oversight

Federal Appropriations for State Legalization Impact Assistance Grants

Published by the Government Accountability Office on 1990-06-27.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                     United States General Accounting Offke               1 q/     6 7.
                     Testimony


                                                                            141673

For Release          Federal        Appropriations       for      State
on Delivery
Expected    at       Legalization           Impact   Assistance
IO-ZOO a.m.    EDT   Grants
Wednesday
June 27,    1990




                     Statement     of
                     Sarah    F. Jaggar
                     Director    for   Operations
                     Human Resources       Division

                     Before    the
                     Subcommittee      on Labor,
                        Health     and Human Services,
                        and Education
                     Committee      on Appropriations
                     United    States   Senate




GAO/T-HRD-90-43
                                                                                 GAO Form 160 (13/87)
                  SUMMARY OF GAO TESTIMONY BY SARAH F, JAGGAR.
               ON FEDERAL APPROPRIATIONS FOR STATE LEGALIZATION
                           IMPACT ASSlSTANCE GRANTS

The Congress       appropriated        $4 billion      to be spent      over a 7-year
period    to assist     states      in meeting     the costs     of services       provided
to aliens      granted    legal     status    under the Immigration          Reform and
Control     Act of 1986.         Federal    program      and administrative        costs     are
estimated      to be about       $500 million,       leaving    approximately        $3.5
billion     for state     reimbursement.          The administration         proposes      to
reduce    this    amount by $1.1 billion,            which will     leave    about    82.4
billion     to reimburse       states.

Almost       90 percent        of the federal           funding     will      go to five       states,
with    California          receiving        the largest        share.        Based on estimates
obtained        from these        five     states,      it appears         that    costs    may exceed
$2.4 billion.             However,       that    amount should           be sufficient         to cover
anticipated          drawdowns        for all      states     through        1991.      Drawdowns,
which     are the final           step in the process              of transferring           funds     to
the states,          typically        lag behind        expenditures.            While drawdowns
have increased            in the past          5 months from about              $436 million        to
$700    mill    ion,    they would have to increase                   at a much faster            rate    to
exceed       $2.4 billion         by the end of 1991.               Officials         from the five
states       GAO visited         said they do not expect                 to draw down funds bv
the end of 1991 exceeding                    the amount which would be allocated                       to
them under the administration's                       proposal,

GAO believes        that  given   the expected   level     of drawdown activity,
the Congress        could  take action    on the 1991 twdget        similar       to that
taken     last   year,    That is,    it could  move $53i million         of spending
authority      to 1992.      In the 199(i Appropriations       Act,    the Congress
moved $555 million         of 1990 funds     to 1992, and allowed          states    to
use those      funds t.o pay for cost,s incurred         in 1990 and t'uture
years.

GAO believes    that   decisions     about  rescinding      the $53i million       and
the $555 million     should      be delayed   until    next year's   appropriation
process,   when better      state   cost data are available.
Mr.      Chairman                  and Members                         of     the         Subcommittee:



I am pleased                       to      be here                    today          to       testify              on State                  Legalization

Impact            Assistance                     Grants                (SLIAG)                authorized                  by the              Immigration                       ,,

Reform            and        Control                  Act        (IRCA)             of        1986.              This         act,           as amended,
appropriated                       a total                  of    $4 billion                        for         fiscal           years          1988-92            to

be spent             over           a 7-year                     period             through                 1994.             These           funds         can       be
used         to    help            states              meet            the         costs            of      services              provided                t.o aliens

granted            legal            status               by       IRCA and                    to     cover             federal               program            and

administrative                           costs,                  Federal              costs               are      estimated                  to     be about

$500         million               for          the      duration                   of        the         program,               leaving

approximately                       $3.5          billion                    for      state               reimbursement.



In     its        1991        budget                  request,                the         administration                          proposes                to

rescind            $537            million              of        1991             funds            and all              of      the         $555        million           of

1992         funds           for         a total                 of     $1.1          billion                   (see      att.          I).          This

proposal,               if         adopted,                  would            leave             about            $2.4         billion              for      state

reimbursement.



In    April          1990,               you      asked                us     if      the          Congress               accepts              the

administration's                                proposal                (1)         can         expected                 state          SLIAG            program

demands            through                 1991         be met                and         (2)        will          all        allowable                  expenses

be covered                   through                  1994,             In         addition,                 Senator              Graham            recently

asked         us to           (1)          identify                    factors                that          prevented                states              from

drawilrg           down            SLIAG          funds,                and         their            impact;              and          (2)     determine

whether            states                will          use        all         the         funds             that         were        appropriated.


                                                                                          3
As requested,                       my remarks              today         will          focus         primarily                  on whether

$2.4        billion            will         adequately                meet        expected             state           program                 demands

through             1991,            Also,         I will          briefly              address          the          other           questions

that        have        been         posed.



RESULTS IN BRIEF



The        five       states          we visited,                  comprising                84 percent                     of      the

population                 applying           for          eligible              legalized             alien           (ELA)              status

and 88 percent                       of     SLIAG          allocations,                  estimate              they          will          incur

costs          of     about          $2.7     billion              through              1991     (,see         att.          II).              Thus,

costs          through              1991     in     these          five         states          alone          could             exceed            the

$2.4        billion            funding             level          proposed              by the         administration                           for         the
cillr;rt    ion       of      the     program.



Iiowt’\     tbr‘,     0111’    analysis             shows          that         states          have      been              slow          in    using

available               SLIAG         funds         and will              probably              not      draw          down more                   than

$2.4        billion            to     cover         expenses              before          the         end of           1991.               States

gave        two       primary             reasons           for       drawdownr              delays:                  (1)        as is          common

in        new programs,                   regulations                 and       guidelines               for      program

administration                      were      not       provided                to      them     until          well             after          the

program             began;           and     (2)      states           encountered                difficulties                            in

developing                 and       obtaining              approval              for     methodologies                          to      document
and claim               costs.             As a result,                   some prior              year          program                  costs         are


lDrawdowns       occur   after  a grant    award has                                             been made and the
recibient      requests     the transfer     of funds                                            to a state account                                   for
its    immediate     cash program     needs.
                                                                            2
still       being               identified                    and will                     be claimed                  in     later          years.



Given        the          expected                drawdown                     activity,                 the         Congress               could        take

action          on the                1991        budget                 similar                 to     the         adjustment               it     made last

year,           In        the         1990        Appropriations                                 Act,         the      Congress              moved          $555

million              of     1990           funds             forward                 to     1992,             allowing           these             funds          to     be

used       to        pay        for        program                 costs             for         1990         and      future          years.               We

believe              that         the           1991      budget                could             be reduced                  by $537              million             as

proposed              by the               administration.                                  The Congress                      could          take        the       same

action          it        took          last           year.              It         could            move          forward           the         $537      million

of      1991         funds            to    1992             for         states             to        use      for      program              costs           in    1991

and      future             years.                Further,                     the         $5.56 million                    already               appropriated

for      3992         should               not         be rescinded                         at        this        time.          Decisions                  about

rescinding                  the        $537        million                     and         the        $555        million             should          be made

during          next         year's               appropriation                             process,                 when we expect                      better

state       cost            data           to     be available.



Before          discussing                       the      specific                    results                of      our      work,          I would              like

to      provide             a brief               overview                     of     the         SLIAG           program.



BACKGROUND



In      1986,         the        Congress                passed                 IRCA             (P.L.         99-6031,               instituting                  a

major       reform               of        our     national                     immigration                       policy.              The purposes                      of

this       legislation                      are         to         (1)         reduce             illegal              immigration,                   (2)

allow       aliens               who meet                certain                    conditions                    to    apply          for         lawful
residency             in      the         United          States,         and         (3)         reimburse            state          and    local

costs     --up        to      the         federal          appropriations--for                               health,           education,

and public              assistance                  services             provided                 to    ELAs.          States          can     be

reimbursed              for         allowable              services             for         5 years            from      the     date

aliens         applied              for      residency.



SLIAG         funds        help           support          services             for         ELAs        in     three      major

categories:


         --           Public              assistance               - provides                cash,           treatment            services,

                      or      other          assistance              to       meet          the        basic      subsistence                or

                      health              needs      of      individuals.


         --           Public              health          assistance             - provides                    preventive

                      services,                  such      as immunizations                            and     testing          for

                      tuberculosis                   and      sexually                transmitted                 diseases,             that

                      protect              the      health          of    the         general            population.


         mm
                      Educational                   assistance                - provides                 elementary,

                      secondary,                   and     adult         educational                    services,             including

                      English              language           and civics                 instruction,                    to     help
                      eligible              aliens           function            in     society.



SLIAG         funds        available                for      state        reimbursement                        may also          be used            to

cover*program                  administration,                       conduct            outreach                activities,                 and

help     prevent            employer                discrimination                     against               ELAs.


                                                                          4
The     target            population                 eligible              for      benefits               and      services

includes            aliens            who entered                   the     United           States            prior            to     1982          (pre-

82s).         It        also         includes             special            agricultural                    workers                 (SAWS) and

replenishment                   agricultural                    workers,              commonly               referred                to    as

migrant            or     seasonal                farm     workers.



To be eligible                       for     services,               aliens           were        required               to      apply          to      the

Immigration                and Naturalization                              Service           (INS)           for       residency.

About       3 million                 aliens             applied           for      residency                (see        att.          III).           Of

this      total,           about            1.6      million              pre-82s           and        607,000           SAWS have               been

granted            residency                and nearly               55,000           pre-82             and       620,000            SAW

applications                   are         pending          final          action           by INS.                INS     re.jected             the

other       applications.



The Department                    of        Health         and Human Services'                               (HHS's)             Division               of

State       Legalization                     Assistance                   reviews           state          SLIAG         applications,

interprets                program            regulations,                   develops              policy            guidance,                  and

allocates               grant         funds          among          the     states,               It       allocates                 funds       based

on the       number             of         ELAs      residing              in     each       state           and on the                   estimated
costs       for         providing                 services.



SCOPE OF OUR WORK



We conducted                   work         in     California,                   Florida,              Illinois,              New York,                and

Texas,to            (1)        obtain             estimated           and         actual          SLIAG-related                       costs           by

program           category,                 (2)     determine               methodologies                      used       by states                   to


                                                                            5
estimate            costs,             and         (3)         identify              other     factors            that            could

significantly                  raise              or       lower          cost        estimates,                 Because                of    time
constraints                 and        the         fact          that      the        states        were         continuously

updating            their         cost            estimates,                we were            unable            to     verify               the      state

figures.              However,                we reviewed                    the       bases        state         officials                   used        to

prepare         these         estimates                        and HHS officials'                         rationale                for
reviewing             and     approving                        1988       through            1990     state            costs.                The
processes             followed                by state                  and HHS officials                        appear            to        be

reasonable.



We have         some concerns                            about          state         cost     projections,                       but        we do not

believe         they         have            a material                   impact         on our           conclusions.                        State
estimates             are     based               on       (1)      data         derived           from      cost            systems               that

are       evolving,            (2)           limited              empirical              data,        and        (3)         assumptions

concerning             utilization                        rates           and        INS adjudication                        decisions.                   As

a result,             these            estimates                  may change                 and    should             not        be considered

precise         forecasts                    of     future              costs.



ADEQUACY OF PROPOSED FUNDING THROUGH 1991



As mentioned                 earlier,                    the      administration                    proposes                 to    rescind

about        $1.1      billion                of         the      $3.5      billion            appropriation                       available               to

states        to      help        defray                 their          costs.           As a result,                   about            $2.4

billion         would         be available                          to     reimburse               states         for         SLIAG           costs

through         1991.             Based             on estimates                      obtained            from         the        five        states

in    our     review,             it     appears                  that      costs            may exceed                this


                                                                                 6
amount           (see             att.            II).                However,                  it      should            be sufficient                         to    cover
anticipated                    drawdowns                         for      all          states                through               1991.            Drawdowns,
which        are            the          final                step       in      the        process                 of     transferring                         federal

grant        funds                to        the          states,              typiC.ally                     lag      behind           expenditures.
While        drawdowns                        have             increased                   in         the      past        5 months                 from         about

$436       million                  to        $700             million              (see              att.         IV),       they         would           have          to

increase               at         a much                 faster           rate             to         exceed          $2.4          billion              by the             end

of       1991.          Officials                             from      the         five              states          we visited                    told         us they

do not           expect                  to      draw            down         funds                  exceeding             the       amount              which           would

be allocated                       to         them             under          the          administration's                            proposal                  through

1991.



Two factors                   help               explain                why states                       have         drawn          down only                   about            a

third       of     their                    1988          and          1989        allocations                        to      date         (see          att.         V).

First,           HHS did                  not            issue          final              regulations                     until           March           1988          and

guidelines                   for          claiming                     costs          until              October              1988.            States                believe

that       many         1988              c.osts               will       never             be documented                           because              systems

were       not         in     place                to          gather           much of                  the        data       needed               to     make

claims.            They                plan              to     use       any         funds              remaining                  from       their             1988
allocations                   to          pay            for         expenses               expected                  later          in       the        program.



Second,           states                  are            experiencing                       difficulties                       in      developing

methodologies                          to        identify                 ELA participation                                   in     state           and         local

programs           and             associated-costs,                                        In         June         1989,          HHS implemented                            a

computer           matching                        system               that         uses              either             Social           Security

numbers           or         alien               registration                         numbers                 to      document                costs


                                                                                            7
associated               with      serving          ELAs.                   HHS is           working          with        the         states          to

develop          other          acceptable            methodologies,                               such      as statistical

sampling,           for         use    in     claiming                     costs,            As a result,                 states          are

still         identifying              allowable                     costs          that         were      incurred              in     1988     and

1989.



FACTORS THAT COULD AFFECT STATE COST ESTIMATES



The     actual           costs        incurred             by the                five        states         through             1991      could

be different                than       estimated.                      Several               factors          could         cause         the

estimates           to      increase           or     decrease.                           For      example:


         --         The         Immigration                Nursing                  Relief          Act     of     1989          (P.L.         101-

                    238)         authorizes                states                to       use      SLIAG      funds         to        conduct

                    outreach             efforts                to         inform          the      ELA population                     about

                    health,            education,                     and        social            services          they         are

                    entitled             to    receive                 and          the      importance              of     identifying

                    themselves                as ELAs                 to     enable              states       to     seek

                    reimbursement,                         It         is     difficult                to    determine                 whether

                    these          efforts          will              increase               the     number          of     ELAs         seeking

                    services.


         --         INS had            not     adjudicated                          about          620,000         SAW applications

                    as of          May 1990.                    These            applicants                must      provide             proof

        *           of      agricultural                   employment,                          Providing            such         proof         has

                   been          difficult            for             many SAWS.                    Depending             on the


                                                                             8
     decisions               rendered                 and assumptions                       used         by the              states

     in     making           their          estimates,                  actual            costs          could           increase

     or     decrease.


--   About          35 court               cases         have          been       filed          by social                   service

     agencies           on behalf                   of    approximately                       75,000             to     100,000

     aliens          seeking               ELA status.                    These           aliens              contend           that
     they      were          unjustly               denied             lawful         status             for         a variety

     of     reasons            and         are      seeking             a remedy              through                court

     action.            If      these            aliens             obtain          ELA status,                      states

     could       obtain              reimbursement                      under         SLIAG             for      services

     provided          to       them.


--   Congressman                Bruce            A.      Morrison               introduced                    legislation

     (H.R.      4300)           that          would           extend            eligibility                    for      medical

     care      to     as many as 1.5                          million            dependents                    of     ELAs.

     Allowable               medical             costs          will         increase              if         this      bill

     becomes          law.



--   Under      IRCA,           to         obtain         permanent                residence                   status,           pre-

     82 ELAs must                    (1)     demonstrate                   a basic               understanding                       of

     English          and civics                    or    (2)          show evidence                     they         are

     making         satisfactory                      progress             towards               attaining                   such        an

     understanding                    by attending                      class,             Although                  there          is

u    no similar               requirement                     for       SAWS to            obtain              permanent

     residency               status,             states             estimate              that          some of              them


                                                          9
                     are         taking          English              and civics                 classes              and that          many         in

                     both         groups          will         enroll           in        additional                  educational

                     classes.                States            included              the         costs           of    these      classes

                     in     their          estimates.                   The        states             are        encouraging

                     continuing                  education              through                 outreach              programs          and

                     other          means.               If    ELAs do not                      enroll           in    classes          as

                    projected,                   costs         will      be lower                    than        estimated.



ADEQUACY OF FUNDING FOR 1992-94



States       believe              that      their             costs      will             eventually                  exceed      the        total

SLIAG      funds          appropriated.                        However,              it         is    difficult             at    this        time

to     accurately            estimate               funding             needs             for        1992-94.              States        have

only      recently           begun          to      project             costs             for        this        period.

Nevertheless,                the          $2.4      billion             proposed                 by the           administration                     for

the     duration            of      the     program             does         not          appear            to    be sufficient                    to

cover      costs          anticipated                   by the          states.                  We expect               better         state

cost     data       to      be available                      by next         year.                  Therefore,             we believe

any     decision            to      rescind             the      $537        million                 of     1991       funds      and        the
$555     million            of      1992         funds         should         be delayed                     until         next     year's

appropriation                process.




Mr.     Chairman,            this          concludes                my statement.                           I will         be happy           to

answer      anv       questions                  that         you     mav have.                      Thank        you.


                                                                        10
ATTACHMENTI                                                                                                   ATTACHMENTI

                                     SLIAG APPROPRIA'IlONSAND ADMINlSTHATION
                                         PROPOSALS--FISCALYEARS 1988-92
                                              (Dollars in thousands)

                              1988             1989            1990               1991         1992               Total

Original
  appropriations           $l,OOO,OOO $l,OOO,OOO $l,OOO,OOO $l,OOO,OOO                                        %4,000,000

Shift     in funds                                            <555,244>8                      $555,244*                        0

Proposed
  reductions        in
  funds                                                                       <537,403>b      <555,244,b      <1,092,64ii

Sequester                                                      <12,180>                                           <12,180>

Available                   1 ,ooo,ooo       1,000,000         432,5iG            462,59i                 0    2.895.173

Federal     costs             (71,500,        <101,500>       <l31,479>C      <161,500ic                  0      <465,979>


Total grants
  to states

Source:   HHS's Division          of State     Legalization     Assistance , and 1990 and 1991 budget
requests.

*The 1990 Labor,          HHS, and Education Appropriations  Act reduced the 1990 appropriation                           br
$555,244,000        and   appropriated this amount for 1992.

bThe administration's          1991 budget proposes to rescind             this     amount.

CHHS estimate        based on fourth     quarter      1989 allocations.




                                                                11
ATTACHMENT II                                                                                          ATTACHMENT II

                       PROJECTED STATE SLIAG                           COST ESTIMATES AND
                           ALLOCATIONS--FISCAL                            YEARS 198899b
                                  (Dollars   in                        millions)

                                                                                                      GAO
                                     Estimated               costs                               projected
State              1988            1989     1990                1991            Total           allocationsa

California         $152            $503            $689           $680         $2,024              $1,453

Florida                    7            18              22             19            66                189

Illinois                   6            22              33             34            95                102

New York                 64             58              82             78          302                 119

Texas              21              67              87             82               257                 274

   Subtotal            250             688          913            893          2,744               2,137

Remaining
  States"          34              94                125           122             374c                291

Total              $284            $782
                                   -VV        $1,038         $1,015

Source:        Projected           costs          provided         by state        officials.

aAllocations       are          GAO's pro,jections                  hased on the            administration's
proposed     funding            and each states'                   share of total            grant     funds        they
received     in 1988            and 1989.

bThese projected       costs   and allocations                                  are for the remaining
participating       35 states,    the District                                of Columbia,  and Puerto
Rico.       They are based on their       share                             of 1988 and 1989 allocations.

CTotals       do not      add due            to    rounding.

dTota1   does      not         equal     administration's                     proposed      funding         level    due
to rounding.




                                                             12
ATTACHMENT III                                                           ATTACHMENT III

                      LEGALIZATION APPLICANTS BY TYPE QF
                       +APPLICATION AND STATUS (MAY 1990)




           1500




           1000




            500




Source:     Legalization       Application        Processing   System,   Immigration
and Naturalization         Service.




                                             13
      .




                 ATTACHMENT              IV                                                                       ATTACHMENT IV
                                                           STATE DRAWDOWNSOF SLIAG
                                                        FUNDS AND GRANT FUNDING LEVELS


20
28
2.4
24
22
2.8
1.8
1.8
I.4
13
1.0
0.8
0.0
0.4
02
  0




          -        Sm~dmvdownolSLUGfutdaIhm~Jw#)
          w--     Drwdown8throughSpll991         UCUI’IW~~~~SIS~
          m       Currsnt funding level through Sept 91
          m m l m Abminirtretion proposal




                Note:          k'e estimated              clrawdowns    for the quarter   ending              June 1990
                using        the monthly               drawdown    rates    during the preceding               5 months.

                Source:            HHS's        Division           of   State        Legalization   Assistance.




                                                                                14
ATTACHMENT V                                                                 ATTACHMENT V

                               PER.CENTAGE OF 1988-89
                        ,dLIjOTMENT DRAWDOWNS (MAY 1990)


          70


          80


          80
                                     r
          40
                   r
          30


          20


          10




Source:    HHS's   Division   of   State        Legalization   Assistance.




                                           15