The expected benefits of the project were to enhance organizational coordination and reduce duplicate key-in and paper- work. Table 4 (page 38) is the financial summary for the Welfare Reform Related Technology fund for state fiscal years (SFY) 2001 through 2003. Total project cost (Row A in Table 4, page 38) includes items such as personnel, software, hardware, training, facilities, professional services, supplies, and others. Total annual project benefit for the state (Row B) explains how much the state has benefited from the investment of the technology fund by the avoidance of federal penalties. The magnitude of the return on investment was expected to decrease year-by-year. The likelihood and magnitude of penalties would be largest in the first year or two, and would diminish as the accuracy and efficiency of the system improved with experience and refinements. This is a normal example of the operation of diminishing marginal productivity of an investment over time. At any rate, because of the very large impact of trying to avoid Federal penalties, the ROI percentage remains very large. In addition to the financial returns, the project planners expect benefits resulting from more efficient, effective implementation of changes resulting in improved customer service, increased program accuracy, and readily available information for program and field staff to use in making business decisions.

Table 4. Results of the IOWA ROI Analysis for Three Project Years ¹⁶

	SFY 2001	SFY 2002	SFY 2003
A) Total Project Cost	$ 2,024,768	$1,468,324	$1,556,016
B) Total Annual Project Benefit for State	$5,631,298,200	$529,600,000	$30,920,192
C) Total Annual Project Cost for State	$760,300	$734,162	$778,008
D) Project Funds Requested % fromState	37.55%	50%	50%
E) Project Funds Requested from State: (A*D)	$760,300	$734,162	$778,008
F) Benefit/Cost Ratio: (B/C)	7406.7	721.4	39.7
G) ROI: (B-C/ E)%	740568%	72037	3874%
** Some numbers differ from the original report due to rounding.