A federal judge has ordered Indiana’s partially privatized welfare intake system to speed up decisions on food stamp applications, but the state has a year to meet its first target.

U.S. District Judge Robert Miller issued a preliminary injunction last week in a class-action lawsuit covering every food stamp applicant in Indiana over the past 19 months.

The order represents the latest setback to one of the nation’s most ambitious welfare privatization efforts and came just days after Gov. Mitch Daniels fired vendor IBM Corp. from its $1.34 billion contract.

The early problems met by IBM and its partners led LaPorte attorney Shaw Friedman to sue on behalf of eight welfare recipients in state court last year, and the state got the case moved to federal court.

The IBM team’s tardiness in approving or denying applications became so big an issue that federal food stamp officials in June 2008 asked the state for a formal plan to correct the problem.

“We expect the state to turn this program around and comply with the law and the court order,” Friedman said.

Federal law requires all states to approve or deny most food stamp applications within 30 days, but Indiana usually falls short, deciding only 64 percent of cases on time last month. The preliminary injunction requires the state to decide 80 percent of new cases on time within 12 months and 90 percent within 18 months.

In emergency cases where new applicants earn less than $150 per month and have no more than $100 on hand, the law also requires the state to approve or deny food stamps within seven days. The state decided fewer than half of such cases on time last month. Under the judge’s order, the state also must decide 80 percent of expedited cases on time within a year and 90 percent within 18 months.

Attorneys for the Indiana Family and Social Services Administration and the plaintiffs negotiated the terms of the order over several weeks, and Miller, sitting in South Bend, signed it Oct. 19, four days after Daniels canceled IBM’s contract.

Miller’s order noted that the defendants, FSSA Secretary Anne Murphy and Cathy Boggs, director of the Division of Family Resources, didn’t contest the plaintiffs’ claims that the agency wasn’t deciding food stamp applications on time “in a significant number of cases” since April 1, 2008. That was shortly after FSSA expanded the rollout of the welfare changes from 12 counties to 39.

Deputy Attorney General Michael Carter, who represents FSSA’s Murphy and Boggs, submitted a letter to Miller asking the judge to approve the preliminary injunction.

“It provides the agency with sufficient time and realistic benchmarks to make significant improvements in compliance that will benefit the members of the class,” Carter wrote.

Daniels, when he canceled the IBM contract, said FSSA would devise a “hybrid plan” that combines the call centers, document imaging and Web portal that IBM introduced for the privatized system with successful elements of Indiana’s old, face-to-face way of administering food stamps, Medicaid and other welfare benefits.

“Whatever the hybrid looks like, it will have to adhere to federal guidelines” on food stamp timeliness, Friedman said. Miller’s order “provides the enforcement mechanism to get it done.”