Department of Health and Human Services
Departmental Appeals Board
QUALITY CONTROL REVIEW PANEL
SUBJECT: Iowa Department of
Human Services
Docket No. A-93-1
Decision No. QC32
DATE: December 2, 1992
DECISION
The Iowa Department of Human Services appealed the
quality control (QC)
review determination of the Regional
Administrator of the Administration for
Children and
Families (ACF) that an Aid to Families with Dependent
Children (AFDC) recipient was underpaid $63 in the month
of November,
1991.
For the reasons discussed below, we reverse ACF's
determination.
Background
The recipient's case was selected for QC review for the
review date of
January 1, 1992. Iowa QC completed its
review and determined that it
was correctly paid.
However, the federal QC determined there was an
underpayment of $63. The difference in the findings is
due to the
amount of child care expense used as a
disregard from the recipient's
income. Iowa QC
determined there were child care expenses of $111.60
during the budget month of November, 1991. Federal QC
determined
that child care expenses for this same month
should have been $174.70.
This recipient was subject to monthly reporting and
retrospective
budgeting. For the budget month of
November, 1991, the recipient was
required to submit a
report including certain verification statements.
On
November 30, 1991, the recipient indicated on her report
for the
month of November, 1991 that she "paid" GV, the
babysitter, the amount of
$111.60 during the month. The
recipient also submitted a statement
signed by herself
and the babysitter dated December 6, 1991, stating that
the babysitter was paid $111.60 for the month of
November, 1991.
During the Iowa QC's field investigation, the babysitter
submitted
an information form dated February 27, 1992
which indicated that she
"charged" the recipient $174.70
for child care for the month of November,
1991. This
information contradicted the earlier contemporaneous
statement signed by the babysitter that verified the cost
as
$111.60. Another statement from the babysitter dated
March 13, 1992
stated that the recipient "paid" the
babysitter $96.50 on November 18, 1991
and $78.20 on
November 27, 1991. The Iowa QC supervisor contacted the
babysitter by phone on April 10, 1992 in an attempt to
resolve this
discrepancy and the babysitter indicated
that the dates in her March 1992
statement reflect the
dates the babysitter "billed" the recipient and did
not
reflect the dates the babysitter was actually paid by the
recipient.
Iowa QC sought ACF's advice as Iowa initially had found
an underpayment
and coded the child care expense as an
error. However, they asked ACF
whether the child care
expense is to be allowed as paid as the local agency
did,
or should be allowed as charged as Iowa QC initially
determined. ACF informed Iowa QC that federal policy is
that child
care expenses are considered on an as paid
basis and not on an as billed
basis. Iowa QC, therefore,
revised its review to consider the child
care expense on
an as paid basis and found that $111.60 was the correct
amount paid for November, 1991.
During the federal QC re-review in June 1992, the
babysitter indicated
that the dates on the statement
provided to Iowa QC of November 18 and
November 27, were
the dates of the actual payment and not just the billed
dates. As a result of this statement, the Federal QC
allowed a
child care expense of $174.70 and found a $63
underpayment.
Iowa QC then spoke with the client about the child care
expense.
The client stated that she had no records to
verify which days she actually
paid, but she thought she
paid $15.10 on October 31, $96.50 on November 18
and
$78.20 on November 27. The client indicated, however,
that
some of these payments may have been made on the
following Monday because
that was when she received her
paycheck and sometimes she waited until then
to pay the
babysitter in cash.
Applicable Authority
Section 402(a)(8)(A)(iii) of the Social Security Act
provides that the
State agency shall disregard from the
earned income of any Assistance Unit
(AU), an amount
equal to expenditures for care in such month for a
dependent child receiving aid to families with dependent
children and
requiring such care for the month to the
extent that amount does not exceed
$175.
The Quality Control Manual (QCM) at Section 3556 explains
the different
kinds of earned income that are excluded
from consideration as income in the
financial eligibility
process for AFDC. The QCM at paragraph D,
Element 323,
covers the earned income disregard for child or dependent
care expenses. That section specifically states that the
"dependent care disregard is applied to income when the
expense is
paid." That same section provides that some
of the primary evidence
which is best used to verify the
child care expenses might be receipts, or
statements from
the care provider.
Analysis
The sole issue here is how much child care cost should be
allowed as
child care expense to be deducted from the
recipient's income during the
November, 1991 budget
month.
Iowa contended that the information given by the
babysitter has not been
consistent and it should not be
used by ACF to cite an error.
Moreover, the client does
not have adequate information to establish when
child
care expenses were actually paid. Iowa also contended
that
since the actual child care payments made in the
budget month cannot be
determined with certainty, the
case should be dropped from the sample.
There is no doubt that the babysitter gave conflicting
statements about
the amount the recipient paid for child
care during the budget month.
The record strongly
suggests that the babysitter may not have understood the
difference between child care expenses paid and child
care expenses due
and payable. For example, the Iowa QC
information form that the
babysitter signed in February,
1992 requested the babysitter to state what
she "charged"
the recipient for child care for the months of November,
1991, December, 1991, and January, 1992. The babysitter
indicated
on that form that the amount charged the
recipient was $174.70.
However, the statement provided
with the recipient's monthly report and made
contemporaneous to the budget month in question indicated
that the
babysitter was paid $111.60 for that month.
This statement, made at
the time the expense was actually
paid, is more probative than conflicting
statements made
three months or more after the time the payment was made.
Moreover, while the client did not have any records of
her
payments, the babysitter provided no records to
verify that these sums were
actually paid on this date.
The record shows that the babysitter continued
to
vacillate over whether the amount of $174.70 represented
the amount
actually paid or the amount billed.
The record also shows that the Iowa QC workers had reason
to believe from
the totality of the evidence that the
correct amount of the "actual" child
care expense for the
month was $111.60. This figure was consistent
with the
client's explanation, which was confirmed by the
babysitter,
that the client often would pay late.
Consequently, if the client paid
the October 31 payment
of $15.10 late together with the November 18 payment
of
$96.50, and delayed the payment of 78.20 for November 27
until the
December payment, the total amount actually
paid in November 1991 would be
$111.60.
Given the foregoing facts and that the purpose of the
review process is
to develop correct and reliable case
findings based on actual case
conditions, the Iowa QC
workers looked at the totality of the evidence and
made
an appropriate determination based on the evidence at
hand.
While the primary evidence for child care expenses
can be statements from
the child care provider, the Iowa
QC reviewer was correct to look at all the
evidence in
the record given the confusion and inconsistencies in the
babysitter's statements. Therefore, the evidence
supports the Iowa
QC finding that the child care expense
for the month of November, 1991 was
$111.60. Thus, Iowa
correctly paid the recipient.
Conclusion
For the reasons discussed above, we conclude that the
child care expense
for November, 1991 was $111.60 and,
therefore, Iowa correctly paid the
recipient.
Accordingly, we reverse ACF's determination.
_____________________________
Carmen
Cafasso
_____________________________
Maxine
M. Winerman
_____________________________
Andrea
M. Selzer