Most States Offshore Federal Programs

Mar 29, 2006 (12:03 PM EST)

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Forty-three states are using offshoring to administer at least one federal program, according to a recent report.

The Government Accountability Office released a report Tuesday to answer congressional questions about how much the administration of federal programs is shipped offshore. Though a number of efforts have sprung up to limit the practice by government agencies, only two states prohibit offshoring of the federal programs they administer, according to the report.

Of the 43 states that contract with overseas companies, 31 do so for the federal food stamp program. Sixteen use foreign services to administer Temporary Assistance for Needy Families and 13 use it to enforce child support payments. Nine use offshore companies to administer unemployment insurance claims.

Fifteen state program directors compared costs. They reported savings from as little as .3 percent to 24. Few states reported problems, but the most frequent complaints cited difficulty understanding the English of software programmers and customer service representatives, according to the report.