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Tuesday, July 07, 2009

Ind. Gov't. - "State puts IBM on notice over welfare deal" [Updated]

The AP is reporting:

A top Indiana official says the state's privately run welfare project has so many problems that Indiana could begin taking steps to cancel its $1.16 billion contract this fall.

Family and Social Services Administration Secretary Anne Murphy says she asked lead vendor IBM Corp. to prepare a “corrective action plan” as part of a process that could result in canceling the 10-year deal if

Murphy says the state wants IBM and its partners to succeed. IBM spokesman Jim Larkin says the company is working aggressively to make changes.

Lawmakers and clients say the project has led to lost documents, slow approvals and severed eligibility for Medicaid and food stamps.

Texas canceled a similar project in 2007.

For context, be sure to see this May 13, 2006 ILB entry quoting earlier AP stories by Ken Kusmer. For more, see this long list of ILB entries found by searching for "welfare privatization."

[Updated] IBJ has the entire, still unattributed, AP story here. It concludes:

Daniels has said repeatedly that he inherited one of the worst welfare systems in the nation and has made the IBM deal one of the hallmark initiatives of his 4½-year-old administration. When Murphy, shortly after becoming FSSA's chief in January, told him how many problems the project had, he became personally involved.

"I took it to the governor and I showed him the data, and he called the executives at IBM and ACS and told them that they needed to make changes," Murphy said.

Daniels had signed the contract in December 2006, saying it would give Indiana taxpayers "a billion dollars of savings" and serve welfare recipients better. "No decision we've made is more clearly in the public interest," he said at the time.

However, critics wary of seeing similar problems to those in Texas already were condemning the contract. In Washington, Sen. Tom Harkin of Iowa and Rep. Henry Waxman of California, both Democrats, raised concerns in letters to then-U.S. Agriculture Secretary Mike Johanns, whose agency oversees the food stamp program.

Also criticized were ACS' ties to Murphy's predecessor, Mitch Roob, a former executive at the Texas-based technology vendor. Under the Indiana contract, FSSA outsourced 1,500 of its employees in 2007 to ACS to operate call centers and perform other tasks.

Roob left FSSA in January to take over Indiana's economic development efforts, and Murphy, his deputy secretary and chief of staff, rose to FSSA's top job. After reviewing data on the welfare project, she decided to halt its rollout and go to the governor.

"It was apparent that there were a lot of problems," she said. "I just told him I was surprised at the level of problems with the project and that it was going to take a lot of work to correct it."

Posted by Marcia Oddi on July 7, 2009 12:42 PM
Posted to Indiana Government