Ind. has no alternative to troubled welfare system

INDIANAPOLIS – Indiana welfare officials considering canceling the state’s privately run welfare system have no backup plan in place, and critics say it will be hard to undo the privatization of 1,500 state case workers more than two years ago.

Anne Murphy, secretary of the Family and Social Services Administration, confirmed last week that the system led by IBM Corp. and Dallas-based Affiliated Computer Services Inc. has so many problems that Indiana could cancel the 10-year, $1.16 billion contract.

She asked IBM to submit a “corrective action plan” as part of a process that could result in cancellation of the contract if changes aren’t made by the end of September.

But, Murphy told The Associated Press that her agency doesn’t have a backup plan for running the welfare system that provides benefits to 1.2 million Indiana residents. Top state officials have started discussing what to do if the vendors’ performance doesn’t improve, but no plan has been made.

“We don’t have a plan B yet,” Murphy said. “We’re hopeful that they’re going to make the changes and that there will be improvements.”