State Accepts Proposal for Private Firm’s Role in Workfare Program

The Deukmejian Administration, which for months had balked at allowing a private company to run the huge new Los Angeles County workfare system, Monday announced a compromise permitting the $7.9-million welfare experiment to begin.

Dennis Boyle, deputy director of the state Department of Social Services, said the key to the compromise was agreement on how to handle the discretionary portions of the private contractor’s job.

The state consistently had argued that federal laws would not permit a private company to administer a benefits program because of the personal decision-making involved on such matters as recipients’ mental health, family relations or other highly private information. The mandatory workfare program, called Greater Avenues for Independence--or GAIN--seeks to make welfare recipients self-supporting, particularly mothers, through job training and education.

To ensure that the contractor had no discretion to make job eligibility or other decisions, the compromise announced Monday requires county workers to handle any appeals filed by welfare recipients. In addition, Boyle said, manuals will be written with detailed steps for workers to follow to eliminate discretion on the part of private workers in making decisions affecting the recipients.

Such written instructions will tell workers “precisely what to do,” Boyle said.

County officials were unavailable late Monday. Carol Matsui, special assistant to the director of the county Department of Public Social Services, said the terms outlined by Boyle seemed to coincide with a letter of understanding written by the county to the state last week.

Boyle said the state plans to officially notify the county later this week that it can begin the private workfare program. The county already is more than a month late in starting the GAIN project. If the delays went past Nov. 1, the county faced losing millions in federal funds.

All money for the workfare effort, created three years ago by state law, comes from the federal and state treasuries. Los Angeles County is the only state entity that decided to contract with a private firm to run the program. Other counties are running the project themselves.

The three-year Los Angeles contract with the Virginia firm of Maximus Inc. can be extended to five years. The workfare offices will be divided into five regions, with the first to open by Nov. 1 in South-Central Los Angeles and the other four throughout the county in January.

County officials have predicted that it would cost $500,000 less the first year to have Maximus run the program than to have county workers do it, provided Maximus stays within its low bid.

Maximus has never run such a program but its president, David Mastran, said Monday it is not fair to characterize it as inexperienced, because its officers and employes include three former county Department of Social Services managers. Another corporate officer is John Svahn, director of California’s welfare department when Ronald Reagan was governor and later a member of Reagan’s federal staff.