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Finding little evidence that New York City has made meaningful progress in preventing eligible welfare beneficiaries from slipping through cracks in the safety net, a federal judge has refused to lift an injunction against the creation of new job centers � the heart of the City’s welfare reform efforts. Southern District Judge William H. Pauley III said that a City audit purporting to show that the handling of claims for food stamps, Medicaid and cash assistance benefits has improved suffered from faulty methodology. He also said that, in the City’s audit, the “deck was stacked” in favor of the job centers. Judge Pauley also declined to dismiss claims against New York State alleging inadequate oversight of the City programs, and certified a class of plaintiffs in the suit, Reynolds v. Giuliani, 98 Civ. 8877. After a hearing that concluded in January 1999, Judge Pauley issued an injunction blocking the creation of new job centers by the New York City Human Resources Administration (HRA). The suit, which also named as defendants the New York State Office of Temporary and Disability Assistance and the New York State Department of Health, claimed that the City’s shift from income support centers to job centers effectively prevented eligible applicants from applying for and receiving food stamps, Medicaid and cash benefits in a timely manner. The shift began in 1998, when HRA began converting some 31 income support centers to job centers as part of the state’s, and the federal government’s, welfare overhaul efforts. The plaintiffs claimed prospective applicants were prevented from applying for benefits during their first visit to a job center, were often pressured to withdraw applications and were routinely denied combined applications for cash assistance, food stamps and Medicaid when only cash assistance had been denied. Moreover, the plaintiffs complained that there was often inadequate or late notice of HRA determinations. In addition to violations of the federal food stamps and Medicaid statutes and regulations, the plaintiffs also made claims under 42 U.S.C. �1983 and federal due process rights. Judge Pauley’s injunction allowed people to apply for benefits on the first day they visited a job center, mandated that applications be processed within the time frame required by law, insisted that separate eligibility determinations be made for food stamps, Medicaid and cash benefits, and ensure that applicants receive adequate notice. He also instructed the City to come up with a corrective plan with certain minimum requirements, including better training of job personnel and improved oversight of the centers. Judge Pauley wrote at the time that “Because some of the City’s neediest residents continue to fall through the safety net at job centers, this court is impelled to ensure that remedial steps are taken on a specified time-line and that the effects of the revisions to job center procedures are measured to ascertain whether they are working.” The plan submitted by the City was approved by the court in May 1999, when Judge Pauley modified his order to allow the City to convert three more income support centers to job centers. Both sides appeared again before Judge Pauley in December, with the City, armed with an audit purportedly showing the progress made through corrective measures, arguing that the injunction should be dissolved. The City said that improved monitoring and oversight activities, including the use of “spot checks” by City employees posing as applicants, had made a real difference. AUDIT NOT PERSUASIVE But Judge Pauley was unpersuaded by the results of the City’s audit. “The court will not presume that the City’s corrective action plan has succeeded simply because it had all the right ingredients,” he said. “The proof of the pudding is in the eating.” Agreeing with the plaintiffs, he said that “the absence of withdrawn cases from the audit sample significantly undermines the reliability of the audit results,” that the sample was “statistically unrepresentative” of the computer databases from which it was drawn, and that in general, the samples “consistently failed” reliability tests, “often by wide margins.” In the end, he said, “the results of the Reynolds audit are entitled to minimum weight.” The City makes “several resourceful arguments touting the reliability of the audit results, asserting that job centers perform better than income support centers, and claiming that job center performance has improved over time,” he said. “While those arguments have some surface appeal, they do not withstand close scrutiny.” He then rejected the motion of the New York State defendants to dismiss on several grounds, finding that the State is “responsible when HRA fails to comply with requirements of the Food Stamp and Medicaid Acts.” “In the context of decentralized administration of welfare programs, such as the case here, the State defendants can only fulfill their statutory obligations if they actively oversee local administering agencies (such as the City defendants) and ensure statutory compliance,” he said. “Thus the duty to comply with federal statutory requirements is shared jointly by the State and City defendants.” Representing the plaintiffs were Marc Cohen and Rebecca L. Scharf of Welfare Law Center Inc., Hwan-Hui Helen Lee of The Legal Aid Society, Mary Ellen Burns of Northern Manhattan Improvement Corp., and Constance P. Carden and Randal Jeffrey of the New York Legal Assistance Group. Representing New York City were Charles A. Miller and Caroline M. Brown, of Covington & Burling, and Assistant Corporation Counsel Jonathan Pines. Assistant Attorney General James M. Hershler represented New York State.

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