How Indiana lost control of its welfare system


Privatizing of the states social services was created primarily to save the taxpayers’ money. The pact concerned IBM and the State of Indiana; IBM was run the management of the state’s welfare work. The deal was worth $1.3 billion and was sealed by Mitch Daniels, the governor in December 2007. The Governor promised that the privatization of the Indiana’s State welfare and the food stamp programs could reduce the taxpayer’s burden by saving $1 billion in the next decade

The new system aimed to rectify several areas of control, the primary area of concern was to be the financial aspect, the new system sought to provide reprieve to taxpayer by reducing their workload. The arrangement expected to cut the taxpayer load by $ 1 billion in the year that was to follow. Another area it was to take charge in was the call centre section; this entailed the handling of calls from the applicants of social services issues. Lastly the handling of the workload was another area, the system was to handle approximately a third of all the state’s welfare burden and which included handling of the food stamp programs.

The fresh system brought several transformations in the FSSA. The changes had an effect on the financial, structural and strategic areas of the welfare set up. Financially, the welfare was working too hard to save on finances hence ended up denying the citizens the services they required. Structural changes came when the IBM was to take over the running and management of about a third of the State welfare caseload. More to that the call centre docket was to be handled by Affiliated Computer Services (ACS) a business process outsourcing based in Dallas, the ACS was hired by IBM after the takeover to handle calls from applicants of social services. Lastly effects on the structural aspect came when individual caseworkers were done away with.

Strategically changes that came up due to the new system were the methods of storing household records. Previously, the caseworkers stored them electronically and they could be accessed by all case workers who were located all across the state. The personal contact that existed could no longer be possible. The new system did away with the conventional system of face to face operations and introduced applications from home. However the application was to be carried out online or through the telephone.

In operations control a lot of changes occurred, both IBM and ACS. According to George Thompson who used to work for a call center agent with ACS, the group did not pay its workers and for that reason its operations were hindered as the workers stopped their services to residents of Indiana. He added that ACS was just in the contract just for money and that the situation was worse because the training of the call center agents was very haphazardly done. The state of the operations of ACS was emphasized by Angie Connaught another former employee. Angie said that the managers of the call center lacked experience.

In effort to conduct screening control ACS started to hold the residents for long on phone. The screening mechanism in the fresh system was a mess. IBM in hiring of ACS to run the call center failed to screen them adequately for experience and efficiency, the result was poor service delivery. Applicant’s document with their details were misplaced and lost resulting in disastrous outcomes for some of them.

IBM and ACS moved to curb the inefficiency which was being experienced by Indiana’s FSSA; however their bureaucracy in the issuance of the benefits saw the collapse of the system. They used to disallow services to their clients mentioning lack of cooperate as the reason. According to Medicaid and federal rules do not recognize failure to cooperate as a reason to dismiss claims.

In reference to characteristics of effective control the privatization failed in various aspects. Firstly, the economic feasibility was not realistic; the strategic placement was not effective while the corrective action did not improve the situation. Lastly the accuracy of the project was wrong from the planning phase (Deming, 29)

State human services Chief Mitch Rob said most of the problems are not new and have long plagued the state’s application process for the food stamps, Medicaid and other benefits received by 1.1 million people.

Before the onset of the new system of the Indiana FSSA, a number of problems weighed down the sector. The problems were mostly experienced in the application process of the state’s food stamps, the Medicaid and the other benefits the people were supposed to have. According to Rob Mitch who was the chief of Human services in Indiana, the issues were not new and had been around for a long time (Problems noted as FSSA privatization begins, no page)

One of the prevalent situations prior to the privatization was lack of direction by the staff in regard to specific processing guidelines that were to be used by the different public assistance programs. The workers were confused and did not know what to do. (Indiana Public Benefits Eligibility System)

FSSA’s chief Robb also acknowledged that there existed a major staffing problem; he added that the problem was there when the caseworkers got employed by the state instead of ACS. According to him the problem was due to existence of alternative job opportunities to the caseworkers in other large cities. The problem was noted in lesser levels in the regions of Evansville, Fort Wayne, South Bend and Gary areas. Greater delays were experienced in the processing of food stamps the release of welfare payments which were referred to as “Temporary assistance for Needy Families. (The Unequal State of America, 1)

According to Food and Nutrition Service, the Agency that monitors the running of the food stamp program, they said that caseloads had great variations in various counties. In the report they had examined access to customer service and the program which was conducted in 10 counties in northern Indiana counties which spanned several days. The examination had taken place in the initial transition period which began March 19.

Before the era of privatization, instances of failure to follow the guidelines provided by the federal government and the state government in dealing with applications for food stamps were rife. The federal noted that the requirements set were not adhered to appropriately. These issues were said to have been taking place for over a decade and was one of the reasons that called for the privatization. (Problems noted as FSSA privatization begins)

The privatization came was embraced but faced numerous shortcomings and in 2009, it was cancelled. After the failure of the privatization idea, the successful elements were adopted and also combined with the positive elements from the traditional system used before the privatization. The combination came up with a revised system which was a hybrid of public and private elements. The system moved from the fully privatized method and saw some of the factions back to the state government (David Rohde and Kristina Cooke, 1)

The hybrid system included retention of the conventional face to face interaction between the clients and the caseworkers. Negotiations continued between the Indiana State and the main subcontractor who were ACS who were mandated with the duty of modernizing the FSSA system (Indiana Public Benefits Eligibility System, 1)

In an interview with the Governor Daniels, the success of the hybrid system was exposed. Daniels said that the revised system’s statistics pointed towards timelines and the accuracy of the benefits having improved. Some recipients were said to have concurred about the efficiency of the new system saying it was better than compare to the initial revamp. However not all have been convinced by the new system and continue to be confused by the new process and the eligibility rules

Some privately managed and run call center the efficiency has been found to have improved tremendously. The center which handles clients who call during benefits application process. the center has a set a time target to handle each case at 12 minutes, the company says that each company call center agent approximately 35 to 50 cases. However one call center agent confessed that the work pressure sometimes resulted in the people not being handled appropriately.

Works cited

David Rohde and Kristina Cooke, The Unequal State of America: Indiana’s rocky road to welfare reform, 20 Dec. 2012. Web. 2 Dec 2013. <>

Deming, Robert, Characteristics of an effective management control system in an industrial organization, 1968, Boston: Division of Research. Print.

Griffin, Ricky, Management, 3rd Edition 1990, Boston: Houghton Mifflin Co. Print.

“Problems noted as FSSA privatization begins”, no page 2000. Web. 2 Dec. 2013 < >


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