INDIANAPOLIS — A top Indiana official says the state’s privately run welfare project has so many problems that Indiana could begin taking steps to cancel its $1.16 billion contract this fall.

Family and Social Services Administration Secretary Anne Murphy says she asked lead vendor IBM Corp. to prepare a “corrective action plan” as part of a process that could result in canceling the 10-year deal if improvements don’t occur by the end of September.

Murphy says the state wants IBM and its partners to succeed. IBM spokesman Jim Larkin says the company is working aggressively to make changes.

Lawmakers and clients say the project has led to lost documents, slow approvals and severed eligibility for Medicaid and food stamps.

Texas canceled a similar project in 2007.