V _-...-I -- --- IJnif.ttd St,a.t,w Gt~l~t~ral Awtour~t.ir~g Of’l‘iw ~-__._ ..-I.--. -.-_(.--~-_I GAO -~ Iic3port to the I)irwt,or, W’f’iw 01’ Management and I3udget ’* A;,riI 1990 COMPUTER MATCHING Need for Guidelines on Data Collection and Analysis S 141142 I -- GAO/HRD-90-30 , United States GAO General Accounting Office Washington, D.C. 20648 Human Resources Division B-239066 April 17,lQQO The Honorable Richard G. Darman Director, Office of Management and Budget Dear Mr. Darman: This report discussesthe need for the Office of Management and Budget (OMB) to (1) work with federal agenciesto develop guidance on data col- lection and reporting for evaluating the cost effectiveness of the Income and Eligibility Verification System (IEW) and (2) coordinate that guid- ance with OMB’Sregulations for cost-benefit analysis under the Com- puter Matching and Privacy Protection Act of 1988 (P.L. 100-503). The purpose of IEVSis to reduce inappropriate payments made under certain benefit programs. IEVSrequires states to verify data provided by program applicants and recipients with Internal RevenueService (IRS) and Social Security Administration data, and to do so in a cost-effective manner. This verification process,which is automated, is often referred to as “computer matching.” IEVSwas established by the Congressas part of the Deficit Reduction Act, after a presidential commission reported that federal and state governments spent more than $4 billion during 1982 on ineligible claims or inappropriate payments by certain welfare programs. In 1988, the Congressenacted the Computer Matching and Privacy Pro- tection Act. This act requires cost-benefit analyses of computer match- ing efforts, such as state matching under IEVS,when a federal database is needed. Our review objectives were to determine whether states have data col- lection and reporting systems that allow (1) federal and state program officials to determine if the IEVSprogram is meeting its intended purpose of saving dollars and (2) state officials to make informed decisionson how to target their computer matching operations on areas where sav- ings are most likely to occur. A third objective was to determine whether IEVSdata collection requirements conform with the cost-benefit require- ments of the computer matching act. Without such conformity, states could be burdened with separate, and possibly duplicate, data collection and reporting requirements. (The scopeand methodology of our review are discussedin app. I.) Page 1 GAO/HI&D-90-30 Computer Matching C’ B239055 regulation, published in 1986, instructed the states to delay establishing their own IEVSreporting systems until detailed data collecting and reporting guidelines were issued by all three agencies.OMBdid not con- tinue to coordinate the development of IEVSregulations with the agen- cies, however, and each has since separately developed and issued additional regulations. Although these regulations contained varying requirements for cost-effectivenessjustifications, none of the issued reg- ulations covered the collection and reporting of data necessaryto pre- pare the justifications. In its January 1990 comments on our draft report, however, HHSstated that HCFAhad drafted IEVSrecordkeeping and reporting requirements that met its requirements for performance data. In addition to cost-effectivenessjustifications required by IEVS,the com- puter matching act requires states to provide information that will per- mit federal agenciesto assessthe benefits and costs of their matching efforts. The Congressincorporated cost-benefit provisions in the act becausethe cost effectiveness of computer matching had not been clearly demonstrated. OMBprepared and, in June 1989, published regulations implementing the computer matching act. These regulations included reporting require- ments. OMBofficials said the reporting requirements are general; how- ever, as states and federal agenciesbecomemore familiar with conducting cost-benefit analyses,OMBplans to increasethe require- ments’ specificity to improve data quality and consistency. As of February 1990, none of the federal agencieswe reviewed had Need for Uniform developed final guidelines for data collecting and reporting for the IEVS Data Collection and computer matching program. As a result, data are not available to (1) Reporting Guidelines assessthe effectiveness of the IEVSprogram, (2) develop strategies for focusing state resourceson areas where savings are most likely to occur, or (3) prepare various cost-benefit studies required by the program Annual performance reviews conducted by HCFAin 1987 and 1988, and a 1987 study by a managementconsultant under contract with HHS,found that most states had not collected sufficient cost and benefit data to enable (1) federal and state officials to assesswhether IEVShas been successfulin meeting its intended purpose or (2) state officials to make informed targeting decisions.For example, upon examining five states believed to be relatively advancedin IEVSimplementation, the consultant Page 3 GA0/HRD90-30 Computer Matding , 4’ E239055 they did not know if they would be involved in coordinating the IEVS requirements with the cost-benefit analysis requirements of the com- puter matching act. In its January 31,1990, letter commenting on our draft report, however, HI% stated that the group will develop uniform data collection and reporting guidelines for IEVSand the act. OMBofficials stated that if duplication is a problem, there may be a need to coordinate the data collection and reporting requirements for IEVSand the computer matching act, and that OMBshould be responsible for this coordination. Uniform data collection and reporting guidelines are neededfor the col- Conclusion lection of state data that will satisfy both the requirements of IEVSand the computer matching act. These data are neededto determine whether IEVSis meeting its intended purpose of saving dollars. The guidelines should also provide for the collection of information that will allow states to (1) assesstheir operations and (2) target their resourcesto areas where the greatest savings are likely to occur. We believe that OMB needsto work with the responsible agenciesto assurethat such guide- lines are developed. We recommendthat you work with HCFA,FSA,and FNSto develop uni- Recommendation form data collection and reporting guidelines that will satisfy IEVSpro- gram requirements and conform with the requirements of the computer matching act. These guidelines should also provide for the collection of information that will allow states to (1) make informed decisions about where to focus their resourcesand (2) conduct appropriate analyses of their program performance. OMBconcurred with our recommendation that uniform data collection Agency Comments and reporting guidelines be developed, and stated that an interagency work group should carry out this task and that it would assumea coor- dinating role within the group (see app. 11).OMBalso stated that it is developing additional guidance for cost analysis under the computer matching act. OMBfurther stated that the matching required by IEVSand the act should use the same criteria, and that it intends to promulgate a standard methodology to ensure that this happens. HHSagreed with the substanceof our recommendation (see app. III). It stated that the HCFA,FSA,and FNSinteragency income verification work Page 6 GAO/HRD4O4O Computer Matching . Page7 GAO/HRD-9030ComputerMatding l , Page 9 GAO/IiRMNMO Computer Matching . A&ndix II Comments From the Office of Management and Budget /-p** d ,&!q -,.y”ip fl< :i: EXECUTIVE OFFICE OFFICE OF THE PRESIDENT OF MANAGEMENT WASHINGTON, JAN 26 AND BUDGET 0 C 20503 1:__ Ms. Linda C. Morra Director Intergovernmental and Management Issues U.S. General Accounting Office Washington, D.C. 20548 Dear Ms. Morra: We appreciate the opportunity to comment on the General Accounting Office's (GAO) draft report entitled **Computer Matching: Need for Guidelines on Data Collection and Analysis (GAO/HRD-90-30)." As you know, the report recommends that the Director of the Office of Management and Budget (OMB) work with the Health Care Financing Administration, the Family Support Administration, and the Food and Nutrition Service to develop uniform data collection and reporting guidelines that will satisfy the Income and Eligibility Verification System (IEVS) program requirements and conform with the requirements of the Computer Matching and Privacy Protection Act of 1988 (P.L. 100-503, which is contained in the Privacy Act). The report further recommends that the guidelines should provide for the collection of information that will allow States to: 1) make informed decisions about where to focus resources: and, 2) conduct appropriate analyses of their performance with the IEVS program. In general, we concur with the recommendations of the report. We believa that requiring benefit-cost analyses for State targeting schemes is an important and sound first step in assessing the viability of the IEVS program as a whole. We further believe that the development of uniform data collection and reporting guidelines will enhance such analyses, and ensure that the information collected by the Federal agencies is useful. Our authorities under the Paperwork Reduction Act (44 U.S.C. Chapter 35) speak clearly on the need for such uniformity in Federal information policies and practices to the extent it is practicable and appropriate. We therefore, concur with the recommendation that uniform data collection and reporting guidelines be developed in this area. OMB will recommend to the affected agencies that the interagency income verification work group established for the purpose of developing such guidance be reactivated, and that OMB assume a coordinating role within Y this group. Page 11 GAO/~SO-30 Computer Matching Apdendix III CommentsFrom the Department of Health and Human Services DEPARTMENT OFHEALTH& HUMANSERVICES Ollioe 01 lnopeclor General W88hlngton. D.C. 20201 JAN 31 1990 Mr. Lawrence Ii. Thompson Assistant Comptroller General United States General Accounting Office Washington, D.C. 20548 Dear Mr. Thompson: Enclosed are the Department's comments on your draft report, "Computer Matching: Weed for Guidelines on Data Collection and Analysis." The comments represent the tentative position oi' the Department and are subject to reevaluation when the final version of this report is received. The Department appreciates the opportunity to comment on this draSt report before its publication. Sincerely yours, ,/ -\, / :$LL ilu L(.L.XJ Richard P. Kusserow Inspector General Enclosure Page 13 GAO/HRD-@O-30 Computer Matching 5239Oss The purpose of IEVSis to reduce lossesin the Medicaid, Aid to Families Background with Dependent Children, and Food Stamp programs by requiring states to conduct computer matches to help verify applicants’ eligibility for these programs. These programs are administered by the Health Care Financing Administration (HCFA), the Family Support Administration (FSA),componentsof the Department of Health and Human Services (HHS), and the Food and Nutrition Service (FNS),a component of the Department of Agriculture. The IEVSprocessbegins when a county or local caseworker forwards information collected from applicants to the state. After the information is entered into a master client file, the state sendsa computer tape to the appropriate federal or state agenciesfor matching. If, for example, a Medicaid applicant earned interest in an unreported savings account, the account and interest should be detected when the file is matched with IRSinformation. This is commonly referred to as a “hit.” IRSwill return a tape to the state, with the individual’s account number, the name and address of the financial institution paying the interest, and the year the income was reported. IEVSallows each state either to investigate all computer hits or to screen out those hits least likely to result in a changein a recipient’s eligibility status. If a state decidesto use a screening strategy, known as targeting, federal regulations require the state to support the decision with a cost- benefit analysis or someform of “reasonable” justification demonstrat- ing that the strategy will be cost effective. The state distributes the information obtained from federal agenciesto the appropriate county or local office for follow-up. Caseworker follow- up on the IRSexample cited would consist of determining whether the information was properly disclosedby the applicant. If it was not, the caseworker would investigate and make a decision about the recipient’s eligibility. “The Paperwork Reduction Act of 1980 makes OMBresponsible for approving information collection requests by federal agenciesand ensuring that the information is necessaryand will be useful to the requesters, Under the 1980 act and Executive Order 12291 OMBmay also eliminate duplication and inconsistenciesin federal data collection requirements. After IEVSwas established, OMBworked with HCFA,FSA,and FNSto develop a single implementation regulation for all three programs. This Page 2 GAO/HRD90-30 Computer Matching reported that due to a lack of information on program performance, targeting was arbitrary and subject to significant uncertainty. In a nationwide survey, states cited lack of coordination among federal agenciesas having a “major impact” on IEVSimplementation. This sur- vey, conducted by the American Public Welfare Association (a national association that represents state interests), criticized federal agencies’ inability to develop uniform expectations and requirements for the states. Our discussionswith representatives of state interests (seep. 10) and officials responsible for IEVSimplementation in three states, and our work at one state, also pointed to a need for federal guidance. As discussedabove, both IEVSand the computer matching act require states to provide cost and benefit data. Under IEVSstates are required to report these data to HCFA,FSA,and FNS.Under the computer matching act, states are required (effective July 1990) to report cost and benefit data concerning their IEVScomputer matching to IRSand the Social Security Administration. If HCFA,FSA,and FNSdo not take into account the reporting requirements of the act as they implement the IEVSpro- gram, states may be required to develop separate, and possibly dupli- cate, reporting systems. For example, states could be required to report cost information in different formats, based on different cost elements, or to use different methods for computing cost elements in satisfying the two reporting requirements. Although HCFA,FBA,and FNSofficials have stated that they want to mini- mize states’ reporting burden, little progress has been made to consoli- date the collecting and reporting of data to meet the requirements of IEVSand the computer matching act. We discussedthe need for uniform data collection and reporting guide- lines with officials from OMB,HCFA,F&X,and FNS.The HCFA,FM, and FNS officials indicated that they are aware of problems with the collection and reporting of cost-benefit data and of the need to coordinate their efforts. As a result, the agencieshave established an interagency income verification work group. The group was created to provide (1) a forum to discuss and help resolve IEVSissuesand problems common to the pro- grams and (2) a focal point that states can contact to raise issuesand problems common to the three programs. In October 1989, we met with representatives of this group and were informed that they had met only once and were still determining the scopeof their mission. At that time Page 4 GAO/HRD-90-30 Computer Matching B239066 group will develop uniform data collection and reporting guidelines for IEVSand the requirements of the computer matching act. HHScommented it expected OMBto assumean ongoing support and coordination role through its existing paperwork and regulatory review and approval process. As you know, 31 USC. 720 requires the head of a federal agency to submit a written statement on actions taken on our recommendationsto the House Committee on Government Operations and the SenateCom- mittee on Governmental Affairs not later than 60 days after the date of the report and to the House and SenateCommittees on Appropriations with the agency’s first request for appropriations made more than 60 days after the date of the report. Copiesof this report are being sent to interested Senateand House com- mittees and subcommittees,the Secretary of Health and Human Ser- vices, the Secretary of Agriculture, and other interested parties. Copies will be made available to others on request. If you have any questions regarding this report, you may call me on (202) 276-1666. Other major contributors to this report are listed in appendix IV. Sincerely yours, Linda G. Morra Director, Intergovernmental and Management Issues Page 6 GAO/HRD-90-30 Computer Matching Contents Appendix I Scopeand Methodology Appendix II Comments From the Office of Management and Budget Appendix III Comments From the Department of Health and Human Services Appendix IV 16 Major Contributors to This Report Abbreviations FNS Food and Nutrition Service FSA Family Support Administration HCFA Health Care Financing Administration HHS Department of Health and Human Services IEVS Income and Eligibility Verification System IRS Internal RevenueService OMB Office of Managementand Budget Page 8 Appendix I Scopeand Methodology To accomplish our objectives, we reviewed laws and regulations regard- ing the implementation of IEVSand the computer matching act. We obtained copies of (1) reviews conducted by HCFAheadquarters and regional offices on state compliance with IEVSregulations, (2) available independent studies on IEVSimplementation, and (3) studies that provide guidance on assessingthe costs and benefits of computer matching activities. We also visited Kentucky to observe how IEVSwas being implemented and to discuss additional collection and reporting requirements that might result from implementation of the computer matching act. Our review there included determining whether Kentucky was maintaining data related to the costs and benefits associatedwith computer match- ing efforts. We discussedthese matters with officials at HCFA,FNS,FSA,and OMB; state Medicaid and other public assistanceofficials in Kentucky; and representatives for state interests from the National Governors’ Associ- ation and the American Public Welfare Association. Much of our review focused on the collection and reporting of IEVSdata under the Medicaid program; however, IEVSand the computer matching act, and therefore much of the discussion contained in this report, apply to the Aid to Fam- ilies with Dependent Children and Food Stamp programs as well. Our work was done in accordancewith generally acceptedgovernment auditing standards between July 1988 and September 1989. Page 10 GAO/HRDBO-30 Computer Matching AppendlxR CommenbFrom theOfYkeofManagement and Budget With regard to computer matching and the provisions of the Privacy Act of 1974, as amended, OMB is in the process of developing a benefit-cost analysis appendix to guidance issued on June 19, 1989 implementing the Computer Matching and Privacy Protection Act of 1988. We agree that the matching that is required be IEVS and by the Computer Matching Act should use the same criteria, and it is our intention to promulgate a standard methodology to ensure that thir, happens. Again, we appreciate the opportunity to comment on this report. While we concur with recommendations presented in this report and offer our assistance in implementing them, we temper this concurrence with the recognition that the affected Federal agencies have the greatest incentive to ensure that guidelines are developed which are practicable and reasonable. OWR staff atands willing and eager to assist in the pursuit of a policy that is satisfactory to both the States and the Federal government. Sincerely, VJames E. MacRae, Jr. Acting Administrator and Deputy Administrator Office of Information and Regulatory Affairs Page 12 GAO/HlUMW3O Computer Mat&ing Appendix III CemmenteFromtheDepartmentofHeaUh and Human Servicea TS OF T-NT OF BEAU3.i AND lE%&B SERVICES ON m GENERAL ACCOUNT FOB These comments address the GAO's findings and recommendation on the need for uniform data collection and reporting guidelines that will satisfy both the requirements of the Income and Eligibility Verification System (IEVS) program for performance data, and of the Computer Matching and Privacy Protection Act of 1988 for cost and benefit analyses of State computer matches with Federal data bases. !aQ Recommendation : That the Director of OMB work with HCFA, FSA, and FNS to develop uniform data collection and reporting guidelines that will satisfy IEVS program requirements and conform with the requirements of the computer matching act. These guidelines should also provide for the collection of information that will allow States to (1) make informed decisions about where to focus their resources and (2) conduct appropriate analyses of their program performance. The Department agrees with the substance of the GAO recommendation. As the GAO report states, Department officials are aware of problems with the collection and reporting of IEVS cost-benefit data, and of the need for HCFA, FSA and FNS coordination regarding the development of uniform data collection and reporting guidelines which meet IEVS and computer matching requirements. To this end, FSA, HCFA and FNS have agreed to, and identified, a single coordinator to coordinate the activities of an interagency income verification work group which will address these problems and coordinate IEVS activities across the agencies. The coordinator is an FSA staff person, which is consistent with FSA's lead agency role in the State systems area. The work group members are representatives from FSA, HCFA and FNS program and systems areas. One activity of this interagency work group is to develop uniform data collection and reporting guidelines for the IEVS and the requirements of the Computer Matching and Privacy Protection Act of 1988. Prior to the formation of the work group, HCFA developed IEVS record keeping and reporting requirements which are in HCFA*s final clearance process and scheduled for issuance shortly. HCFA has agreed to participate with the interagency work group to amend their record keeping and reporting requirements for IEVS and to develop uniform interagency requirements that meet Page 14 . f Appendlrm CemmeatsFromtheDepartmentofHealth andHumanServicee -2- the additional requirements of the Computer Matching and Privacy Protection Act of 1988. HCFA currently has OMB approval to collect the IEVS record keeping and reporting requirements through April 1992. The interagency work group has held meetings to discuss the need for uniform standards, and subseguent meetings, including State representatives, are scheduled to begin the development of these uniform standards. Finally, we have had preliminary discussions with OMB regarding their support in the development of solutions to problems relating to the coordination of record keeping and reporting requirements for IEVS and the Computer Watching and Privacy Protection Act of 1988. We fully expect those preliminary discussions will lead to an ongoing support and coordination role for OMB through OMB8s existing paperwork and regulatory review and approval process. Page16 Appendix IV Major Contributors to This Report Donald R. Baiardo, Assignment Manager, (202) 623-9131 Human Resources Division, Washington, DC. Richard M. Johnson, Evaluator-in-Charge Atlanta Regional Laura L. Reiter, Staff Member Office Y (202681) Page 16 I”.- . . ..- l_--_l.l---- -----.-
Computer Matching: Need for Guidelines on Data Collection and Analysis
Published by the Government Accountability Office on 1990-04-17.
Below is a raw (and likely hideous) rendition of the original report. (PDF)