bank accounts, court awards,
    inheritances, and lottery winnings, and so forth. The cost benefit of
    the new data matching imitative in Indiana will be determined in the
    third quarter of 2006 as the imitative is its initial stages, but is
    expected to yield substantial savings and be cost effective. Although
    some of the information obtained in the data matching process has been
    used to assist clients, data matching in New York, and thus far in
    Indiana, has focused on correcting and updating applicant and recipient
    eligibility information such as new and undisclosed assets ( salaries,
    bank accounts, awards, third party health insurance, and so forth.).

        Question: Why do you think more states haven't used data matching
    to ensure the public benefits they pay are correct?
        Answer: I believe that many states do not aggressively pursue data
    matching because they have limited resources and more pressing
    priorities. The process to obtain access to external data is difficult
    and time consuming. External entities are protective of their
    information, and are not familiar with the privacy, confidentiality and
    legal precedents regarding the release of information to states.
    Experience has shown that obtaining access to external data files takes
    many times longer than the technical tasks required to perform the
    match.

        Question: I note the closing comment in your testimony that
    ``States need assistance to promote this exchange of data.'' What sort
    of assistance? What specifically should the federal government do to
    better promote data matching?
        Answer: Data matching and its substantial financial benefits can be
    greatly accelerated nationwide if the Federal Government were to
    promulgate legislation and/or HHS regulations that would require
    private sector organizations to share data for the sole purpose of
    promoting applicant and recipient caseload integrity.

        Question: You note that a study in Indiana ``revealed that over 25%
    of Medicaid recipients in long term care had assets that were unknown
    to the state.'' What did the state do after learning this information?
    Did any savings result?
        Answer: It is my understanding that the state is in the process of
    determining what course of action should be taken to ameliorate this
    problem.

        Question: Does New York use biometrics to confirm an individual's
    identity or otherwise better ensure proper payments? What are the
    advantages of that approach?
        Answer: Approximately 10 years ago, New York implemented the
    Automated Finger Imaging System (AFIS) to positively identify
    applicants and recipients for the sole purpose of preventing
    duplication of benefits. AFIS has achieved this goal, has added to the
    integrity of the eligibility process in New York, resulting in the
    closing of several thousand cases. AFIS has also provided information
    which has led to many hundreds of arrests, prosecutions, and
    convictions for benefit fraud.

        Question: What defines the difference between states that have
    taken steps to improve their use of technology in public benefit
    systems and those that haven't yet? Does it boil down to resources,
    leadership, vision, or something else? All states have access to the
    same federal funding rules when it comes to paying for systems; so that
    seems to suggest that funding is not the key issue. So what drives
    state differences on this?
        Answer: I believe that the major differences between states that
    emphasize technology to improve public benefit programs and those that
    do not, are necessity and the availability of resources. In New York,
    for example, with its large volume of applicants, recipients and
    multitude of programs, technology is a key to efficient management and
    control. In forward thinking states, technology is seen as the way to
    ease the burden on operational staff and increase productivity. This
    vision as a motivator would be meaning less with out the technical and
    financial resources to design, develop, and implement automated data
    processing solutions. Large states such as New York have sufficient
    resources to elevate technology as a high priority without sacrificing
    other priorities. Regarding Federal funding, I do not agree that all
    states are on equal footing. This occurs only when a project is 100%
    federally funded. I have seen examples where states do not have the
    necessary budget to fund the substantial state share required to begin
    a data processing project.

        [Submissions for the record follow.]
                                               ACS Government Solutions
                                                         April 17, 2006

        We were privileged to attend the hearing led by Chairman Herger on
    April 5 addressing the use of technology to improve public benefit
    programs, and we appreciate this opportunity to submit written comments
    that we hope will provide additional clarity on the policy implications
    of the testimony presented at the hearing.
        The use of electronic payments for distributing benefits to
    families has skyrocketed. As Congressman Herger pointed out,
    ``electronic payments exceeded payments by paper checks for the first
    time in 2003.'' ACS is a strong proponent of electronic payment and
    electronic benefit delivery technology, and we have successfully
    implemented such technology in states throughout the country. We are
    proud to enable families to receive benefits more efficiently, more
    securely, and more cost-effectively.
        Virtually all of the invited witnesses commented on the value of
    electronic benefits delivery, pointing out cost savings, delivery
    reliability (especially in the face of natural disasters), and
    enthusiasm of benefit recipients. However, interactions at the hearing
    did not make clear an important distinction between the use of
    electronic cards to disburse cash assistance, food stamps, and other
    benefits and the use of such cards to pay fees for specific services.
    Cash assistance, unemployment compensation, and other benefits may be
    spent as recipients see fit. Food stamps may be spent for a limited
    purpose, and the use of electronic benefit cards helps ensure that
    inappropriate purchases are not made. The use of electronic payment
    cards for payment of state and Federal subsidies for specific services
    should be understood as a distinct use for such cards, presenting clear
    opportunities for reduction of erroneous payments. The testimony
    provided at the hearing by Lisa Henley, of the Oklahoma Department of
    Human Services, illustrated the potential impact of this use of
    electronic payment cards, and we are submitting this additional
    testimony to draw attention to the policy implications.
        While we believe that it may be valuable for the Federal government
    to provide incentives for states to move toward electronic benefit
    disbursement methods generally, we wish to point out the particular
    value of providing incentives for states to pay providers for
    subsidized services using electronic ``time and attendance'' payment
    systems, so as to reduce errors, fraud, and abuse. In fact, without
    utilizing the proven ``time and attendance'' card technologies readily
    available to prevent overpayments and fraud, electronic cards may
    simply accelerate the disbursement of unjustified overpayments.
        In her testimony before the Subcommittee, Ms. Henley, Project
    Director of the Oklahoma EBT Project, indicated that by coupling policy
    changes with technology that allows child care service benefits to be
    distributed and tracked electronically, the Oklahoma Department of
    Human Services was able to significantly reduce the amount of
    overpayments made to child-care providers. The policies and technology
    employed by Oklahoma enabled State officials to:

          Exclude ineligible providers and clients at the point of
    serviced delivery, before service was provided
          Prevent invoicing for service hours not provided
          Create real-time, online audit documentation at the point
    of service delivery
          Significantly reduce expenditures by preventing erroneous
    and improper payments.

        Oklahoma is now able to provide child care services to more
    children at a 10% reduction in the average cost per child--from $249.06
    per month before implementation to $224.46 after implementation. In
    addition, the Oklahoma Department of Human Services was able to
    eliminate administrative positions, since payment and auditing are
    completely automated. The cost to implement the time and attendance
    system was recouped by eliminating over-payments to service providers
    within only six months of operation (within the fiscal year during
    which the project was implemented.) The State is saving about $1
    million a month. The Department has invested these savings into
    provider training and increased provider rates, which means better care
    is provided for Oklahoma's children.
        Savings such as those experienced by Oklahoma are easily achieved
    when actual time and attendance is tracked for services provided. The
    swiping of electronic cards at the child-care center or home when a
    child arrives and departs creates an electronic invoice that the State
    uses to pay the provider. The automatic invoices completely replaces
    the time-consuming paperwork that was necessary to document attendance
    and prepare and submit invoices in the past, and the State never pays
    for hours of care that were not, in fact, provided. There is no need
    for after-the-fact audits of attendance records and recoupment of over-
    payments that were never made. Providers benefit by receiving prompt
    payments via direct deposit from the State, without ever submitting
    invoices or tolerating attendance record audits.
        Potential savings are by no means limited to child care services.
    In fact, the same simple, proven technology can be applied toward many
    other fee-for-service subsidy programs. Medicaid services that involve
    recurring transactions (such as drug and alcohol therapy, in-home
    health services) and TANF job-search/job-training participation can
    make good use of simple electronic payment cards to track time and
    attendance and ensure that fees paid to service providers are for
    services actually used.
        When considering legislation that encourages states to expand
    electronic delivery of subsidy payments and benefits, we urge the
    members of the Subcommittee to make the distinction between benefits
    distribution and fee-for-service payments and to provide specific
    incentives for states that establish effective fraud and abuse
    deterrence programs, such as the child care time and attendance
    tracking system that Oklahoma implemented. Such incentives can prevent
    improper payments from ever being made by preventing an erroneous
    invoice from ever being submitted.
        The hearing made it clear that electronic distribution of benefits
    produces postal savings and other cost-efficiencies that states are
    already recognizing. The opportunity to reduce erroneous payments by
    using electronic cards to document service usage before paying fees for
    service mentioned but not highlighted at the hearing, and we believe
    that it may not get much attention from state officials without a
    Federal push. Perhaps state officials are not focusing on eliminating
    wasteful spending when the funding source is a Federal block grant, or
    perhaps they are so focused on eliminating paper checks that they
    haven't realized the other potential benefits of moving to electronic
    payment cards, including accurate invoicing for fee-for-service
    subsidies and elimination of payments for services not actually
    provided.
        Thank you for permitting us to draw attention to this opportunity.
    We urge those drafting legislation addressing electronic benefits
    distribution to encourage states implementing electronic payment cards
    to promptly adopt use of this simple and proven technology to
    significantly reduce erroneous payments in fee-for-service programs
    such as child care and Medicaid and to also use it for tracking time
    and attendance in work participation activities in the TANF program.
                Respectfully submitted,
                                                Sherri Z. Heller, Ed.D.
                            Vice President, Children and Youth Services
                                                          Gregory Cohen
                                           Business Development Manager

                                         Social Security Administration
                                                          April 5, 2006
    Mr. Chairman and Members of the Subcommittee:

        Thank you for allowing me to discuss the Social Security
    Administration's (SSA) effort to move from a paper-based disability
    claims process to an electronic one. Our disability programs provide
    income security to over 11 million Americans with disabilities through
    the disability insurance program and the supplemental security income
    program. Commissioner Jo Anne B. Barnhart has made improving the
    disability determination process one of her highest priorities
    throughout her tenure as Commissioner. Our new electronic disability
    process--eDib--is central to our efforts to make those improvements.
        Shortly after she became Commissioner in 2001, Commissioner
    Barnhart asked for a detailed analysis of the entire disability
    determination process from the time that a claim is filed with SSA to
    the time that a review is under taken by a United States district
    court. This analysis showed that SSA's reliance on old-fashioned paper
    files was limiting the Agency's ability to efficiently manage this
    vital workload.
        This review showed a disability determination process tied to a
    paper folder that grew larger and larger as the process continued. The
    disability determination process started with a call to our ``800''
    number or a visit to one of SSA's 1300 field offices. Claimants were
    asked to fill out several forms providing the necessary information.
    Six-part paper folders were established for each claim. These forms
    along with signed authorizations for release of records were filed in
    these paper folders and then mailed to the State Disability
    Determination Services (DDSs)--the state agencies charged with making
    initial disability determinations. DDSs then mailed a request for
    medical evidence to the treatment sources, who then mailed paper copies
    of their records back to them for review. A DDS might also contact
    third parties and arrange consultative examinations to obtain more
    evidence, also by mail and also on paper. After reviewing all the
    evidence and making an initial disability determination, the DDS would
    then mail the disability folder back to the SSA field office. All of
    the forms and documents obtained during the process were shipped and
    stored in a traditional paper folder.
        A person dissatisfied with an initial determination made by a DDS
    could pursue an appeal through three administrative levels and the
    Federal courts.
        At each point, the process would start over again: paper forms
    completed and mailed, requests for evidence mailed and paper replies
    reviewed, and paper files transferred between offices. All this mailing
    back and forth was time consuming and often resulted in important
    evidence, or even entire files, getting damaged or lost.
        At the time of that analysis the Agency was on a 7-year timeframe
    to implement an electronic disability process that would replace the
    traditional paper folders. Seven years was too long to wait, so
    Commissioner Barnhart asked me and other members of her senior staff
    how soon we could roll out eDib if the necessary resources were
    provided and we told her two years. I want to thank the Members of this
    subcommittee who supported providing those resources, because with them
    and with a lot of hard work we in fact rolled out the electronic
    disability process in two years instead of seven.
        Reaching this goal required the coordination of enormously complex
    computer systems. To make this new system work, we had to do an
    extraordinary amount of programming not just on SSA's computers but on
    the different hardware and software used by the DDSs. This was and
    continues to be a monumental task. There were serious technical issues
    to overcome, especially in the early days. We aggressively worked to
    resolve all those issues. I want you to know that we are aggressively
    looking for and addressing problem areas.
        Implementation of the electronic disability folder began in January
    2004, and as of January 31, 2006, all 50 State DDSs have rolled out the
    electronic disability folder and more than half are working in a
    completely electronic environment for new cases.
        I want to note at the outset that eDib does not replace the
    millions of paper files that SSA already maintains. We will be working
    with them to conduct post-entitlement eligibility actions, such as
    continuing disability reviews, for years to come. But with eDib, we are
    seeing the beginning of the end of paper files, and the burden and
    expense associated with them.
        I would like to highlight for you the key elements of the new
    electronic disability process, and provide an overview of where we are
    with the rollout of that process.
        Before I begin, I would like to especially recognize the people
    responsible for the successful implementation of eDIB--SSA's dedicated
    employees and its partners in the State DDSs. The computer systems and
    software behind eDIB are incredibly complicated, and eDIB is a tribute
    to the talent of the men and women at SSA who analyzed the disability
    determination process, developed the software and hardware platforms,
    tested it and then rolled it out in a very controlled process.

    Overview of eDib
        eDib starts with the submission of an application for disability
    benefits to SSA. Once this application is received field office staff
    enter information that used to be collected on several paper forms into
    a central Electronic Disability Collect System (EDCS). The information
    gathered to make a disability determination is stored in an electronic
    folder organized along the lines of the traditional paper folder. Forms
    that were once printed and signed by hand are created and stored in the
    electronic folder. The data are automatically shared with the DDS
    systems in a way that eliminates the need for re-keying. So far, over
    12.9 million claims have been processed through EDCS.
        The contents of the electronic folder can be accessed by field
    office staff, quality assessment reviewers, and State and Federal
    adjudicators (and support staff) from anywhere in the country without
    the need to physically transfer the file. This provides greater
    flexibility and protects against lost or damaged folders.
    Electronic Disability Collect System (EDCS)
        With eDib, SSA offers an option to those comfortable with using the
    Internet of starting the application process on-line. By
    visitingwww.socialsecurity.gov, claimants can provide or start to
    provide the information on their medical, work, and education history
    necessary to adjudicate their claims. At a minimum, this option
    familiarizes claimants with what is needed to determine their claims,
    and optimally, it makes for a much more efficient disability
    determination process once the claimant does visit the field office to
    complete the application. Since the first Internet applications were
    taken beginning August, 2002, SSA has taken over 500,000 disability
    claims over the Internet.
        All of the information provided by the claimant either over the
    Internet or in person at one of our field offices is automatically
    entered into EDCS. During the field office review of the application,
    EDCS ensures that the SSA claims representative obtains all necessary
    information from the claimant through a system of alerts. While
    resolving these alerts take extra time, EDCS results in better
    documented claims and makes for more efficient processing during
    subsequent steps of adjudication. In addition, this information is
    electronically stored and propagates to other computer applications
    later in the process, avoiding the need for re-keying the information.
        100 percent of SSA's field offices are using EDCS, and over 97
    percent of initial claims are taken using EDCS Approximately 20,000
    disability claims a day are taken in this manner.

    Electronic Disability Folder
        One of the most important aspects of eDib is the electronic
    disability folder and the flexibility it offers SSA in managing the
    disability workload. Specifically, an individual's electronic
    disability folder can be accessed at any time by decision makers with
    authorized access. Multiple users in multiple locations may view the
    information they need even though they do not physically have the
    folder. I cannot overemphasize the importance of the flexibility
    afforded by the electronic disability folder, and I further want to
    emphasize that it is being done in a secure environment.
        For our decision makers, the heart of eDib is the electronic
    disability folder. We worked hard to make sure that the information in
    the folder was presented in a manner that was familiar and easy to
    understand by our decision makers. In the electronic folder, there are
    sections for payment information, queries, non-disability development,
    medical records, and so forth. Despite the underlying technical
    complexity, on the surface the electronic disability folder looks
    fairly simple, is organized along the same lines as the traditional
    paper claims folder, and contains both information from EDCS and images
    of medical records.
        Medical evidence enters the electronic disability folder in two
    ways. Those medical sources that maintain traditional paper files can
    either send the records to SSA electronically by facsimile or through
    paper documents. The paper documents must be scanned into an electronic
    format and then entered into the electronic folder. SSA has secured the
    services of a contractor to take care of the bulk of the scanning while
    SSA and DDS offices have the capability to do on-site or low volume
    scanning. For the growing number of medical sources that maintain their
    records electronically, electronic medical evidence may be forwarded to
    the electronic disability folder via a secure Internet website or bulk
    transfer facility.
        Already, the electronic claims folder is the official Agency record
    in more than half of the DDSs. The medical information we capture
    electronically is the world's largest repository of electronic medical
    records, with over 36.5 million records. SSA's goal is to move toward
    more electronic submissions. As part of its efforts to encourage
    medical providers to submit medical evidence electronically, SSA has
    conducted several outreach programs to the medical community to allay
    privacy law fears that medical professionals have concerning the
    provisions of HIPAA, the Health Insurance Portability and
    Accountability Act of 1996.
        Once medical evidence is received, eDib allows SSA to
    electronically capture, index, route, store, and retrieve medical
    evidence. The electronic disability folder offers adjudicators a wide
    array of tools that enables them to view, annotate, bookmark, paginate,
    categorize, and work with evidence electronically. For example, as an
    adjudicator reviews the medical evidence in the electronic disability
    folder, he or she has the ability to mark and highlight key pieces of
    evidence, making it easier to refer back to that evidence during the
    disability determination process.
        Finally, SSA has taken the forms used in the disability
    determination process and converted them into an electronic format. The
    use of electronic forms provides decision makers convenient access to
    them and ensures that they are always using the latest, most up-to-date
    version. The forms can be filled out on-line, electronically signed by
    the employee completing the form, and easily filed in the electronic
    disability folder.

    Quality Assurance
        eDib also improves SSA's ability to manage quality assurance.
    eDib's Disability Case Adjudication and Review System automates all
    aspects of the disability quality review function. Specifically, the
    system identifies cases for review, interfaces with the electronic
    disability folder, tracks processing, and provides reviewers with
    electronic versions of forms needed for the quality assurance review.
    eDib also provides electronic routing between the quality assurance
    office and DDS, replacing the old folder mailing process. Access to the
    electronic disability folder offers reviewers greater flexibility,
    which will allow SSA to transition to a quality assurance system that
    relies on both in-line and end-of-line reviews and will provide more
    timely and efficient feedback on quality.

    Office of Hearings and Appeals (OHA) Improvements
        At OHA, eDib required the development of the Case Processing and
    Management System (CPMS) to replace an outdated system that required
    manual data entry. CPMS eliminates much of the manual data entry, and
    provides improved case control and better management information. In
    addition, CPMS provides Administrative Law Judges with the ability to
    access the electronic disability folder.
        In addition to CPMS, OHA has rolled out the use of digital audio
    recording equipment and software in all our hearing offices, replacing
    the outdated analog cassette recording equipment that has been in place
    for over 20 years. Although most digital recordings are being stored on
    compact disc, we are beginning to store digital recordings in the
    electronic folder.

    Implementation Status
        All of these steps in the eDib process are being rolled out
    carefully and quickly. Roll-out was staggered to ensure that SSA was
    able to provide each DDS with the support necessary for successful
    implementation. After initial roll out in a DDS, the number of DDS
    decision makers working with electronic folders gradually expanded as
    the DDS developed expertise with the process. To date, all of the 50
    States have implemented the electronic disability folder. Nationally,
    over 92% of DDS staff adjudicate cases in an electronic environment.
        We have developed a certification process, called the Independence
    Day Assessment (IDA), to determine when each State is ready to use eDib
    exclusively as the official Agency record and no longer maintain paper
    folders for new cases. In January of 2005, the Mississippi DDS became
    the first DDS in which new disability claims are processed in a totally
    electronic environment. We currently have more than half of the State
    DDSs in a fully electronic environment, with the remainder scheduled to
    be IDA certified by the end of calendar year 2006.
        At OHA, all but five hearing offices now have the equipment to
    conduct video hearings. From October 2005 through February 2006, SSA
    conducted approximately 15,000 video hearings. CPMS has been rolled out
    in all of the hearing offices and is being used to control case flow
    and provide management information. In addition, 75% of our hearing
    offices have been trained on using electronic disability folders and
    are working electronic cases. To date, the volume of hearings involving
    electronic disability folders has been low (approximately 3,200 as of
    February 2006), but the initial response from OHA's administrative law
    judges, and claimants and their representatives has been positive.

    Next Steps
        This year, I expect each of the DDSs and OHA to be using electronic
    disability folders on a regular basis, and I expect all 50 states to be
    fully IDA certified by the end of calendar year 2006. The President's
    FY 2007 administrative budget of $9.496 billion for SSA would provide
    the resources to allow SSA to make the necessary technological
    investments in eDib to maintain service levels and continue to improve
    the way we do business in the disability process.

    Conclusion
        As I noted earlier, eDib allows adjudicators in the disability
    determination process to view an individual's claims file anywhere in
    the country. This flexibility affords SSA a new opportunity to make
    changes to improve the administrative efficiency of the program.
        Let me share with you a real-life story that makes obvious the
    necessity of eDib. In the aftermath of Hurricane Katrina--while issuing
    almost 74,000 immediate benefits payments for displaced persons and
    setting up response units at the Houston Astrodome and other evacuation
    centers--SSA provided further relief. Of the 5,000 cases in the New
    Orleans office of the Louisiana Disability Determination Services,
    1,500 had already been stored electronically through eDib. These
    records were immediately transferred to other offices to be processed.
    Ultimately, we gained access to the building, packed the remaining
    3,500 folders in 400 boxes, and carted those down six flights of stairs
    by flashlight.
        In closing, I believe that eDib is vital. Thank you for the
    opportunity to discuss this important initiative. I would be happy to
    answer any written questions that you may have.
                                                        Martin H. Gerry
        Deputy Commissioner for Disability and Income Security Programs

        Statement of Donald V. Hammond, U.S. Department of the Treasury
        I am pleased to submit this statement for the record to the
    Subcommittee on Human Resources. The Committee should be commended for
    the attention and focus it is placing on how technology can be
    leveraged to improve the delivery and access to public benefit
    services. Treasury is on the technological forefront in its use of
    automated systems and is committed to integrating the latest technology
    across all our business lines to increase efficiencies and improve
    services to individuals.
        The Fiscal Service, within the Department of the Treasury, is
    comprised of the Office of the Fiscal Assistant Secretary; and, two
    Treasury bureaus: the Bureau of the Public Debt (BPD) and the Financial
    Management Service (FMS). Our mission is to develop policy for and to
    operate the financial infrastructure of the federal government. FMS
    provides central payment services to federal program agencies, operates
    the federal government's collections and deposit systems, provides
    governmentwide accounting and reporting services, and manages the
    collection of delinquent debt.
        FMS disburses 85 percent of the federal government's payments,
    including income tax refunds, Social Security benefits, veterans'
    benefits, and other federal payments to individuals and businesses. In
    FY 2005, this represented over 952 million non-Defense payments with a
    dollar value of nearly $1.5 trillion, with more than 76 percent of
    these payments being issued electronically. FMS also manages the
    collection of revenues such as individual and corporate income tax
    deposits, customs duties, loan repayments, fines and proceeds from
    leases. Through its collection network, FMS receives more than $2.67
    trillion annually, of which more than $2.11 trillion, nearly 80
    percent, is transacted electronically.
        This statement focuses on the electronic delivery of federal
    benefit payments. Direct deposit is a payment program for consumers who
    authorize the deposit of payments automatically into a checking or
    savings account via the Automated Clearing House (ACH) network\1\
    Direct deposit is safe, convenient and reliable. The benefits became
    all too clear in the wake of last summer's hurricanes when direct
    deposit worked flawlessly.
    ---------------------------------------------------------------------------
        \1\The Automated Clearing House (ACH) network is a secure funds
    transfer system which provides for the interbank clearing of electronic
    entries for participating financial institutions.
    ---------------------------------------------------------------------------
        Benefits of Direct Deposit: Direct deposit is, without question,
    the best way for all Americans to get their money because it eliminates
    the risk of lost or stolen checks, reduces fraud, and gives more people
    control over their money.

          It's safer. Direct deposit protects people from fraud and
    identity theft. In fact, check recipients are 30 times more likely to
    have a problem with a federal check than with a direct deposit payment.
    Last year alone, half a million people called Treasury to report
    problems with checks.
          It's easier. Payments go straight to the recipient's bank
    account, so they don't have to go to the bank or credit union to
    deposit a check.
          It gives control. Direct deposit is completely
    predictable. The payment is deposited at the same time each month and
    the money is immediately available wherever and when ever it is needed.

        Savings to the Government: Direct deposit represents significant
    savings over checks--75 cents per federal benefit payment. If the
    almost 159 million benefit checks, of which 147 million were Social
    Security and Supplemental Security Income (SSI) payments, that FMS
    issued in FY 2005 were converted to direct deposit, the savings to the
    American taxpayer would total an additional $120 million. The vast
    majority of these savings ($110 million) would accrue to the Social
    Security Trust Fund.
        Certainty in Uncertain Times: The benefits of direct deposit were
    reaffirmed and came sharply into focus in the wake of hurricanes
    Katrina and Rita, which displaced thousands of federal benefit
    recipients days before their checks were scheduled to arrive. In
    preparation for uncertain times, a simple action like enrolling in
    direct deposit can offer much-needed peace of mind to people who get
    federal benefits, most of whom are seniors, the disabled or people with
    low incomes. While Treasury and the federal program agencies were able
    to make check payments available to individuals on a timely basis,
    extraordinary logistical challenges had to be overcome to deliver the
    payments in the disaster areas or to the individuals who had been
    relocated to other areas of the country. FMS used its technology during
    the Katrina recovery to identify for the Social Security Administration
    specific persons and areas where Treasury check payments were not being
    cashed. This assisted SSA in quickly arranging replacement payments for
    beneficiaries. However, the special handling of the check payments in
    the disaster areas was labor intensive and inefficient. The inherent
    delays in delivering checks caused inconvenience and hardship for the
    evacuees. Individuals who had direct deposit were able to access their
    funds immediately on the payment date from almost anywhere.
        Go Direct Campaign: Today, around 80 percent of the federal benefit
    payments are made by direct deposit. However, the direct deposit growth
    rate for federal benefit payments has leveled off to a rate of less
    than one percent a year compared to the five percent per year increase
    between FY 1997 through FY 1999. As the government prepares for the
    enormous increase in retiring baby boomers in the years to come, it is
    critical that the government reverse the low direct deposit growth rate
    trend. To increase the use of direct deposit for federal benefit
    payments, FMS, partnering with the Federal Reserve, has a nationwide
    campaign called Go Direct.
        Go Direct is a nationwide, grassroots marketing campaign designed
    to motivate Americans to use direct deposit for Social Security, SSI
    and other federal benefit payments. The campaign champions Treasury's
    longstanding efforts to shift from paper to electronic payments.
        Enrollment made Easy: Treasury uses technology to make the direct
    deposit sign up process fast, easy and convenient for everyone
    involved. Individuals may call our Go Direct toll-free number (800-333-
    1795) or use the recently launched online enrollment tool available at
    www.godirect.org. The online enrollment tool is available to financial
    institutions, nursing homes, community service organizations, and other
    organizations that would be completing multiple sign-ups. It greatly
    streamlines the process by allowing organization to set up a one-time
    secure profile that can be used time and again by to sign up federal
    benefit recipients for direct deposit. Each time an enrollment is
    entered, the profile provides basic information, which means faster
    enrollments with fewer errors. From the Go Direct campaign launch in
    June 2005 through mid-March, over 326,000 individuals signed up for
    direct deposit, of which approximately 44,000 have signed up through
    the online enrollment tool.
        In summary, the underlying technology used for direct deposit
    program is efficient, safe, and secure. Direct deposit effectively
    improves the delivery of public benefits to U.S. citizens. Increasing
    the growth rate of direct deposit participation for Social Security and
    other federal benefit payments will continue to improve service while
    saving taxpayer funds.

         Statement of Kentucky Cabinet for Health and Family Services,
                              Frankfort, Kentucky

        During the past year and a half, the Kentucky Cabinet for Health
    and Family Services has been actively exploring the use of mobile and
    Web-based computer technology with the goals of improving the quality
    and timeliness of child protection service investigations and of
    electronically verifying visits by social workers in child protection
    cases. This study consisted of a proof of concept using mobile
    technology including PDAs and laptops equipped with digital cameras and
    GPS capability; a field test using tablet PCs and laptop technology and
    a pilot project in one of six Cabinet regions in the state.
        During this 18-month process, a ``tool kit'' consisting of a laptop
    computer loaded with an investigation template; digital cameras with
    docking stations and date/time stamping capabilities; and state-of-the-
    art cell phones was created and is currently being used by 50 social
    workers in the field. The ``tool kits'' have the combined benefits of
    guiding social workers through the investigation process to assure
    accuracy and completeness, of date/time stamping the high resolution
    pictures taken at the referred child's location and condition, and of
    direct downloading of information collected into the mainframe-based
    worker information system (SACWIS). As a result, accuracy and
    timeliness of documentation is greatly improved, social worker
    efficiency is increased and electronic verification of home visits can
    be provided. A report of the results of the ``tool kit'' pilot will be
    completed on May 15th of this year and funding has been included in
    both the Kentucky House and Senate budgets and is awaiting passage.
    With funding secured, the refined ``tool kits'' will be distributed to
    all 1,500 of Kentucky's child protective service workers during the
    next state fiscal year (SFY '07).
        In a related project, Kentucky's worker information system is in
    the process of being upgraded to allow for remote access using Web-
    based technology. When fully operational, social workers will be able
    to access the mainframe system that contains all of the case
    information on a child and family from any personal computer with Web
    access capability. Again, having critical information available to all
    social workers concerned with a case enhances the Cabinet's ability to
    protect the children of the Commonwealth.

     Statement of Brian Kibble-Smith, J.P. Morgan Chase Treasury Services,
                               Chicago, Illinois

    Introduction
        JPMorgan Chase Bank, N.A. (JPMorgan) has had a long and productive
    history as the industry pioneer in the use of debit cards for the
    delivery of government funds and services. For over 17 years, one unit
    of the company has specialized in the delivery of public assistance
    benefits and entitlements through Electronic Benefits Transfer (EBT).
    More than 30 states and territories have selected JPMorgan to provide
    the EBT debit cards and related services that have replaced paper Food
    Stamp coupons nationwide. In most states, EBT has also replaced the
    paper checks once relied upon by programs such as Temporary Assistance
    to Needy Families (TANF).
        Nationally, JPMorgan is responsible for supporting about eight
    million EBT accounts, handling over $1 billion per month in benefit
    payments, and for disbursements under the Food Stamp and TANF programs,
    among others, that support more than 60% of our country's neediest
    households and individuals. Working closely with its state clients,
    JPMorgan operates EBT services that have repeatedly won the agencies
    using them recognition for excellence in technology and government.
        For example, in 2004, Government Technology magazine wrote of one
    of JPMorgan's clients: ``The California [EBT] program is an excellent
    example of a tremendous effort that involved all levels of government
    and the private sector.'' That year, the California EBT project,
    supporting nearly 900,000 California EBT cases under the Food Stamp
    program, TANF and others, received the Electronic Funds Transfer
    Association's ``EBT Project of the Year'' award and a state award for
    ``excellence in technology.''

    Debit Cards in Government Generally
        Debit cards provide the convenience, safety and reliability of
    direct deposit for their users. For governments, they are a tool for
    cost reduction, fraud control, greater accountability and improved
    services. In contrast, checks and vouchers are labor intensive,
    expensive to issue and replace, easily lost or stolen, and subject to
    forgery. Paper checks can also be expensive or difficult for recipients
    to cash. Americans without bank accounts reportedly spend roughly $8
    billion annually for check cashing and similar services. Debit cards
    are an excellent way to serve consumers who have no other banking
    relationship, reducing the consumer's cost of accessing funds while
    enhancing convenience and safety.
        EBT is just one of many government roles for debit cards.
    Governments at all levels are using debit cards to deliver funds as
    diverse as:

          Federal entitlements, like Social Security, Supplemental
    Security Income (SSI) and Veterans Administration (VA) payments
          Employee payroll and expense advances and reimbursements
          Child support payments
          Unemployment compensation
          Pensions and annuities, and
          Incidental fees and payments, such as those to trial
    witnesses and election judges

        Other government-related payments and programs suitable for debit
    cards include healthcare savings accounts, workers compensation, in-
    home care providers, subsidized foster care and child care payments,
    and check (and sometimes cash) disbursements to former inmates released
    from correctional centers. The use of debit cards only recently began
    reaching into some of these areas.
        The federal government took an initial, significant step toward
    debit cards in 1991, when the JPMorgan unit responsible for EBT was
    selected by the U.S. Treasury Department to conduct a pilot program for
    delivery of federal payments and entitlements, including Social
    Security, SSI, VA, Railroad Retirement, and others through a debit
    card-accessed, direct deposit account. The program was a success and
    led to a steady expansion in the application of debit cards to
    government payments. Over 50,000 of these accounts remain active with
    JPMorgan.
        In 2006, JPMorgan extended its debit card service one step further,
    rolling out a pre-paid debit card to speed payment of tax refunds
    geared especially for people who qualify for refunds under the Earned
    Income Tax Credit (EITC) and who do not have bank accounts. The card
    allows taxpayers to get their EITC refund through a debit card instead
    of a paper check, eliminating check cashing fees and allowing consumers
    to access their funds directly at retailers through Point-of-Sale (POS)
    purchases and from ATMs.
        The card was made available in numerous cities across the country
    in a partnership between JPMorgan and community organizations that
    gathered together under the Volunteer Income Tax Assistance (VITA)
    program for free tax preparation services. The money is available to
    consumers as soon as the IRS deposits the EITC refunds electronically.
    Consumers who also received a federal payment such as Social Security,
    SSI or VA could enroll for direct deposit of future payments in the
    same account as they received their EITC.
        As the public and private sectors have continued their movement
    toward increased debit card usage, consumers' groups have expressed
    concerns at times about debit cards and regulatory compliance. In
    JPMorgan's debit card business, compliance is an important focus. For
    years JPMorgan debit cards for payroll, Social Security and more recent
    applications like child support and unemployment compensation have
    essentially replicated the process of direct deposit banking. This has
    included compliance with applicable banking and consumer protection
    regulations.
        These laws and regulations include, for example, the requirements
    of Federal Reserve Regulation E, FDIC insurance for individual
    accounts, Gramm-Leach-Bliley privacy notices, ``Know Your Customer''
    requirements and name checks against Office of Foreign Assets Control
    watch lists. Federal and state policy-makers and regulators have paid
    considerable attention lately to laws and regulations as they pertain
    to emerging uses of debit, stored value and pre-paid cards. JPMorgan
    has been very much involved over the years in helping to develop new
    regulations and reform existing ones to make card-based payments work
    at their best for all stakeholders. The company intends to stay
    involved in this area and lend its expertise wherever it is beneficial.
    Debit Cards in Emergencies and Disasters
        One use of debit cards that JPMorgan has been engaged in since 1999
    but which only recently received national attention is the large-scale
    issuance of cards in an emergency. Hurricanes Katrina and Rita
    magnified the importance of debit and EBT cards as a part of our
    country's emergency response infrastructure. JPMorgan is the EBT
    contractor for Louisiana, and so was directly involved in the use of
    EBT and debit cards issued after these two disasters. Some of the ways
    JPMorgan deployed debit cards included:

          Working with Louisiana Parish staff, JPMorgan issued over
    414,000 emergency Food Stamp benefit EBT cards in that state for
    victims of both hurricanes
          JPMorgan converted Louisiana unemployment checks to debit
    cards, rapidly issuing over 300,000 cards which allowed unemployed
    Louisianans to access their funds even if they had relocated to another
    state
          JPMorgan is now replacing Louisiana child support checks
    with up to 50,000 debit cards
          JPMorgan added a first-of-a-kind state cash benefit, the
    ``Emergency Transition Assistance Program'' to the EBT service in
    Louisiana, serving 10,000 people
          In other states where JPMorgan is the EBT contractor,
    JPMorgan issued thousands of EBT cards to Gulf Coast evacuees, notably
    in Tennessee, issuing 5,000 EBT cards and could have issued 30,000 if
    needed
          JPMorgan issued several hundred thousand cards for the
    American Red Cross to provide financial assistance to disaster victims
    and for staff and volunteers to pay their expenses
          In Texas, JPMorgan issued about 12,000 disaster relief
    cards, each with $2,000 in federal cash benefits, to Katrina evacuees
    in shelters
          Finally, JPMorgan issued payroll cards on behalf of
    numerous public and private sector clients not able to send payroll
    checks to employees in the affected areas, including McDonald's, the
    Teamsters Union and the City of New Orleans itself

        JPMorgan had the expertise to respond because the company had
    initiated the concept of the emergency debit card, first by issuing
    75,000 EBT cards for Food Stamp benefit access in North Carolina after
    Hurricane Floyd, then 100,000 cards in Virginia after Hurricane Isabel,
    and 400,000 cards in Florida during the 2004 hurricane season before
    expanding the service's scope and reach last year. In addition, through
    novel emergency measures, JPMorgan quickly restored EBT services to
    over 1,200 small retailers in Lower Manhattan after the attacks of 9/11
    destroyed telecommunication switches in the World Trade Center,
    shutting off these retailers' ability to accept EBT cards. JPMorgan
    coordinated with retailers and government to keep benefits flowing at
    this crucial time.
        Today, of JPMorgan's current EBT client states, benefit agencies in
    Alaska, California, Florida, Georgia, Guam, Hawaii, Louisiana, South
    Carolina and Tennessee have each added high-volume, emergency EBT card
    issuance services to their regular EBT contracts. The company works
    closely with state agencies in pre-planning to ensure it can deliver
    both the cards and additional support needed for their effective use.
    After Katrina, for example, California increased its emergency card
    requirement from 400,000 to 1,000,000 so JPMorgan is increasing its
    delivery and support capacity for that state should it see its time of
    greatest need.
        In addition to these large-scale uses, JPMorgan has conducted many
    smaller-scale emergency card issuances, beginning with its replacement,
    chapter-by-chapter, of the checks and vouchers formerly used by the
    American Red Cross. Prior to Katrina, these cards were used for local
    emergencies affecting families and individuals. JPMorgan has issued
    emergency EBT cards for victims of tornados and even issued
    approximately 200 cash-value cards for evacuees from Haiti during that
    country's recent civil unrest.
        JPMorgan views EBT, debit, stored value and pre-paid cards as more
    than a ``best practice'' for government and an effective access
    mechanism for funds recipients. They have proven themselves to be a
    reliable, resilient, and mobile component of our national disaster
    response capabilities.

    EBT and WIC Benefits Delivery
        The next frontier for EBT is the federally-funded, state-
    administered Supplemental Nutrition Program for Women, Infants and
    Children (WIC). WIC has historically relied on cumbersome paper
    ``prescriptions'' to enable expecting mothers or those with small
    children to buy specific food items for themselves and their children
    as prescribed by WIC clinics in addition to the pre- and post-natal
    care the clinics provide.
        For benefit recipients, these paper forms are stigmatizing and
    inefficient, often forcing WIC mothers to choose between purchasing an
    entire food prescription at once or risk seeing portions of the monthly
    prescription go unused and expire. For WIC-participating retailers, the
    paper forms are labor intensive to process and cause them unnecessary
    write-offs when completed or submitted incorrectly, even in a minor
    respect. There is clearly a need for improvements in WIC benefit access
    and management.
        In addition, WIC is one of the largest ``discretionary'' USDA
    budget items. It is important to use cost-effective technology to
    relieve funding pressures on taxpayers wherever possible. An online EBT
    solution for WIC can emulate the savings, management efficiencies and
    reductions in benefit fraud and diversion experienced as the Food Stamp
    program converted from paper to plastic. JPMorgan and the USDA's Food
    and Nutrition Service both regard EBT as a key part of a long-term WIC
    strategy.
        Due to the information-intensive requirement for in-lane
    verification of specific WIC items, price and quantities, it was long
    believed that using expensive chip-imbedded ``smart cards'' was the
    only way to bring EBT to WIC. Smart cards can cost up to ten times as
    much as ordinary magnetic stripe cards to produce. They also require
    special equipment at participating retailers and WIC clinics to allow
    for loading and accessing information on the chip at an additional,
    significant cost.
        The far less expensive magnetic stripe cards, however, are
    universally used by consumers in the national retail POS and ATM
    infrastructures. For this reason, they have long been the standard
    technology for government benefits delivery in the U.S. In sharp
    contrast, numerous smart card EBT projects have ended or are winding
    down, having failed to establish the technology as a preferred benefits
    delivery solution for government.
        In July 2005, JPMorgan launched a successful WIC pilot program in
    Michigan that uses standard magnetic stripe EBT cards to replace paper
    food prescriptions for more than 3,500 WIC families at over 30 retail
    locations in Jackson County. The pilot is going very well and has
    proven the effectiveness of the JPMorgan magnetic stripe solution for
    all stakeholders. JPMorgan hopes to extend the technology to additional
    states through more pilots and, eventually, statewide WIC EBT services.
        Using magnetic stripe cards for WIC avoids the national retrofit
    that would be needed to make retailers smart-card ready and eliminates
    the need for specialized smart card equipment in WIC clinics. Magnetic
    stripe cards are already used with the POS infrastructure grocers have
    in place, making WIC benefits potentially redeemable on a uniform basis
    with other benefits accessed by standard EBT cards. Market forces may
    eventually bring about expanded use of smart cards, and at that time,
    the technology may become appropriate for a variety of debit
    applications. Unless and until that happens, however, promoting smart
    cards for WIC also requires committing to a substantial, almost
    exclusively federal expense.

    Conclusion
        There are many areas of state and local government that could
    benefit from greater use of debit and EBT cards. JPMorgan has even
    extended the government card concept overseas, replacing with debit
    cards the Social Security checks formerly sent to expatriated
    recipients in several countries, and the United Kingdom's former
    ``coupon-based'' system for government pension issuance to 4,000,000
    annuitants. Debit cards have proven their worth to government millions
    of times over in both day-to-day usage and under the most extreme
    emergency conditions.
        JPMorgan appreciates the opportunity to submit these comments.

         Statement of National Association of State Workforce Agencies

        The National Association of State Workforce Agencies (NASWA)
    appreciates the opportunity to submit written testimony addressing how
    technology is used to serve beneficiaries and taxpayers of public
    benefit programs under the Subcommittee's jurisdiction.
        The mission of NASWA is to serve as an advocate for state workforce
    programs and policies, a liaison to federal workforce system partners,
    and a forum for the exchange of information and practices. Our
    organization was founded in 1937. Since 1973, it has been a private,
    non-profit corporation financed by annual dues from member state
    agencies.
        The workforce development system has come a long way in offering
    services through automated systems. Externally, change is driven by
    consumer's expectations of modern service delivery, ever changing
    federal funding and legislative mandates. Internally, change is driven
    by Governors' e-government initiatives founded on providing private
    sector caliber services. Pressure is also exerted from the decline in
    the purchasing power of annual appropriations for workforce development
    programs and an increasing number of customers. These forces have led
    state agencies to embrace information technology (IT) modernization as
    an answer to providing improved customer service.
        Gone are the days of waiting in line to register for unemployment
    benefits, and gone are the days when workers and their families waited
    long periods for the arrival of their benefit checks. Unemployed
    workers now apply for their benefits online or by telephone; have their
    funds electronically deposited in their checking accounts (or receive
    payments on a debit card); and, register with an internet job bank to
    search for employment. Employers can register, calculate their tax
    liability, remit payments, and file their quarterly wage reports
    online.
        Although the workforce development system strives to continue
    improving services through IT modernization, annual under funding by
    the federal government limits states' ability to modernize fully. The
    result is states often are forced to develop a patchwork of systems
    rather than a comprehensive modern infrastructure. Illustrative of this
    patchwork are states with the latest automated customer interfaces
    supported by antiquated mainframe and storage capability. Other states
    have improved automated systems to assist workers, but cannot afford to
    do so for employers. While the examples of modernization provided below
    are indeed successes, they represent only part of how the workforce
    development system could transform services if sufficient and
    consistent federal funding were appropriated.
        Information contained in this testimony was obtained from workforce
    agency Unemployment Insurance Directors and Information Technology
    Directors. The testimony also used information collected by the
    Information Technology Support Center (ITSC)--a collaboration of the
    U.S. Department of Labor, Mitretek Systems, Affiliated Computer
    Services, Inc., and the University of Maryland. ITSC is supported by
    the U.S. Department of Labor. Finally, information was gleaned from the
    state submitted Performance and Capital Investement (PCIs) requests to
    the U.S. Department of Labor based on the Resource Justification Model
    (RJM).

    MODERNIZATION EFFORTS
        States have undertaken IT modernization in the UI Benefits and UI
    Tax Systems. Modernization of these systems involves a replacement of
    states ``core'' mainframe systems (which are obsolete) to more robust
    client-server systems. When possible, state workforce agencies
    undertake the redesign of both systems. At other times, they undertake
    development separately because of a lack of funds. A mapping of
    business processes and reengineering within the framework of the
    Governor's enterprise model and federal reporting requirements must
    occur before new e-systems are built. Some of the states engaged in
    comprehensive UI systems redesign are New Jersey, New York, Indiana,
    Illinois, Ohio, Pennsylvania, Kansas, New Mexico, Michigan, and
    Colorado.
        The Utah Department of Workforce Services (DWS) recently completed
    a total redesign of their UI benefit system. Utah's Comprehensive
    Unemployment Benefit System (CUBS) replaced a mainframe plagued by
    excessive maintenance costs, inadequate accounting systems, and
    antiquated technology. The system includes electronic workflow, imaging
    and expanded functionality for Benefit Payment Control (BPC) and
    Benefit Accuracy Measurement (BAM). Claims enter the system via
    Interactive Voice Recognition (IVR) application, Internet, or manually
    by customer service representatives (if the claimant is unable to
    complete the filing). Some decisions are automated (when no additional
    fact finding is required). The system, which went into production on
    January 1, 2006, generates and stores electronic documents and
    automatically creates workflow queues for adjudication, wage
    investigation and more. Benefit payments and adjustments are generated
    in real time and users are able to view results immediately. No paper
    checks are printed.
        California's Employment Development Department (EDD) is working to
    modernize their Internet initial and continued claims system. These
    initiatives will provide a self-service filing system for UI claimants
    that do not require staff intervention. This will allow claimants to
    view and select available appointments for adjudication matters,
    electronically deposit benefit payments, redesign thirty-year old
    payment and check printing programs, develop a claims activity database
    to improve EDD's reporting capability, and develop a claim registry
    database to store claimant banking information for the direct deposit
    option. These improvements will help protect the state's UI trust fund
    by reducing improper payments and fraud and abuse. Cost savings for
    both of these projects is projected to total $72,959,746 over a six
    year period.
        States are also creating various Internet applications for their
    employers, often incorporated into comprehensive UI Tax System
    modernization efforts. A sampling of employer focused Internet
    applications include: on-line employer registration systems to allow
    new employers to open their UI accounts--a total of 33 states are
    currently offering employer registrations services, while 15 states are
    in the development phase; Internet wage reporting systems to allow
    employers to report on quarterly wages of their workers; Internet Tax
    Reporting to allow employers to calculate their tax liability and
    complete necessary forms--a total of 38 states are operational with
    wage and tax reporting systems and another 11 states are in the
    planning and development phase; and Electronic Funds Transfer (EFT) for
    tax payments to allow employers to remit their tax liability to the
    state--a total of 24 states are operational, 15 are accepting credit
    cards and 4 states are in the planning and development phase.
        The Connecticut Department of Labor has built an Internet system to
    allow employers to register online for UI taxes, another to report
    changes in status, and another to file their tax returns, report wages
    and pay their UI taxes. It is in effect a suite of Internet services
    for employers. These systems make liability determinations and compute
    taxes due for employers. The information once completed is brought into
    an electronic document management system for storage and retrieval.
    Connecticut is also working to augment another tax and wage reporting
    system which allows employers who use commercially available payroll
    software applications to electronically file their UI and State Revenue
    Service returns together along with electronic payments. Currently this
    system works browser to server. Connecticut is modifying it to work
    server to server. These systems enable the state to meet national
    performance goals, register employers more timely and accurately,
    eliminate paper processing and reduce required number of staff
    necessary in the registration process. The total cost of the projects
    is estimated at about $1,000,000, while the total cost savings is
    $360,000 per year.
        In Nebraska the Workforce Development--Department of Labor replaced
    their Automated Tax Report Preparation and Calculation systems.
    Preparation of the UI Employer Tax Report includes somewhat difficult
    calculations of gross, excess and taxable wages paid, not just during
    the quarter but also on a calendar year basis. Web-based reporting
    tools automated the task, saving employers an estimated one hour for
    each report. In Nebraska, 15,226 reports were filed in the most recent
    quarter. By utilizing current technology Nebraska employer time-saved
    per quarter is 15,226 hours. Time saved annually totals 60,904 hours.
    Bookkeeping, accounting and auditing clerks in Nebraska earn an average
    hourly wage of $12.95. Thus, total employer savings from electronic
    filing of wage reports is estimated at $788,706 annually in Nebraska
    alone.
        The Oklahoma Employment Security Commission (OESC) is engaged in an
    effort to provide quicker and safer payment of funds and decrease the
    time processing checks via mail. The OESC is also building hyperlink
    capabilities to provide quicker access to employer information and
    better customer service. In addition, a planned Interactive Voice
    Recognition (IVR) Tax script would increase customer service and
    decrease ``live real-time'' customer support. Among many other
    functionalities it is enhancing the wage file to display wage source
    code, re-designing data entry screens to establish continuity and
    conformity, and re-designing the Employer Payment Plan to increase
    worker efficiency in research and processing data. The cost of
    implementation is $3 million, while cost savings will be $500,000 per
    year.
        Most workforce agencies also have implemented call centers
    (handling specific geographic areas) and virtual call centers (call
    centers linked to receive the next call in queue regardless of
    geographic location). Such centers offer initial and continued claims
    services, adjudication of claims, general help, and much more for
    beneficiaries and employers. Today, 47 states operate call centers--
    with nine states having one call center. In addition, 15 states are
    operating virtual call centers, while eight states are in the
    development phase. Many workforce agencies have implemented Internet
    systems for unemployed workers to apply for and manage their continued
    UI claims. These systems have reduced customer wait periods and payment
    problems. Most states report great popularity among customers for
    Internet based systems. A total of 43 states are operational with
    Internet initial claims systems, while 7 are in the planning phase. A
    total of 37 states are operational with Internet continued claims,
    while 10 states are in the development phase.
        Other technology-related work involves the use of Interactive Voice
    Recognition (IVR) within call centers and virtual centers to help
    offset staff costs and combat UI fraud. For example, the State of
    Washington redesigned its two IVR applications for the following
    business reasons:

          Implement fraud detection capability;
          Consolidate two IVR applications;
          Implement a ``One telephone number'' approach for
    customer service; and,
          Improve how calls are routed.

        The fraud detection-tracking tool saves and stores the telephone
    call details for each transaction made to the IVR. The call detail
    includes the telephone number used to make the call, the social
    security number (SSN), and the transaction type. This allow
    investigators to find cases of multiple telephone calls from the same
    phone number using different SSN's, calls from out of the country, and
    calls from collections companies illegally trying to obtain
    confidential information. In addition, it allows investigators to
    disprove or prove cases of alleged forgery.
        Other technology modernization includes imaging applications to
    reduce storage needs; SUTA dumping software implementation; record
    cross-match technology with the Department of Motor Vehicles, both the
    State and National Directory of New Hire, Social Security
    Administration, reemployment services technology, implementation of new
    emergency preparedness and disaster recovery processes, and replacement
    of older technology.
        In Idaho, the Department of Commerce & Labor envisioned replacing
    outdated laptop computers used for Unemployment Insurance (UI) tax
    work. The state had used these laptop computers for UI audits since
    1990 to implement its computer-assisted audit program (CAAP) designed
    around the UI audit process. Idaho anticipated the use of modern laptop
    computers would help it consistently meet the stringent Tax Performance
    System (TPS) standards, believing the $104,208 would result in a return
    on investment of $571,453. When the USDOL was unable to fund Idaho's
    Performance and Capital Investments (PCI) request, it invested its own
    state money (approximately $70,000). Many of the originally anticipated
    benefits have been realized.

    CUSTOMER SERVICE AND COST SAVINGS
        Newer systems ensure improved customer service by avoiding systemic
    failures that older automated systems often experience. New electronic
    benefit payment systems provide claimants faster access to accurate
    payments. In addition, new technology increases a state's ability to
    offer customers multiple self-service options. Claimants using the web
    to file their claims are able to view and understand their claim
    information online or they can print copies of their IRS 1099 forms
    (instead of requesting staff to prepare and mail forms). Employers also
    heavily use online access to information. By using current technology
    to provide more information on the monthly charge statements, employers
    can identify what type of charges they have, as well as the reason for
    any credits.
        The structure of current technologies is scalable and allows state
    agencies to respond quickly and fairly cheaply to legislative requests
    (e.g., UI extensions) and national emergencies (e.g., hurricanes), or
    other mandates. Current technology systems allow states to respond
    quickly to changes because the systems lend themselves to rapid
    development processes as a result of modular and object-oriented design
    architectures. Finally, current technology grants state staff access to
    accurate information and staff can therefore respond quicker to
    legislative, employer and claimant inquiries further improving service.
        IT investment in state workforce agencies' infrastructure results
    in cost savings to the taxpayer and improved service quality to
    beneficiaries and employers. Cost-savings result primarily from reduced
    fraud, error, and staff costs and enhanced service delivery efficiency.
    Employers also experience a substantial cost savings, stemming from
    improved compliance processes. Like cost, many aspects of customer
    service quality are impacted by investments in technology. Quality
    areas impacted include ability to avoid failure of automated systems;
    ability to provide self service options to the public; and ability to
    respond to legislative or other changes.
        On-line wage-reporting systems enable employers to submit their
    data electronically and quickly make information available to state
    decision makers. This facilitates accurate benefit payment decisions
    and reduces error rates. Newly implemented cross match technology
    improves detection of benefit overpayments and cost-recovery
    operations, and stops additional fraudulent payments. IVR technology
    associates telephone numbers to specific claims, helping identify those
    who fraudulently submit more than one claim from the same telephone
    number.
        New equipment is cheaper to maintain, but mostly new technologies
    save on staff time and associated costs. IT investments also positively
    impact reporting requirements. Aging technologies greatly complicate
    federal and state reporting. It is labor intensive to modify older
    systems to meet new reporting requirements. Over time, a vast array of
    specialized systems was created, many times using desktop applications,
    increasing the complexity of meeting consolidated reporting
    requirements. Further, the impact of technology investment on staff
    costs is substantial. Finding staff fluent in old technology is
    difficult and comes at a premium price. Training new staff in old
    technology is even more difficult and does not promote enterprise
    knowledge growth. New technology investment eliminates such issues.
        Electronic tax payment systems decrease state workloads by
    eliminating the need for labor intensive processes like opening
    envelopes, completing data entry forms, encoding treasury forms,
    preparing batch deposits, and transferring checks to bank accounts.
    Electronic benefits payment systems limit the number of outstanding and
    cancelled warrants to track, and save on banking fees and treasury
    charges. As customers increase their use of the on-line systems the
    number of phone calls and requests for assistance is also greatly
    reduced, generating more cost-savings. Finally, offering employers the
    capability of on-line account creation provides states more accurate
    information on workers and wages and requires less staff follow up.
        Employers benefit from IT investments primarily from improved
    automation of services and the need for less staff time to comply to
    state and federal program requirements. Electronic filing of wage
    reports saves employers' time in collecting employee wage data,
    completing forms, verifying data, copying, and mailings. Automated tax
    reporting systems simplify difficult calculations of gross, excess and
    taxable wages paid, again saving on time associated with bookkeeping,
    accounting and auditing clerks. Electronic tax payment curbs employer
    costs for check preparation, verification, mailing, staff and banking
    fees. Finally, on-line systems for establishing new UI accounts are
    less time consuming.

    THE NEED FOR SUFFICIENT FUNDING
        Secretary of Labor Elaine Chao stressed in her recent statement
    submitted to the House Labor, Health and Human Services and Education
    Appropriations Subcommittee a desire to improve the financial integrity
    of the UI system. NASWA supports this goal, but states are finding it
    increasingly difficult to accomplish. Since 1995, appropriations for UI
    state operations have not been adjusted for inflation. Although it is
    true the UI program operates more efficiently today than it did ten
    years ago, further improvements in program integrity and productivity
    are increasingly difficult to attain with marginal changes to out-of-
    date computer systems in many states, some of which are more than 30
    years old. Further, rising personnel and service costs without
    corresponding increases to federal level appropriations are forcing
    states to cut staff, reduce integrity efforts, and seek other sources
    of funding.
        To help achieve Secretary Chao's goal, NASWA has requested of
    Congress $3.023 billion for state administration of UI in fiscal year
    2007 and $100 million for computer system modernization. NASWA
    understands the pressures Congress faces as it confronts the task of
    cutting the federal budget deficit. However, we believe the performance
    of the workforce development system and the benefits of this investment
    warrant Congressional support.

                                                           Accuity Inc.
                                                 Skokie, Illinois 60076
                                                         April 18, 2006
        The following Statement is submitted for the hearing record and
    references the Hearing on the Use of Technology to Improve Public
    Benefit Programs dated April 5, 2006.
        Brent Newman on behalf of Accuity Inc. of Skokie, IL is submitting
    this Statement for the hearing record. Mr. Newman is a Managing
    Director of Accuity.
        Since 1911, Accuity has been the Official Registrar of the American
    Bankers Association U.S. Routing and Transit Codes, a role that
    requires it to assign ABA codes to every bank, credit union, and
    savings and loan. In its role as ABA registrar, Accuity is required to
    maintain up to date information on more than 110,000 bank, credit union
    and savings & loan locations across the United States. In a commercial
    capacity, Accuity provides the most comprehensive databases and
    software to assist financial institutions in processing electronic
    funds transfers and abide by U.S. banking regulations. As such, Accuity
    has earned a unique reputation as the trusted source for information
    about, and for, the banking industry. In addition to providing data
    solutions the Federal Reserve, the FDIC, and the Small Business
    Administration, Accuity manages a technology service to aid the SSA's
    SSI benefit program.
        Accuity strongly supports the use of technology to improve public
    benefit programs and clearly understands the challenges associated with
    determining eligibility based on the value of applicants' financial
    assets held at financial institutions.
        In September 2003, Accuity took on a contract to design, develop
    and operate a pilot program to replace the existing Social Security
    Administration (SSA), Supplemental Security Income (SSI) benefits
    application and re-determination approval process. SSI is a federal
    income-supplement program funded by general tax revenues and provides
    financial benefits to low-income aged, blind and disabled persons.
    There are approximately seven million SSI benefit recipients in the
    United States. Eligibility requirements are based on both income and
    current financial resources. For an applicant to be eligible for SSI
    payments, the applicant must not have financial asset resources in
    excess of $2,000. As part of the eligibility process, the SSA is must
    determine the total value of an applicant's financial assets held at
    financial institutions.
        Prior to the Accuity solution, the SSA's asset verification process
    deployed paper-based forms filled in with information provided by the
    SSI applicant. The SSA would mail an asset verification request form
    (SSA Form e4641) to the applicant's financial institution. Under this
    process, response time to the e4641 request form averaged between 30-60
    days while the financial institution response rate was varied from 10%
    to a rate less than 50 percent.\1\ When the financial institution
    response time exceeds 90 days, it is SSA policy to approve payments of
    SSI benefits to the applicant (with a re-determination performed after
    one year).
    ---------------------------------------------------------------------------
        \1\ Response times and rates are unofficial estimates received from
    SSA personnel. Prior to the Accuity Asset verification System, SSA had
    no system in place to track actual SSI program statistics.
    ---------------------------------------------------------------------------
        The stated goals of the SSA to improve the SSI Asset Verification
    Process were:

        1.  Increase the efficiency of the account verification request and
    response process
        2.  Maximize the financial institution response rates
        3.  Minimize the paperwork and paper flow through automation
        4.  Improve the applicant experience
        5.  Improve the ability to detect undisclosed applicant accounts
    and accurately verify financial assets thereby preventing overpayment
    of SSI benefits to ineligible recipients
        6.  Provide analysis tools to measure efficiency, effectiveness and
    cost of the financial asset verification process.

        The Accuity Asset Verification System included three main
    components:

        1.  A secure web-based application for processing asset
    verification requests and responses between the SSA and the financial
    institution;
        2.  A comprehensive database of registered financial institutions
    participating in the asset verification program; and
        3.  Geographic coding logic developed to maximize the detection of
    undisclosed financial assets

        Accuity designed, developed and implemented on February 17, 2004,
    an automated, secure, web-based application to facilitate the e4641
    asset verification request and response process. The application
    supports an automated paperless transmission of all asset verification
    requests from an SSA field office to the respective financial
    institution and the corresponding response from the financial
    institution back to the SSA field office. The financial institution is
    able to receive a request via an easy-to-use and secure online
    interface that will notify the financial institution immediately when a
    request has been submitted from the SSA. The information is provided as
    a form that emulates the current paper form used by the SSA. After
    retrieving the account information related to the SSI applicant, the
    financial institution enters the information into an efficient online
    form and clicks submit to instantly deliver it to the SSA.
        Application security for the Asset Verification System was designed
    and implemented to comply with SSA security requirements as defined by
    the United States Commerce Department's National Institute of Standards
    and Technology (NIST). The Accuity application and associated network
    have undergone independent security audits from two financial
    institutions (Citibank and Bank of America). Additionally, Accuity
    instituted a third party ``ethical hack'' test, performed by an
    independent leading industry organization (International Network
    Services). All three audits received positive opinions. Accuity's Asset
    Verification System has the capability to process millions of asset
    verification requests for the SSA. The application includes a robust
    analytics and reporting module that allows SSA to analyze volumes,
    trends, costs, and statistics on both a macro and micro level.
        The initial phases of the SSA project were rolled out to all SSA
    field offices in New York and New Jersey (a total of 120 SSA field
    offices and 1200 SSA field personnel). Leveraging our position as the
    official registrar of ABA U.S. Routing and Transit Numbers, and our
    unique relationships with all U.S. financial institutions, Accuity
    recruited and registered to the program approximately 80% of all
    financial institutions in New York and New Jersey (NY/NJ). There are a
    total of 10,325 unique financial institution locations in NY/NJ
    participating in the automated asset verification program. This
    includes 100 percent of the largest 25 institutions in NY/NJ. In many
    cases, Accuity worked closely with the larger institutions to
    consolidate multiple-branch processing of e4641 requests to a single
    centralized processing site, thus further streamlining the end-to-end
    process. Each e4641 request for asset verification can now be sent
    electronically from the SSA to an assigned representative at an
    assigned financial institution location. Instead of mailing a paper
    request form to a general financial institution address indicated by
    the SSI applicant, the request is now sent and received instantaneously
    through Accuity's Asset Verification System, instantaneously reaching
    the correct person at the correct financial institution location; the
    location and person directly responsible for processing asset
    verification requests. In all cases, Accuity's comprehensive financial
    institutions database drives the routing of all asset verification
    requests to the appropriate financial institution location and
    respective personnel within the financial institution.
        In addition to a standard request being sent to the financial
    institution designated by the SSI applicant, Accuity designed and
    implemented geographic-centric logic that allows the SSA to drive
    alternate request routing to institutions not defined by the applicant.
    The system searches Accuity's database, and routes alternate multiple
    sub-requests to financial institutions within certain geographic
    distance parameters from the designated institution. This process
    ensures that financial institutions within a reasonable proximity to
    the applicant's home are canvassed for possible undetected financial
    assets.
        The following results were achieved from Accuity's Asset
    Verification System:

        1.  Overall financial institution response rate of 96% versus
    previously experienced 10% to 50% rate
        2.  Average financial institution response time of 11 days versus
    30-60 days
        3.  In excess of 60% of all responses received in one week or less
        4.  A 40% decrease in the time required for SSA personnel to
    process a verification request
        5.  An 80% reduction in postage costs (a potential savings of $1.4
    million)
        6.  A 100% reduction in paper flow to and from the SSA
        7.  One of five asset verification requests disclosed an undetected
    account yielding potential annual savings through suspension of
    benefits. This detection of improper benefit payments has potential to
    yield annual savings in excess of $300 million dollars.

        Due to the successful results, SSA continues to expand the SSI
    Asset Verification System developed and operated by Accuity. SSA's
    stated goal is to expand the process on a national basis as they
    continue to study the overall SSI Benefits Program.
        The Accuity Asset Verification System has potential benefits for a
    myriad of government programs administered at both the federal and
    state level. This would include public benefit programs such as
    Medicare, Medicaid, Food Stamps and Child Care programs.
        Accuity's proven Asset Verification System can be implemented to
    assist other public benefit programs by providing the secure
    infrastructure to connect the government sector to the financial
    institution community. The Accuity system can allow federal and state
    agencies to simply and effectively provide external data matches for
    recipient and/or applicant eligibility determination.
        As Dennis Fecci, former Chief Information Officer, New York City
    Human Resources Administration, discussed with the Subcommittee in
    recent testimony, there are many challenges facing states and
    localities as they develop eligibility determination systems. The use
    of new technologies and data matches such as those perfected by Accuity
    can ensure that only eligible person receive needed benefits and
    significantly decrease improper payments and improve federal
    stewardship
        We appreciate this opportunity to inform the Committee's
    deliberations and would be pleased to provide any additional
    information regarding the Accuity Asset Verification System upon your
    request.
                                                           Brent Newman
                                                      Managing Director

             Statement of SAS Institute Inc., Cary, North Carolina
        Thank you Chairman Herger, Ranking Member McDermott, and members of
    the Panel for this opportunity to provide comments on ``The Use of
    Technology to Improve Public Benefit Programs''. SAS commends the
    subcommittee for beginning this important line of inquiry. The
    witnesses that provided testimony at the hearing raised important
    considerations with respect to how technology might be used to better
    deliver government services. We respectfully offer, however, that this
    is only the first part of the discussion, albeit an important first
    step. As described in greater detail below, technology can and should
    be used to help government decision-makers not only administer their
    programs more effectively and efficiently, but to ensure that their
    programs are being properly administered in the first place.
    Introduction
        With tight budgets and increasingly restricted resources,
    government agencies strive to work better, faster, and smarter. As
    noted in detail by the witnesses, technology can be used in a myriad of
    ways to help achieve this mandate. One example that was given was the
    use of ``smart card'' technology to ``better track'' services being
    provided to children. Technology increases the availability of this
    service data, yet the data alone and without context, actually provides
    little informational value. It cannot provide any insight into whether
    the program is serving its intended beneficiaries or meeting its
    program objectives, or whether the demands or requirements for the
    program may change under different future scenarios. We offer for
    consideration by the committee that the application of technology can
    provide robust answers to these questions and, by doing so, can help
    decision-makers make better programmatic decisions for the future while
    targeting and eliminating areas of fraud, waste, abuse, and improper
    payments. Just this month, GAO released a report discussing the need
    for coordination between federal and state governments to report on
    improper payments within federal programs administered by the state.
        While SAS has helped many agencies with data integration and
    advanced analytics for an array of business problems, in the essence of
    brevity, we have chose to focus our response on a few areas under the
    subcommittee's jurisdiction, including improper payments, purchase card
    fraud, and Medicare/Medicaid fraud.
    About SAS
        SAS Institute Inc. is the world's largest privately held software
    company; our vision is to deliver strategic value throughout public,
    private, and government organizations. We are the market leader in
    providing a new generation of business intelligence software and
    services that create true enterprise intelligence. Enterprise
    Intelligence optimally integrates individual technology components
    within your existing IT infrastructure into a single, unified system.
    The result is an information flow that transcends organizational silos,
    diverse computing platforms and niche tools--and delivers new insights
    that drive value for your agency.
        SAS solutions are used at about 40,000 sites, including 96 of the
    top 100 companies on the FORTUNE Global 500'. Working
    through its Government Operations division, SAS provides world-class
    solutions for civilian, defense, state and local government
    organizations. SAS software is used at all 15 U.S. federal departments,
    within all 50 states and at many local governments. For three decades,
    SAS has been giving customers around the world The Power to Know .
    Overview of improper payments, fraud, waste, and abuse
        Billions of tax dollars paid by hardworking citizens are lost each
    year due to improper payments, fraud, waste and abuse. Governments at
    all levels--federal, state and local--face the enormous challenge of
    rectifying this situation. They are under scrutiny by the President,
    Congress, state legislatures and taxpayers. Government agencies now are
    being held accountable for the misuse of funds originally intended to
    provide services and programs to citizens.
        This scrutiny is a primary driver for agencies to determine anti-
    fraud strategies. The call for accountability also requires that
    agencies consider and find answers to complex questions. For instance,
    how can the agency not only uncover fraud but stop fraudulent or
    ineligible payments before they are paid? Prevention requires a
    different strategy and process for predicting the likelihood that a
    transaction is improper or fraudulent. In addition, prevention is more
    cost-effective than recouping payments that have already been issued.
    The use of analytics can provide government agencies with the robust
    capability to prevent improper payments, and can also be utilized to
    help enforcement with recoupment once the payment has been made.
        What can agencies do to improve collection rates? How do they
    increase the productivity, effectiveness and efficiency of their
    auditors and investigators? By identifying a prioritized list of
    accounts that have a high likelihood of being fraudulent, agencies can
    optimize investigators' time and increase the funds collected. These
    are just a few objectives of an anti-fraud strategy.
        ``Building an Anti-fraud Strategy'' (this topic will be covered in
    a later section) discusses these tactics and other strategies for
    creating a comprehensive, continuous process to curtail fraud, waste,
    abuse and improper payments.
    Improper payments
        The Government Accountability Office estimates that $38 billion was
    lost to improper payments in 2005 alone. Eliminating improper
    paymentsis a key component of the President's Management Agenda. In
    fact, FY 2004 was the first full year of the Improper Payments
    Information Act (IPIA) implementation. The IPIA and the Program
    Assessment Rating Tool (PART) require agencies to identify and resolve
    improper payment and resource productivity issues or run the risk of
    budget cuts.
        Agencies are feeling the pressure of increased accountability for
    the misappropriation of funds.
        After all, this misuse depletes money from services and programs
    for citizens who rely on the government for help. With rising costs for
    programs and services such as healthcare and an aging baby boomer
    population, agencies are increasing spending and, thus, increasing
    their vulnerability to improper payments. In fact, for programs with
    estimated improper payments exceeding $10 million, agencies are
    required to report certain information to Congress including the causes
    of the improper payments, actions taken to correct those causes and the
    results of those actions.
        Many public and private entities in the states are responsible for
    administering federal programs that report on improper payments,
    including support for millions of low-income families, people on
    disability, those out of work and children who need medical care.
    Programs such as the Temporary Assistance for Needy Families (TANF) and
    the Child Care and Development Fund (CCDF) are administered by state
    agencies; these programs expend about $34 billion in state and federal
    funds annually. The GAO recently reported on the importance of
    minimizing improper payments in this area, but stated that the U.S.
    Department of Health and Human Services (HHS), which oversees these two
    programs, is hampered by a lack of adequate information on the internal
    controls in place within each state to identify and prevent improper
    payments.
        HHS programs are not the only areas where states determine
    eligibility and disburse funds, however. Another sizeable area for
    improper payments is unemployment insurance. The U.S. Department of
    Labor randomly reviews state unemployment insurance claims and
    estimates that
        2.5 percent of benefit overpayments in 2004 were fraud-related. On
    average, this is nearly a $5 million problem in each state.
    Purchase card fraud
        In 2001, the GAO testified and reported that significant weaknesses
    in internal controls made agencies vulnerable to fraud, waste and abuse
    due to inefficient purchasing actions. Since then, numerous GAO reports
    have cited agencies for inadequate control resulting in fraud, waste
    and abuse. The government is held liable for the value of each purchase
    card transaction. In addition, there has been steady growth in the
    amount charged to government purchase cards, from $1 billion in FY 1994
    to $16.4 billion in FY 2003, a 1,540 percent increase in just eight
    years.
        Although it is difficult to track compliance, agencies face the
    risk of a GAO audit and testimony of the audit's findings before House
    or Senate subcommittees. Thus, government agencies need increased
    oversight of purchase card management and the ability to quickly
    identify purchase patterns that indicate misuse, whether intentional or
    unintentional. Improved management tools, along with an overall program
    of polices, procedures, disciplinary actions and accountability, can
    lead to fraud deterrence and help to achieve a culture of compliance.
    Medicare and Medicaid fraud
        The GAO estimates that of the $1.7 trillion Americans spend on
    healthcare each year, between 3 and 10 percent is fraud-related. The
    National Health Care Anti-Fraud Association offers a similar estimate
    of between 5 and 10 percent. That amounts to a $51 billion to $170
    billion problem nationwide. At the same time, demand for Medicare and
    Medicaid services will only grow substantially with the aging baby
    boomer population. In addition, Medicare accounts for nearly half of
    the improper payments reported in FY 2004.
        Fraud, waste, abuse, and improper payments have plagued the U.S.
    healthcare system since its inception. These issues have caused
    substantial financial losses to states and the federal government. The
    result is that budget resources are diverted from citizens who rely on
    and expect healthcare and services. Meanwhile, ''bad actors'' are
    becoming more sophisticated and savvy with their techniques. More
    advanced fraud controls, better tools, and enhanced technology are
    needed to proactively and continuously uncover and deter these
    practices, prosecute offenders, recoup misdirected funds, with the
    ultimate goal of providing more and better services to eligible
    recipients.
        Each step in the complicated healthcare billing process is
    vulnerable to fraud, waste, abuse, and improper payments. Healthcare
    providers themselves have taken advantage of the system for illegal or
    unethical financial gain. For example, many cases have been found of
    overbilling, double-billing, or upcoding in order to bilk the system.
    Analytics can help government agencies detect and deter such behaviors
    by uncovering patterns of suspicious activities and predicting or
    forecasting future patterns and behaviors. It thus can provide agencies
    with a powerful tool to prevent improper spending before it occurs.
    What's Working
        Government agencies and commercial organizations around the world
    are working to detect and prevent fraud, improper payments, waste, and
    abuse. Below are two stories that describe a few of the challenges that
    real government and private industry organizations face and the best
    practices they apply to overcome a variety of obstacles.
    Case study: U.S. Offic eof Personnel Management
        One example of success in the federal government involves the U.S.
    Office of Personnel Management (OPM). The OPM Office of the Inspector
    General is responsible for conducting a nationwide program of audits on
    the more than 400 health insurance companies participating in the
    Federal Employees Health Benefits Program (FEHBP). The program serves
    more than 9 million federal employees and their families. The Office of
    the Inspector General's challenge is to determine which claims
    represent instances of fraud, waste or abuse. Using SAS, OPM identifies
    bogus claims or administrative problems in healthcare claims that
    result from illegal activities. As a result, OPM officials estimate a
    50 percent time savings; this in turn frees the auditors' time to
    perform other analyses.
        While this example describes how a government agency uses targeted
    technology solutions to successfully meet specific challenges, models
    of excellence in the fight against improper payments do not exist
    solely in the public sector, nor must they be confined to such targeted
    approaches. Both government and commercial organizations are applying
    complete solution packages that address the challenge of improper
    payments enterprise-wide.
    Case study: HSBC Holdings plc
        HSBC Holdings plc is one of the largest banking and financial
    services organizations in the world.
        With a credit and debit card portfolio of more than 100 million
    cards, HSBC is also one of the world's largest plastic card issuers.
    Each year, banks and financial organizations across the globe lose more
    than $2 billion to payment card fraud. The challenge for HSBC was to
    detect and deter rapidly evolving types of payment card fraud. In July
    2005, SAS and HSBC announced a long term partnership to transform the
    payment card fraud-detection market.
        HSBC will be rolling out the enterprise-wide fraud solution in all
    of its key markets, and it will become its key defense in the fight
    against credit card and debit card fraud. The major benefit for HSBC
    will be the significant reduction in fraud-related losses, while also
    lowering the overall cost of fighting fraud by having a common platform
    operating in all of its markets. By handling fraud in a faster, cleaner
    and more effective way, HSBC will be able to provide even better
    service to its customers because this approach is inherently customer-
    centric. Customers shouldn't have to experience any interruption of
    legitimate transactions; they will only realize the benefits of
    preventing those activities which are fraudulent. In addition to
    happier customers and earning the reputation of providing the most
    secure card in the world, HSBC's shareholders are likely to find the
    measurable results to be very pleasing indeed! For more information,
    read ``Fraud Detection: In real Time. Right Now''.
        This example describes how a commercial organization uses targeted
    technology solutions to successfully fight payment card fraud. The same
    technology solutions would be applicable within government agencies to
    detect and deter purchase card or travel card fraud and improper
    payments.
    Building an anti-fraud strategy
        The diversity of challenges and solutions represented in the
    examples of OPM and HSBC illustrates the fact that--when it comes to
    combating fraud, waste, and abuse--the anti-fraud strategy and
    technology framework that is applied must be flexible enough to address
    the unique objectives and business processes of each agency as well as
    the increasingly devious and evolving mechanisms that fraudsters
    employ. As fraud schemes constantly change, fraud detection requires
    continuous vigilance. The process and strategy for fraud detection need
    consistent monitoring and refinement. A wide range of approaches to
    combat fraud are needed--ranging from a variety of individual solutions
    that organizations can implement in an iterative manner for meeting
    targeted objectives to an enterprise-wide solution, such as the
    approach employed by HSBC, in which a customer receives a complete
    solution package.
        Regardless of the specific approach, it is imperative that agencies
    establish an analytical and business intelligence framework for fraud
    detection--an  enterprise intelligence platform. The enterprise
    intelligence platform is the foundation upon which organizations can
    implement other strategies and solutions. Once this platform is
    established, agencies can take the next step: extending specific fraud
    detection efforts to enhance operations across the enterprise through
    financial management and performance management solutions. By
    supplementing the enterprise intelligence platform with financial
    intelligence and performance management, agencies can tie together all
    the essential areas of fraud management and organizational management
    into a cohesive strategy for control, discovery, investigation
    prioritization and deterrence.
    The enterprise intelligence platform
        An enterprise intelligence platform includes several components, or
    steps, that serve as a proven framework to assist government agencies
    as they institute business strategies and technology solutions to
    eliminate improper payments, fraud, waste and abuse. The following
    steps in the framework are always evolving. For example, if the data
    analysis process discovers a new fraud pattern, new information about
    the pattern needs to be captured in the data for further use in
    analysis. However, by considering each component of the framework in
    terms of the individual capability it provides as well as how each
    component fits into a larger solution plan, government leaders can
    construct a comprehensive strategy.
    Improve data effectiveness
        Improving data effectiveness means giving government organizations
    a consistent version of the truth. This enables critical decisions to
    be made on accurate, concise, trustworthy information more efficiently
    and with less risk. Often, the most immediate challenge that agencies
    face is that data systems containing information relevant to fraud,
    waste, and abuse cannot share information with one another. This often
    results in an incomplete, inaccurate view of data that allows errors or
    fraudulent actions to ``slip through the cracks.'' By using data
    integration solutions along with sophisticated data matching and
    standardization routines that reach across multiple platforms and
    formats, agencies can create a single version of the truth so that the
    information upon which analyses and decisions are made is accurate and
    complete.
        Another essential step in reducing error and fraud is to verify the
    identity, eligibility, and authentication of payees. This ensures that
    the right people are receiving the right services. Using data quality
    solutions, organizations can standardize and augment data while
    identifying duplicate names, addresses and other identifying
    information, thereby validating key citizen information.
        This process of authenticating the citizen also reduces
    overpayments, underpayments, and duplicate billings.
        For example, North Carolina Department of the State Treasurer is
    using data quality to support the NCCash program, which was implemented
    to meet mandates for delivering unclaimed property dollars to often
    unsuspecting owners. This program requires accurate information to
    ensure funds are properly paid to citizens. Using intelligence
    solutions, the Department quickly matches names and addresses from
    different data sources and on different platforms for accurate
    identification and location of owners. For more information, read
    ``Forgotten, but not gone: N.C. state treasurer returns unclaimed cash
    using SAS ' Data Quality''.
    Visualize data and analyze outliers
        Using various visualization and analysis techniques, agencies can
    determine visual patterns and aberrations. Outlier analysis is often
    used to determine the ``low-hanging fruit.'' These are the obvious
    activities--such as billing for more than 24 hours in a day--that need
    immediate perusal.
        Next, it is important for agencies to monitor information to
    identify fraudulent activity. Once fraudulent activity is identified,
    agencies can institute business rules to prevent the fraud from
    recurring. Many agencies have business rules associated with documented
    fraud schemes. As part of the anti-fraud strategy, these rules can be
    automated and scheduled to run. They will flag cases that need
    investigative follow-up. In addition, agencies can analyze data across
    peer groups to determine abnormalities. For instance, physician-billing
    practices can be compared to physicians in the same field for the same
    diagnostic codes to determine unusual practices.
        Other techniques can add value in determining unusual patterns or
    practices. Sequence analysis and association analysis uncover events
    that tend to occur together or in sequence. Link analysis can identify
    relationships among citizens, organizations and services, thereby
    uncovering interactions that might need closer inspection. For example,
    link analysis can uncover personal injury attorneys who repeatedly send
    clients to the same clinics or doctors for diagnosis.
        All of these techniques mentioned above are integral parts of an
    ongoing, continuously improving monitoring process.
    Enhance audit and investigation effectiveness
        With analytical intelligence, fraud detection is taken one step
    further to improve audit and investigation effectiveness. A variety of
    advanced analytical techniques can be utilized depending on the
    agency's data. If the agency has not captured data surrounding known
    fraud schemes, then cluster analysis can used. This analysis determines
    unusual aberrations within the data. Once these patterns are uncovered,
    they need further scrutiny to deem them fraudulent or not.
        However, if an agency has documentation of known fraud patterns,
    then predictive analytics can be used to identify and predict future
    fraud risks. Agencies can ease the burden of validating false
    positives, maximizing recovery and prosecution while reducing
    processing time and recovery costs.
        Analyzing both structured and unstructured data with data mining
    and text mining respectively helps agencies to use both their
    quantitative and qualitative data to better identify fraudulent claims.
    By doing so, they are able to stop fraudulent payments before they are
    paid. Additionally, they can prioritize cases that appear to be
    improper for further investigation. Thus, agencies can rapidly detect
    new fraud schemes and patterns before they cause major problems.
        Once analysis has determined a likely fraud scheme, the next steps
    are audit and investigation.
        After fraudulence is determined, these new fraud schemes can then
    be incorporated into the known fraud business rules, as discussed
    previously. Then, the process begins again. Fraud detection is an
    ongoing, cyclical process of analysis and refinement.
    Spark insight with business intelligence
        A vital piece of developing an overall strategy to eliminate fraud,
    waste, and abuse is applying business intelligence (BI). BI empowers
    organizations to deliver insight to the right people, at the right time
    and in the appropriate form to help its people make effective decisions
    with greater confidence. This is instrumental when it comes to fraud
    detection, since inaccurate information or delays can leave agencies at
    risk. BI capabilities provide a flexible and extensible set of business
    interfaces to its information and supporting services, turning the
    information that has been collected and enriched into intelligence that
    it can quickly utilize. Whether an agency requires electronic
    distribution of reports, interactive query environments, content
    delivery via a Web-based portal, or publish-and-subscribe channel
    distribution, BI provides seamless access to reports and analysis,
    saving time and driving results for the agency.
    Financial management and performance management
        Agencies are not only concerned with detecting and deterring fraud.
    They also want to ensure that their processes are effective. In
    addition, monitoring expenditures allows for tightened internal
    controls on costs. Going beyond data analysis and analytics enables
    agencies to scrutinize financials and processes across the enterprise.
    Vigilance across multiple organizational functions and throughout the
    agency creates a culture of accountability, compliance, and deterrence.
    Optimize financial management
        The American public wants wasteful spending stopped. There is
    public outcry at reports of expenditures of tax money on frivolous
    items or preventable losses.
        With financial management, agencies develop a consistent approach
    to the spectrum of financial reporting requirements. This ultimately
    enables greater accountability and transparency and reduces public
    scrutiny.
        Financial management enhances the reporting and control environment
    with financial statements that enable agencies to receive a clean
    audit. By proactively managing risk, agencies can examine risk before
    complications arise. Early intervention in the cycle reduces the risk
    that funds will be misappropriated. Applying a financial intelligence
    strategy, the U.S. Department of the Treasury received its first
    unqualified or ``clean'' auditor's opinion on its department-wide
    financial statements in 2001. Since then, the agency has continually
    received clean audit opinions.
        Tightening internal controls is another way to reduce fraud--so
    much so that OMB has revised its Circular A-123 to include additional
    internal control measures for the federal government. OMB decided that
    some of the existing controls were weak. Furthermore, the influence of
    Sarbanes Oxley in the commercial sector prompted the agency to make
    significant changes to the circular.
        Therefore, it is highly likely that the Government Auditing
    Standards (the Yellow Book) for 2003 will be revised accordingly to
    incorporate requirements set forth in the revised Circular A-123.
        Once adopted, these new rules will greatly influence how government
    organizations manage and document internal controls. This renewed focus
    on an internal control framework is intended to ensure that control
    risk is mitigated, thereby reducing opportunities for fraud to go
    undetected.
        Agencies will have a clearer picture of how effectively funds flow
    throughout their organizations, where possible weakness or process gaps
    exist and who might be affected.
    Measure program performance and monitor fraudulent activity
        Incorporating a performance management strategy helps agencies
    monitor key performance metrics to determine program effectiveness and
    efficiency. This allows the agencies to define metrics in a dashboard
    environment and to monitor activities and threats proactively in order
    to curtail fraud. As a result, government leaders can identify sources
    of organizational failure and can isolate best practices that lead to
    success. A performance management solution provides a strategic heads-
    up that keeps organizations on course and stops fraudulent activity
    before it occurs.
    Fraud detection: An iterative process
        The management and control of improper payments and fraud requires
    an iterative process of constant, consistent monitoring. Each agency's
    unique culture and business processes require the implementation of an
    anti-fraud strategy that is flexible to meet both the variety of
    internal business processes and the ever-changing ways that fraudsters
    try to exploit those processes.
        In fact, there are various approaches to counteract fraud, waste,
    abuse, and improper payments, ranging from solutions for which agencies
    implement individual strategies in a step-by-step manner to address
    targeted challenges to an enterprise-wide approach in which agencies
    receive a complete solution package for solving a variety fraud
    challenges across the organization.
        No matter where the agency is in developing an anti-fraud strategy,
    leaders can identify and implement key technology components and
    solutions that allow them to use and augment current infrastructure
    resources and refine and monitor existing organizational processes to
    stop fraud, waste and abuse ``before'' money is lost.
    Summary and conclusion
        SAS is committed to working with government to ensure that
    hardworking taxpayers receive the benefits and services they deserve,
    when they need them. The SAS anti-fraud strategy curtails fraud, waste,
    abuse, and improper payments so agencies have the resources to fund
    programs, provide services to citizens, and ultimately judge whether
    these programs and initiatives are meeting their goals and are being
    administered effectively.
        SAS commends the subcommittee for the attention it has brought to
    the use of technology in enhancing service delivery. As a
    recommendation, SAS submits these written comments to stimulate further
    dialogue and consideration as to other benefits that technology can
    bring to bear--notably in ensuring that taxpayer dollars are indeed
    being spent wisely. SAS has a wealth of history and a record of
    accomplishment in using technology--notably enterprise-wide
    technology--to help reduce instances of improper payments by using data
    to predict, prevent, and deter unacceptable or ineligible behaviors and
    patterns. We would welcome the opportunity to provide more insight to
    the subcommittee as to our experiences, and commend to the
    subcommittee's attention a number of our white papers, including
    ``Combating Improper Payments, Fraud, Waste and Abuse: A Best Practices
    Approach for Government''.

                             Statement of Visa Inc.
        Visa appreciates the opportunity to submit this written testimony
    to address the important issues raised by today's hearing on the use of
    technology to improve public benefit programs.
        The Visa Payment System, of which Visa U.S.A. is a part, is a
    leading consumer payment system, and plays a pivotal role in advancing
    new payment products and technologies, including the growing category
    of prepaid cards. Visa U.S.A. is an association of 14,000 U.S.
    financial institutions who issue credit, debit and prepaid cards and
    who work with merchants to ensure the acceptance of these cards for
    transactions. Visa itself does not have relationships with cardholders
    or merchants.
        This is important for understanding the use of prepaid cards for
    government benefit programs. While Visa establishes the technical
    platform for the use of prepaid cards and the standards that enable the
    cards to be used at merchant locations and ATM machines, it is the
    financial institutions who work directly with state, local and federal
    agencies to issue cards to government beneficiaries. The terms and
    conditions of the issuance of the cards, including terms and conditions
    to the cardholders, are set by contracts between these financial
    institutions and their government agency customers. There are a variety
    of possible contractual relationships and a large degree of competition
    among financial institutions interested in serving this growing market.
    The prepaid Card Market
        The growth of prepaid cards is one element in the
    electronicifcation of payments. In December 2004, the Federal Reserve
    System announced that electronic transactions had surpassed checks as
    the consumer's preferred noncash method of payment. Fifty-five percent
    of these noncash transactions were completed using a debit or credit
    card, through an automated clearing house (ACH) transaction, or an
    electronic benefit transfer (EBT). The remaining forty-five percent of
    these transactions were made by check. The trend toward electronic
    payments is well underway.
        Prepaid cards can bring the benefits of electronic transactions to
    consumers who are unserved or underserved by financial institutions,
    that is, to those without a credit card or a checking or a savings
    account that can be accessed through a debit card or the ACH. Prepaid
    cards that access the same electronic payment networks as credit and
    debit cards can be used to meet the financial transactions needs of the
    unbanked in a highly efficient fashion. These prefunded financial
    services products are used to withdraw monies through ATMs, make point-
    of-sale debit transactions, pay bills, and transmit funds through
    account-to-account electronic transfers.
        Prepaid payment cards are a broad series of products which
    represent the expansion of choice and convenience in how consumers,
    businesses and the public sector make and receive payments. While the
    category started with consumer-to-consumer gift cards, it has expanded
    to include:

          A payroll card, direct deposit alternative to both
    employers and employees
          Disbursement of government benefits programs like child
    support, unemployment benefits and other social services
          Consumer management of benefits funds including flexible
    spending accounts (FSA) and healthcare reimbursement accounts (HRA)
          Corporate rewards, rebate, incentive or bonus programs

        Prepaid cards are different from both credit cards and debit cards.
    Credit cards offer consumers the ability to draw on a line of credit
    and pay their bills later--at the end of the month or over time. Debit
    cards provide customers with convenient access to their depository
    account to pay for purchases or to obtain cash at ATM machines. Prepaid
    cards provide customers with access to a pre-defined amount of money
    without drawing on a traditional banking account.
        The funds associated with a prepaid card are stored in a central
    location by the financial institution that issues the card. There is no
    value on the card itself. The card functions as an access device to the
    funds.
        In a face-to-face point of sale transaction, the card is swiped at
    a regular point of sale terminal. The merchant does not need to install
    special point of sale equipment, and no PIN number is entered. The
    transaction is routed over the Visa network, and is approved if the
    cardholder has sufficient funds to cover the purchase. ATM access is
    accomplished through the use of the card in conjunction with a PIN
    number. Visa prepaid cards are accepted wherever Visa debit cards are
    accepted--worldwide, online or offline.
        Some prepaid cards like gift cards are not reloadable. They are
    designed to be used until their value is exhausted. Other cards such as
    payroll cards or government benefit cards are designed to be reloaded
    on a regular basis.
        Visa estimates that the current market for all bank-issue prepaid
    cards (Visa, MasterCard and American Express) is less than $25 billion.
    The bulk of that is government benefit cards. The market is in its
    infancy now, but the potential growth over the next several years is
    likely to be substantial.
    Government Prepaid Card Programs
        Visa estimates that there are approximately 80 million underserved
    customers who receive about $1 trillion in wages and government
    benefits in the form of checks. This delivery method imposes
    unnecessary costs on the recipients and it is costly and inefficient
    for the entity disbursing the funds. The prepaid card is a way to
    improve the efficiency of this market.
        The first government prepaid card program was implemented in 2002.
    The program used a reloadable prepaid Visa card to disburse Child
    Support payments. The program was with the state of Colorado and the
    issuer was U.S. Bank. There are now 27 states that are using or are in
    the process of using a reloadable prepaid Visa card to disburse
    payments such as Child Support, Unemployment Insurance, Temporary
    Assistance to Needy Families and Payroll. See the attached chart for a
    current list of programs.
        States are quickly adopting this method of disbursing payments to
    underserved recipients because of the significant cost savings and
    increased processing efficiencies compared to checks (cost savings from
    postage, check handling, processing lost/stolen checks and paying
    caseworkers to track down recipients). Recipients also like the
    benefits of receiving payments via direct deposit to a prepaid Visa
    card compared to receiving their benefit in the form of a check. They
    receive faster access to their funds and do not have to worry about
    paying check cashing fees. Additionally, unlike cash, if the card is
    lost or stolen, cardholders receive a replacement card and are
    protected from unauthorized transactions with Visa's Zero Liability
    program.
        Visa estimates that there are about 2 million prepaid Visa cards in
    use by underserved customers through payroll cards, government benefit
    cards and general purpose prepaid cards. Visa issuing banks have issued
    about 1 million of these prepaid as part of government benefit
    programs, and about 600,000 of them are currently in active use by
    program beneficiaries.
        Overall a prepaid card program saves money for the state agencies.
    There are, of course, expenses associated with a prepaid card program.
    For instance, there are costs, which vary by program, for producing and
    mailing prepaid cards and educating beneficiaries on their use. The
    allocation of these costs is subject to the contractual agreement
    between the state agencies and the financial institutions issuing the
    cards. In some cases, the state agency does not have a direct payment
    for these production and distribution costs. The results from the
    existing prepaid programs show cost savings for the state agencies from
    the switch away from paper check delivery of benefits, even taking into
    account these and other costs of administering the program.
        Consumer protections can also be an expense of administering the
    program. The cards are protected by zero liability, and are subject to
    replacement if lost of stolen. But these costs are minimal. Fraud
    losses from government prepaid Visa cards are low and stable, averaging
    less than $.03 cents for every $100 of transactions. In Visa's
    experience beneficiaries are protective of their card; they like the
    benefits and convenience of receiving payment through this method. Visa
    has not seen a lot of instances of lost or stolen cards in these
    government prepaid programs.
    Benefits to Program Recipients
          Visa prepaid cards are accepted at merchant locations and
    ATM machines worldwide.
          Visa prepaid cards are Visa cards, and are subject to
    Visa operating rules and regulations, including all the Visa Consumer
    Protections.
          Zero liability applies. If a Visa prepaid card is used
    fraudulently, without the cardholder's authorization, the cardholder is
    not liable for the fraudulent transactions.
          Visa prepaid cards can be replaced if lost or stolen. The
    cardholder simply follows the normal procedure for notifying the
    issuing financial institution, and the old card will be canceled and a
    new one issued.
          Funds are available immediately after the card is loaded.
    There is no waiting period as there often is with check disbursements.
          Cardholder has the convenience, prestige and versatility
    of a Visa card. This is especially important to those who do not have a
    relationship with a financial institution.
          Cardholders have safer, less expensive access to their
    money. Those without a bank account do not need to go to risky, costly
    check cashing locations to cash their payroll or government benefit
    checks.

        Check-cashing costs are especially troublesome for the unbanked and
    one of the major advantages of prepaid government benefit programs is
    to enable unbanked beneficiaries to avoid these fees. They can be
    relatively inexpensive in some states such as New York State, where
    fees are capped at 1.5 percent of the value of the check. In some
    states, however, fee limits are much higher and in eighteen states no
    fee limits are imposed. In addition to check-cashing fees, unbanked
    customers will pay fees for bill payment services, money orders, and
    money transfer services.
    Benefits to Government
          Prepaid cards reduce costs. There are no paper checks to
    issue, or re-issue if they are lost or stolen.
          Funds disbursement is superior to paper check. The funds
    reach employees or beneficiaries in a faster, safer and more secure
    electronic fashion.
          Prepaid cards enhance risk management. Fraudulent use can
    be detected much earlier by sophisticated Visa fraud detection systems
    and those operated by the issuing financial institution.
          Prepaid cards provide better tracking and reporting of
    card use. This enables cardholders and government to understand the
    pattern of spending with the cards, thereby improving budgeting and
    other expenditure control systems.

                      State Prepaid Programs (as of 3/7/06)

                                       Program Status
         State             Use                           Issuer

    Alabama         Child Support      In rollout      Amsouth
    Alaska          Child Support      Implemented     JPMC
    Arizona         Child Support      Implemented     JPMC
    California      Child Support      In              BofA
                                        implementatio
                                        n
    Colorado        Child Support      Implemented     USB
    Iowa            Child Support      Implemented     USB
    Kentucky        Child Support      In              USB
                                        implementatio
                                        n
    Louisiana       Child Support      In rollout      JPMC
    Louisiana       Unemployment       Implemented     JPMC
    Maryland        Child Support      Implemented     BofA
    Massachusetts   Child Support      Implemented     JPMC
    Michigan        Child Support      In rollout      USB
    Minnesota       Child Support      Implemented     USB
    Nebraska        Child Support      Implemented     USB
    Nebraska        Child Care         Launch pending  USB
                     Credits
    Nebraska        State Employee     In rollout      USB
                     Payroll
    Nevada          Child Support      Implemented     JPMC
    North Dakota    Child Support      Implemented     USB
    North Dakota    TANF               Implemented     USB
    Ohio            Unemployment       In              USB
                                        implementatio
                                        n
    Oregon          Child Support      In rollout      USB
    Oregon          Unemployment       Implemented     USB
    South Dakota    Child Support      Implemented     USB
    Tennessee       Child Support      Implemented     JPMC
    Texas           Child Support      In              WFB
                                        implementatio
                                        n
    Washington      Child Support      Implemented     USB
    West Virginia   Child Support      Implemented     BB&T