INDIANAPOLIS (December 27, 2006) - Governor Mitch Daniels signed an agreement today with an IBM-led team of partners to work with the state to help modernize the state's failing eligibility system. The agreement will utilize Hoosiers in state government and the private sector to provide administrative and technological support for the state's eligibility determination process. It is designed to improve services to clients, reduce errors, waste, and fraud, and improve the state's welfare reform record.

The Indiana Family and Social Services Administration (FSSA) and the IBM team are expected to begin implementation of the agreement immediately, and will begin to meet with employees in early January to prepare for the first step in the transition to the modernized solution, scheduled for August 2007.

"For taxpayers, a billion dollars of savings. For recipients, better service and a better chance to escape welfare for the world of work and self-reliance. For employees, better compensation and career prospects. For the Indiana economy, 1,000 new quality jobs. No decision we've made is more clearly in the public interest," said Daniels.

The state will save nearly $500 million in administrative costs alone over the next 10 years, and countless millions more as errors are reduced and federal penalties avoided.

According to the agreement, all final eligibility determinations for public assistance programs, such as Food Stamps, Temporary Assistance for Needy Families (TANF), and Medicaid, will remain with the state and be made by state employees. The IBM-led team will provide essential administrative and technological support to receive and process information necessary to make those eligibility determinations.

FSSA began exploring ways to improve the state's failing welfare system in early 2005. After many months of careful study and examination, FSSA issued a request for proposals (RFP) in March 2006, asking for outside partners to help the state meet its desired goals in welfare reform and system modernization. In May, the governor appointed an inter-agency review team to study the need for modernizing the system, confirm FSSA's determination that any reforms could not be achieved in-house, and negotiate the best and final offers for those bidders responding to the RFP.

The governor announced on November 29 that he had accepted the review team's recommendation to proceed with the modernization solution as revised and designed by that team, and the state received final federal approval of the proposal on December 18. Three different federal agencies within the U.S. Department of Agriculture (USDA) and U.S. Department of Health and Human Services (HHS) reviewed the proposal for over two months. The Centers for Medicare & Medicaid Services (HHS), the Administration for Children and Families (HHS), and the Food and Nutrition Service (USDA) have maintained active dialogue with the state since early 2005 on how to fix Indiana's failing welfare system.

The governor reviewed final documents, including comments made at a public hearing on December 8, before making his final decision to sign the agreement.