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Archive for Tuesday, March 30, 2004

SRS says job-outsourcing limits could raise costs

March 30, 2004

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— Startled to learn that Kansans' questions about food stamps are answered by workers in India, state senators added language to the budget requiring that the work be done in the United States.

But that provision was scrapped Monday when budget negotiators learned the potential cost -- about 38 percent more than the state now pays an Arizona-based company called eFunds Corp. to administer the food stamp program.

"I think we've decided to study that issue a little more," said Rep. Melvin Neufeld, R-Ingalls, chairman of the House Appropriations Committee.

Senate and House negotiators agreed to drop the provision from the final version of a $10.2 billion budget for the fiscal year that starts July 1.

The Department of Social and Rehabilitation Services signed a $1.7 million-a-year contract with eFunds Corp. in September 2002 to handle food stamps benefits and take clients' calls.

In its 2003 annual report, eFunds said it has two customer call centers in India and that about 3,100 of its 5,400 employees are outside the United States.

Last week, the state Senate voted to bar SRS from spending any money on a food stamp administration contract with a vendor who performs work outside the United States. The provision also would have required a contractor to hire Kansans who are receiving cash assistance from the state.

SRS Secretary Janet Schalansky responded with a letter saying eFunds was one of only two bidders for the contract, which runs through 2010 with an option to extend it through 2013.

Schalansky said the Senate's measure would raise the cost of the eFunds contract by $640,000, because the company would have to set up a center in Kansas. She also said that more than half of the Kansans who receive cash assistance have mental illnesses, addictions or learning disabilities that make it difficult for them to find jobs.

Not all calls from Kansas to the company are answered in India. SRS spokesman Kyle Kessler said the company also has two centers in Wisconsin, where overflow calls are handled, and that managers from Wisconsin train workers in India.

Senate President Dave Kerr was skeptical of Schalansky's arguments. He said SRS was considering that it spend less on cash assistance under the provision.

"I think Kansans would like to see the agency take a more thorough look at it," said Kerr, R-Hutchinson.

The state expects to spend $185 million on food stamps during the next fiscal year, providing 191,000 Kansans an average of $80.50 monthly. Needy Kansans receive cards resembling bank cards, and SRS provides benefits electronically.

In other action, the budget negotiators agreed on a proposal that trims state spending by three-tenths of 1 percent, settling dozens of small issues but leaving big ones unresolved.

Neither chamber convened, and Monday was not considered one of the 90 days legislators are scheduled to be in session this year.

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