Home > Federal & State Reporting Systems > Federal Guidance > State Systems APD Guide

Chapter IV: APD Updates

There are two types of Advance Planning Document Updates (APDUs): Annual APDU and As-Needed APDU. These documents are reviewed in conformance with the standards to the right. (Note that the last three standards apply to post-implementation updates.)

Unlike APDs which require prior written approval, APDUs simply require written approval. APDUs may be submitted after the incident requiring the update has occurred. However, submission does not necessarily mean approval will be granted.

Back to Table of Contents

A. Annual APD Update

Annual APD Updates are used to report annually on the status of the project, request additional funding, and report post-implementation costs and benefits.

They are prepared by the State and submitted to HHS 60 days before the anniversary of approval of the Planning APD, Implementation APD, or system certification¹⁴, for all enhanced funding and for regular funding when the thresholds and conditions set forth in 45 CFR 95.611(b) apply. See Exhibit IV-1 below.

The purpose of the Annual APDU is to allow both the State and HHS to assess the status of the project, in terms of past performance and future plans. Since HHS usually provides funding on an annual basis, the APDU also serves as the State's request for continued or additional funding.

Exhibit IV-1: Annual APD Updates: Written Approval Requirements
[45 CFR 95.611(b)]

The Annual APDU includes the following sections:

• References to the approved APD and all approved changes,
• Project status report,
• Revised Project Management Plan,
• Revised project budget,
• Cost allocation/distribution changes, and
• Actual costs and benefits (once the system is operational).

The requirements for these sections are described below.

1. References to the Approved APD and All Approved Changes. The State provides a brief summary of the history of the APD process, summarizing the submission and approval of the Planning APD (if applicable), Implementation APD, and APD Updates (whether Annual or As-Needed). If the system has been certified, the date of certification is indicated. HHS uses this information to quickly become current with the State's project status and immediate needs.

2. Project Status Report. The State reports on the status of the past year's project tasks and milestones, addressing:

   • Task completion,
   • Task extension, and
   • New tasks, previously unanticipated.

   In addition, if the State has encountered or anticipates problems or delays, an explanation should be provided. Slippages should be discussed in terms of causes and effect on the overall implementation schedule.

   This section answers the question "Is the State's progress acceptable?"

3. Revised Project Management Plan. The State provides an updated Project Management Plan, reflecting the project changes summarized in the preceding section and including an assessment of the impact of significant changes on the projected system breakeven.

   This section answers the question "Will schedule changes affect system breakeven?"

4. Revised Project Budget. The State's revised project budget consists of:

   • An accounting of expenditures for project development over the past year,

   • An explanation of the differences between projected expenses in the last approved APD or APDU and the actual expenditures for the past year, and

   • A revised projection of total project costs and an explanation of significant (10% or greater) increases.

   This section answers the questions "How do budget changes affect system breakeven and HHS' programs?" and "Is the investment still sound?"

5. Cost Distribution Changes. The State reports any approved or anticipated changes to the cost allocation methodology.

   This section answers the question "How do changes in cost allocation methodology affect HHS' programs?"

6. Actual Costs and Benefits. During system operation either on a pilot basis, phased approval, or final approval the State continues to measure and begins to report actual costs and benefits realized from the system. Provisions in 45 CFR 95.605 require each State to submit a report which "compares the estimated cost-savings from the State's approved APD to actual cost-benefits to date." Note that the State compares actual expenditures and savings to costs and benefits projected during the Planning Phase for the selected alternative not the new system to the old (status quo).

The objectives of measuring costs and benefits are to:

• Determine if predicted costs and benefits are being realized;

• Identify unanticipated costs and benefits;

• Calculate the effect of the actual costs and benefits (whether predicted or not) on the cost-effectiveness of the system design, development, and implementation; and

• Enable management to take appropriate action.

ACF's Feasibility, Alternatives, and Cost/Benefit Analysis guide provides detailed instructions in Chapter 5 on measuring actual costs and benefits. In addition, worksheets are provided to assist States with these reporting obligations, and examples are published in ACF's Companion Guide: Cost/Benefit Analysis Illustrated. States should follow the approach in ACF's guides to measure actual costs and benefits.

If the actual costs and benefits vary significantly from the costs and benefits projected during the Implementation Phase, the State must explain why, initiating corrective action as required.

The State reports on the operational system until HHS determines that projected benefits or cost savings have been achieved which should occur within two to five years after implementation.

Each State should be aware that HHS will closely monitor these reports on actual system costs and benefits and should prepare the information with rigor and discipline. HHS advises that the approach in the Feasibility, Alternatives, and Cost/Benefit Analysis guide be used.

This section answers the questions:

• "Are projected program performance, cost, and benefit goals being realized?"

• "Has the State initiated corrective action in the event costs are higher or benefits lower than projected?"

• "Has the system reached breakeven? Is further reporting unnecessary?"

Back to Table of Contents

B. As-Needed APD Updates

As-Needed APD Updates are used to:

• Report and receive HHS approval for additional funding,

• Clarify project information requirements as an approval condition of the Planning or Implementation APD, and/or

• Report and receive HHS approval for significant project changes,¹⁵

In addition, As-Needed APD Updates are used when the project is being funded on a phased implementation basis.

The format of the As-Needed APDU follows the format of the original APD which it is modifying. For example, a State which has submitted an Implementation APD prior to vendor selection must submit an As-Needed APDU to reflect such information as an updated schedule of activities, an updated project management plan, and a revised budget which incorporates contractual versus estimated vendor costs.

As-Needed APD Updates may also be required by HHS to evaluate projects at key decision points and milestones projected to occur between annual APD Updates. If so, the submission of an As-Needed APD Update at the decision point or milestone will be a condition of an APD approval.

As-Needed APD Updates are submitted if changes occur in project schedule or costs which exceed the thresholds set forth in 45 CFR 95.611(b). See Exhibit IV-2 on page IV-7.

For example, the State should use an As-Needed APDU to:

• Request approval when expenditures are anticipated to exceed regulatory thresholds;

• Request approval for additional funding below the regulatory threshold, but above previously approved expenditure levels, when the State wants to be reimbursed at the higher level;

• Request authority for project continuation when significant project changes are anticipated, such as a schedule extension that exceeds the regulatory limit;

• Report major changes in the scope of the project, such as a change in the procurement plan or activities, system concept, or development approach;

• Report significant, anticipated changes to the cost distribution plan or methodology or to projected system costs and benefits; or

• Provide detailed information on project and/or budget activities if required as an approval condition of a prior APD.

The As-Needed APDU may be submitted at any time, following the format of the APD being amended but including only those elements that have changed. The State must include supporting documentation to justify the need for a change to project approvals.

Exhibit IV-2: As-Needed APD Updates: Written Approval Requirements
[45 CFR 95.611(b)]

¹⁴ The last approval applies. back
¹⁵ If the change occurs within 60 days of the due date of the Annual APDU, the change may be reported as part of the annual submission. back

Back to Table of Contents