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Chapter I: Introduction

A. Background and Objectives

The Department of Health and Human Services (HHS) provides leadership and direction in planning, managing, and coordinating the administration and financing of a broad range of comprehensive and supportive programs for vulnerable children and families. These programs are carried out in part by public and private, State and local agencies and are designed to promote stability, economic security, responsibility, and self-sufficiency.

Although the programs are carried out at the State and local levels, HHS is responsible for approving, monitoring, and certifying that the programs are being implemented as intended by law and regulation and that the expenditure of Federal funds is made wisely.

This guide describes HHS' policies and procedures for Federal review, approval, and funding of information systems supporting the operation of the Administration's programs. An important element of the process is the preparation and approval of Advance Planning Documents (APDs).

The three primary purposes of the APD process are to:

• Describe in broad terms the State's plan for managing the design, development, implementation, and operation of a system that meets Federal, State, and user needs in an efficient, comprehensive, and cost-effective manner;

• Establish system and program performance goals in terms of projected costs and benefits; and

• Secure Federal financial participation (FFP) for the State.

This State Systems APD Guide (referred to in short as the APD Guide) is intended to:

• Provide a single guide addressing policies and procedures that apply across HHS' programs and apply equally to all States;

• Inform States how to obtain approval and funding through Advance Planning Documents (APDs); and

• Provide insight on the most critical elements of the approval process so that States can prepare more effective APDs and so that Federal approval can be granted more readily.

In developing this guide, HHS was cognizant of the requirements of Administration for Children and Families (ACF), the Health Care Finance Administration (HCFA), and the U.S. Department of Agriculture's Food and Consumer Service (FCS). Given that State agencies must at times develop automation plans that integrate and address the requirements of ACF, HCFA, and FCS, this guide endeavors to describe high-level processes, procedures, and documents that are compatible within HHS and with those of FCS, given existing regulations and policies.

Nonetheless, to be useful to the States, this guide goes beyond high-level requirements to describe, for example, aspects of the review of APDs which reflect HHS' perspective. States developing APDs for systems which require approval from ACF, HCFA, and FCS should refer also to HHS' APD Guide, HCFA's guidance in Chapter 11 of the State Medicaid Management Manual, and FCS's APD Handbook.

Exhibit I-1: Responsibilities

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B. Responsibilities

As Exhibit I-1 on the prior page indicates, the administration of HHS' programs is a cooperative endeavor, with Federal and State governments working together to implement information systems that support the management of Social Security Act programs. Given the State's operational role, considerable responsibility rests with the State for operating welfare-related programs efficiently, effectively, and economically. Automated systems are needed to accomplish this task.

The cost of these automated systems is typically provided by matching Federal funds to State expenditures, resulting in shared funding responsibilities. In certain circumstances, enhanced rates for systems development and operations are authorized by statute and regulation, usually for specific programs and for set time periods. (See Exhibit I-2 below.)

Exhibit I-2: Program Funding Information

[Key: * = Capped entitlement. back ** = October 1993 through September 1997. back *** =90% for development of eligible FSAct expenditures in APDU in effect as of 9/30/95, 80% for development of PRWOR system requirements, State allocation of enhanced funding is capped. back **** 75% for operational costs / 90% for design, development, and implementation (DDI). back]

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C. Types of APDs

Each State seeking Federal funding above the regulatory thresholds (covered in the next section) for the development and implementation of information systems must prepare and submit an Advance Planning Document (APD) for approval by HHS. The APD process may involve one or a series of documents used to secure Federal funding. Eligible State information systems are planned and developed under HHS' approval process which can include two major submissions:

• The Planning APD, and
• The Implementation APD.

In addition, States may use two types of APD Updates (APDUs) to keep HHS advised and to obtain continued funding throughout the systems life. The two types of APDUs are:

• Annual APD Updates, used for routine reporting on the status of the project and for requesting continued, phased project funding, and

• As-Needed APD Updates, used if significant changes occur in project approach, procurement, schedule, or costs.

As part of the APD process, States may also be required to submit copies of solicitation documents, contracts, and contract amendments for prior written approval when regulatory thresholds are exceeded (unless waived at the time of APD approval).

Although use of the formats described in this guide is encouraged to ease and expedite Federal review and approval the formats are not mandatory.

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D. Approval Requirements

Typically, dollar thresholds determine whether States must obtain written approval from HHS before proceeding or before being authorized Federal financial participation (FFP). Exhibit I-3 beginning on page 7 illustrates the current approval requirements in brief.

The following chapters detail the APD requirements and set standards against which HHS conducts reviews. These standards should help States (and by extension HHS) in developing well-prepared APDs.

A State best serves its own interests if, prior to submission, State analysts review the draft APD to anticipate questions or problems and resolve them before submission. States should be aware that the quality, completeness, and organization of the APD is directly related to the time needed by HHS to reach a funding decision.

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E. Submission Information

All APD submissions must be signed by the State agency head or authorized State agency official¹. These signatures indicate to HHS that the project has the requisite organizational and financial support of the State, conforms with the State Plan, satisfies State users and organizations, and (to the State's knowledge) meets all policy and regulatory requirements.

The State sends APD submissions to:

Department of Health and Human Services
Administration for Children and Families
Director, Office of State Systems
370 L'Enfant Promenade, SW
Washington, DC 20447-0001

At the same time, the State sends a copy of the APD to the respective Regional Administrator for Children and Families. HHS Central Office consolidates headquarters and regional office comments on the APD submission and notifies the State whether the APD is approved, conditionally approved, deferred, or disapproved.

Further information about submission requirements is included at Appendix A.

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F. Process Streamlining

This document establishes certain discrete standards that State submissions must meet before Federal financial participation is approved. It is intended to ensure that HHS analysts will measure submissions against a common set of standards. It helps HHS by focusing review on areas critical to HHS' responsibilities under the law. It helps the States by finitely defining the rules for approval and supporting preparation of more concise, to-the-point submission documents.

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G. Prompt Action on Requests for Prior Approval

The regulations at 45 Code of Federal Regulations (CFR) 95.611(d) specify that HHS must provide a State written approval, disapproval, or a request for information within 60 days of the date of the acknowledgement of receipt of the State's request. Otherwise, "the request will automatically be deemed to have provisionally met the prior approval conditions" of 45 CFR 95.611.

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H. Overview of Guide

This guide sets forth requirements related to the preparation, submission, and review of APDs and supporting documentation. This guide is for State use in acquiring and managing information systems and in preparing, submitting, and updating Advance Planning Documents (APDs). This guide is also used by Federal personnel in HHS central and regional offices in advising State personnel and reviewing submissions.

A comprehensive table of contents supports the guide's use as a reference document. The guide is divided into five chapters and two appendices.

• Chapter I is the introduction.

• Chapter II describes the requirements for Planning APDs.

• Chapter III addresses the requirements for Implementation APDs.

• Chapter IV covers APD Updates.

• Chapter V addresses solicitation documents and contracts.

Appendix A contains detailed submission requirements for APDs. Appendix B is a list of authorities.

Exhibit I-3: Summary of 45 CFR 95-611's Key Approval Requirements

¹ State agency heads are required to notify ACF in writing of the individuals authorized to submit APDs. Unsigned submissions and those signed by any person other than the State agency head or authorized officials may be returned. back
² Or other types of solicitation documents, such as Invitations for Bids (IFBs). back

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