INDIANA PRIVATIZATION PACT OF SYSTEM ADMINISTRATION FOR ELIGIBILITY TO RECEIVE FOOD STAMPS, MEDICAID AND WELFARE DRAWS QUESTIONS ABOUT COMPUTER SECURITY http://www.fortwayne.com/mld/newssentinel/news/local/15886447.htm

Feds reviewing potential $1 billion privatization pact
KEN KUSMER
Associated Press

INDIANAPOLIS - The state is on course to privatize by Jan. 1 the system of determining who's eligible for the food stamps, Medicaid and welfare received by one in six Indiana residents.

The Indiana Family and Social Services Administration on Oct. 20 sent the U.S. Department of Agriculture a copy of its unsigned contract with a team of contractors, Lawrence F. Rudmann, a spokesman for the USDA's Chicago regional office, said Monday.

"It's under review. We have 60 days to complete the review. We hope it get it done sooner than that," Rudmann told The Associated Press.

Under that timetable, the USDA could give FSSA the required approval by late December.

FSSA officials have said for months that they were negotiating with a single team of contractors led by IBM Corp. and AffiliatedComputer Services Inc. FSSA Secretary Mitch Roob has said the contract would be worth about $1 billion over 10 years.

The companies would process applications for the benefits that are received by about 1 million children and needy, elderly and disabled Indiana residents.

The potential deal has come under scrutiny because of problems that other states have had with similar contracts, and Gov. Mitch Daniels named a team of top aides from outside FSSA to review the need for outsourcing the services. Daniels in mid-June gave the review team additional time, but his office has not announced any updates since them.

Daniels spokeswoman Jane Jankowski said the review panel was continuing its work and had not yet made any recommendations to the governor.

"The team is seeking feedback before concluding its work and moving forward with a recommendation to Gov. Daniels about modernizing a welfare system that has failed," she said.

One recent problem in another state was the theft in Denver of an ACS desktop computer containing personal information of some clients of the Colorado Department of Human Services. ACS, a Dallas-based information technology company, sent letters to the affected clients alerting them to thetheft and advising how to protect their information, a spokesman has said.

Advocates for Indiana benefit recipients and for FSSA employees who stand to lose their state jobs in the change have criticized the pace of the outsourcing with, they say, little public input into a change that will affect so many people.

"The administration continues to push through this privatization scheme when they have yet to show any social or financial benefits from it," said David Patterson, a spokesman for council 62 of the American Federation of State, County and Municipal Employees.

The union still represents at least 5,000 FSSA workers even though Daniels canceled state collective bargaining contracts when he took office last year.

Council 62's executive director, David Warrick, send letters to members of the General Assembly last month asking them to intervene in the privatization.

However, should FSSA win the USDA's approval of the contract, the state agency could sign a contract before the legislative session begins in January. Under state contracting rules, the state must hold one public hearing before signing the contract, and the state has proposed timetables that show it completing a contract, holding the public hearing and awarding the contract over the span of less than one week.

Michael Reinke, executive director of the Indiana Coalition of Housing and Homeless Issues, said it was reassuring that the state was following proscribed steps for USDA review of the contract, noting the state of Texas had not done so with a similar contract last year.

Reinke also said the state should be open to changes suggested by USDA, which administers the federal food stamp program.

"I think it's going to be important that we are following all of the recommendations of the regional office in Chicago," Reinke said.

Noting the theft of the ACS computer in Colorado, Reinke said the contract, which has not been made public, needs to outline the computer security steps the vendors will take. He said the privatization will affect seniors, people with developmental disabilities and others who might be vulnerable.

"It would seem to me that the more places that you have where information could be lost, the more it will be lost," Reinke said.

ON THE NET
Family and Social Services Administration: http://www.in.gov/fssa

Indiana Coalition on Housing and Homeless Issues: http://www.ichhi.org