Department of Health and Human Services
Departmental Appeals Board
QUALITY CONTROL REVIEW PANEL
SUBJECT: Arkansas Department
of Human Services
Docket No. A-93-201
Decision No. QC56
DATE: October 22, 1993
DECISION
The Arkansas Department of Human Services (State)
appealed the quality
control (QC) review determination
issued on June 25, 1993 by the Regional
Administrator of
the Administration for Children and Families (ACF) in
state QC review number 110151. ACF found that an
overpayment of
$81.00 occurred in the review month of
November 1992, because the State
failed to impose a
sanction in that month for non-cooperation with the
State's child support agency.
For the reasons discussed below, we find that State did
not make a
determination of non-cooperation requiring a
sanction in the review month,
and therefore we reverse
ACF's finding of an overpayment.
Relevant Authority
Title IV, Part A of the Social Security Act (Act)
establishes the Aid to
Families with Dependent Children
(AFDC) program to provide assistance to
certain needy
children and their caretakers. States are required to
operate the program in accordance with state plans
meeting certain
criteria set forth in the Act. One
criterion is that the state plan
must require recipients,
as a condition of eligibility, to cooperate with
the
state to establish paternity for children born out of
wedlock and to
obtain child support payments, unless good
cause is shown for
non-cooperation. Section 402(a)(23)
of the Act.
The regulations specify the steps a recipient must take
in order to
provide the required cooperation and provide
that, if the recipient fails to
cooperate, the state will
impose sanctions by denying assistance to the
caretaker
and providing assistance only to the child in the form of
protective payments without regard to the caretaker's
needs. 42
C.F.R. � 232.12 (a), (b), and (d). The
regulations further state that
the state plan --
shall provide that, if the child support agency
notifies the State
or local [AFDC] agency of
evidence of failure to cooperate, the State or
local
agency will act upon that information to enforce the
eligibility
requirements of this section.
42 C.F.R. � 232.12(c).
The State has established procedural guidelines in its
Family Assistance
Manual to carry out these provisions
which provide for notification of
non-cooperation to be
sent from the child support agency to the local AFDC
agency by a form (number 1640). State Brief (Br.),
Attachment
(Att.) C (FA 2247.3). The local AFDC agency
will then "act upon the
information" by sending a Notice
of Action form to the client warning that a
sanction will
be imposed "unless evidence of cooperation with the
[child
support agency] . . . is received by the [AFDC
agency] . . . within 20 days
. . . ." Id. (emphasis in
original). However, an exception to
this procedure is
provided in instances of non-cooperation by "omission,"
such as the failure to appear for an appointment. In
those cases,
no Notice of Action will be sent, and no
sanction applied, when the
caseworker already "possesses
previously reported information regarding
extenuating
circumstances," such as that the client has moved or was
out-of-town. Id. The form 1640 is to be returned to the
child support agency within 25 days of its receipt with
notations
indicating the action taken. Id.
Factual Background
In the case at issue, the AFDC agency received a form
1640 from the child
support agency on September 21, 1992
indicating that the client, K.J., had
failed to cooperate
in that she and her child failed to appear for a
scheduled blood test as part of establishing paternity.
State Br.,
Att. D. The AFDC agency thereupon sent out a
Notice of Action to K.J.,
warning her that a sanction
would be imposed if she failed to cooperate by
October
14, 1992.
On October 16, 1992, the AFDC caseworker contacted the
child support
agency to verify that K.J. had not
cooperated within the required
time. The disagreement
between the ACF and State QC reviewers centers
on the
conversation which the caseworker then had with an
attorney at
the child support agency which was
memorialized in the child support case
narrative as
follows:
Received call from [AFDC caseworker] . . . wanting
to verify that
client has cooperated. I could not
tell if she had so I told her to
hold up on sanction
and we would expedite setting up another bt [blood
test] and advise if client cooperates or not.
State Br., Att. E, at 3-4.
As a result of this information from the child support
attorney, the
caseworker did not impose any sanction for
the review month (November
1992). Thereafter, the child
support agency reported that K.J. did not
appear for the
later scheduled blood test appointment, and a sanction
was imposed for the month of December 1992. The form
1640 was
returned to the child support agency on November
2, 1992 reporting the AFDC
agency's actions.
Issue
The State's position was that no determination of non-
cooperation could
properly be made, because the
information from the child support agency
removed the
basis on which the AFDC agency was relying to make such a
determination. ACF conceded that no sanction could be
imposed if
the initial determination of non-cooperation
was unsupported, but argued
that the information from the
child support agency attorney did not
demonstrate that
the determination was unsupported. Thus, the issue
before us is whether the State erred in failing to impose
a sanction
during the review month.
Analysis
Under the Act and implementing regulations, as discussed
above, a
sanction must be imposed when a recipient has
failed to cooperate as
required with the child support
agency. The AFDC agency enforces this
requirement by
acting upon information concerning non-cooperation sent
to it from the child support agency. Here, the AFDC
agency acted
on an initial referral from the child
support agency, but determined not to
impose a sanction
after receiving additional information as a result of the
follow-up conversation between the AFDC caseworker and
the child support
agency attorney. The AFDC caseworker
reasonably interpreted the
comments of the child support
agency attorney as undercutting the factual
basis for a
determination of non-cooperation.
The attorney's comments were ambiguous as to whether the
records of the
child support agency failed to support the
original report of
non-cooperation, failed to support a
verification that cooperation had not
since occurred, or
simply were unclear as to what cooperation had
occurred.
1/ None of these interpretations, however,
provided the
AFDC caseworker with a basis to determine that
non-
cooperation had occurred.
The sole evidence of non-cooperation on which the AFDC
agency had relied
in taking action was the referral from
the child support agency. If
the attorney was indicating
that the child support agency's records did not
support
the initial referral, the caseworker could reasonably
accept the
attorney's representation that a sanction
should not be imposed. If
the attorney was indicating
that the client may have cooperated after the
referral,
the caseworker could reasonably conclude that the
imposition
of a sanction was improper. If the attorney
was indicating that the
child support agency records
lacked clear documentation, again the
caseworker could
reasonably conclude that a sanction was not supported on
the record. Thus, ACF erred in characterizing the State
as having
made a determination that non-cooperation did
indeed exist, without having
proceeded to impose the
required sanction. See State Br., Att. B at
2-3.
Rather, the State acted upon information of non-
cooperation,
but ultimately did not make a determination
of non-cooperation because the
child support agency
attorney indicated that non-cooperation could not be
supported by the record. Accordingly, we conclude that
neither the
Act nor the regulations required the AFDC
agency to impose a sanction
here.
This conclusion is consistent with section 3542 of the QC
Manual, issued
by ACF in October 1992, which sets out how
cooperation in child support
enforcement is to be
reviewed in the QC process. The pertinent part
provides
as follows:
The sole concern is to establish whether the IV-A
[AFDC] agency
imposed a sanction after having
determined a caretaker/recipient's failure
to
cooperate in establishing paternity and securing
support, without
good cause.
This element is considered to be correct if:
1. The IV-A agency has made no determination of
failure to
cooperate; or
2. The IV-A agency has made such a determination
and has
correctly applied the sanction.
ACF contended that the State made a determination of non-
cooperation
because it sent out a Notice of Action.
However, the sending of a
Notice of Action does not
itself constitute a final determination of
non-
cooperation, since it allows for further evidence of
cooperation. The information provided by the child
support agency
attorney effectively negated the initial
determination of
non-cooperation. At the very least, the
child support attorney's
statement so seriously called
into question the factual basis of
non-cooperation as to
require further investigation before any final
determination could be made. Thus, as of the point when
the
decision on whether to impose a sanction for the
review month was made, the
AFDC agency had made no
determination of non-cooperation. Accordingly,
under the
QC Manual, the element was correct.
ACF agreed that imposing a sanction where an AFDC agency
finds that its
initial determination of non-cooperation
was not justified would be
unauthorized and would, in
fact, be considered an erroneous payment
determination in
the QC system. ACF Br. at 1-2. 2/
ACF argued that
this did not happen here because "there was in fact
justification for the sanction, but the sanction was not
timely
imposed."
ACF argued that the Notice of Action must have been
justified, because
the client did not contact either
agency to dispute it. ACF Br. at
2. This contention
might have merit if the State were claiming that it
did
not proceed to impose a sanction merely because the
client had not
responded or had not admitted non-
cooperation. However, here, the AFDC
agency had received
an affirmative instruction from the child support agency
that a non-cooperation sanction was not supported on the
record and
should not be imposed. The representations of
the child support agency
attorney were not contradicted
by the client's silence in the face of the
Notice of
Action, since, as the State pointed out, other
explanations
for that silence were possible, such as non-
receipt of the letter.
State Reply Br. at 1.
ACF also argued that the State did not take "timely"
action. ACF
characterized the AFDC agency as simply
waiting until the client missed
another blood test
appointment which amounted to an "additional period for
cooperation granted by the . . . AFDC agency worker
[which] was not
authorized by any provision of
permissible state practice." ACF Br. at
9. The AFDC
agency did not grant additional time for K.J. to get a
blood test. Rather, the AFDC agency reacted to the
absence of
sufficient documentation, as reported by the
child support agency attorney,
by deciding not to make a
determination of non-cooperation based on the
record as
of the time when the sanction decision had to be made for
the
review month. ACF did not challenge the
documentation of the
conversation between the AFDC
caseworker and the attorney provided by the
State.
Moreover, as discussed above, although ACF characterized
the attorney's remarks as substantiating that "there was
no evidence
indicating any cooperation on the part of"
the client, this interpretation
is not the only
reasonable one. Cf. ACF Br. at 8. The AFDC
agency was
not unreasonable in understanding those remarks as
asserting
that there was insufficient documentation of
non-cooperation to support a
sanction. Thus, the AFDC
agency's actions did not constitute an
unauthorized
delay.
ACF further contended that the State's actions were
untimely because the
contact with the child support
enforcement attorney occurred after the
20-day period
provided in FA 2247.3, and because the form 1640 was not
returned to the child support agency within 25 days as
also provided
therein. The State argued that it
interpreted the 20-day period as
directed at giving the
client that period of time in which to cure
non-
cooperation, rather than at cutting off the AFDC agency
from all
consideration of evidence received after that
period concerning cooperation
which occurred within the
relevant time. Since child support agency
workers did
not always report cooperation immediately, the State
indicated that caseworkers commonly follow up by
contacting child
support agency staff to verify non-
cooperation before imposing a
sanction. State Br. at 3.
3/ While the State
acknowledged that the late contact
with the child support agency was a
"procedural
deviation," it argued that such procedural matters are
not
subject to QC review where they do not affect
eligibility and payment
policies.
The QC Manual distinguishes procedural and substantive
requirements in
reviewing state methods of determining
eligibility and payments.
Specifically, the QC Manual
states that local agencies' methods and
procedures for
establishing eligibility and payment, as opposed to the
accuracy of the substantive eligibility and payment
determinations, are
"not part of the QC review." QC
Manual � 3140 (emphasis in
original). Here, the State
indicated that the cut-off date by which
the AFDC agency
could implement a sanction for November 1992 was October
23, 1992. State Br. at 4. The determination that the
initial
finding of non-cooperation was not supported on
the record was made by
October 16, 1992 (the date of the
conversation with the child support agency
attorney).
Therefore, the fact that the caseworker's contact with
the child support agency staff occurred after the 20-day
notice period,
even if it deviated from the Family
Assistance Manual procedures, did not
affect the payment
accuracy. We find that the 20-day framework was a
matter
of administrative convenience but did not affect the
substantive
eligibility or payment decision, where, as
here, the determination on
non-cooperation was made
before the cut-off date. Therefore, the
20-day notice
period is not relevant for QC purposes here.
ACF also considered the State's actions untimely because
the AFDC agency
did not return the 1640 form to the child
support agency within the required
25 days. However, ACF
did not explain how the 25-day framework for
returning
the 1640 form would be relevant to the payment
determination
here. The sanction would be applied to the
AFDC payment, so the report
to the child support agency
(by return of the form), whether timely or not,
does not
appear to have any effect on the accuracy of the payment
determination.
ACF contended, in addition, that the State failed to
comply with its
obligation under the regulations to "act
upon" evidence of
non-cooperation. However, the record
demonstrates that the AFDC agency
did act upon the
information in the form 1640 by sending out the required
Notice of Action. ACF did not demonstrate that the
action required
by the regulations is a determination of
non-cooperation regardless of
information received by the
AFDC agency after sending out the Notice of
Action.
ACF pointed out that no previously-known extenuating
circumstances
existed here, which FA 2247.3 provided
would obviate the sending of a Notice
of Action (in
certain cases of a client's failure to appear). ACF Br.
at 8. The State did not dispute this. However, the
absence
of extenuating circumstances is irrelevant,
because the State did send out
the Notice of Action in
accordance with FA 2247.3. Furthermore, the
permissible
state practice in FA 2247.3 does not address what action
the
caseworker is to take when information is received
after the Notice of
Action is sent but before the
sanction is recorded which undercuts the basis
for a
determination of non-cooperation. Nevertheless, the
Notice
of Action informs clients that they can avoid a
sanction by evidence of
cooperation, so it is obviously
contemplated that a sanction will be aborted
if
cooperation occurs during the 20-day period. Similarly,
the
permissible state practice does not require a
caseworker to ignore evidence
that the original referral
from the child support agency may have been sent
in error
or without necessary documentation and to proceed to
impose a
sanction simply because the process for
determining non-cooperation was
triggered by the
referral.
ACF argued, moreover, that the duty to determine non-
cooperation and
enforce the eligibility requirement to
cooperate lay with the AFDC agency,
not the child support
agency which made the referral. State Br., Att.
B
at 2-3; ACF Br. at 6. Apparently, ACF inferred from this
assertion that the AFDC agency should not have relied on
the information
from the child support agency in
declining to impose a sanction.
However, the regulations
specify that the AFDC agency's duty is to "act
upon" a
referral from the child support agency. 45 C.F.R.
�
232.12(c). The State here did act upon the referral by
sending out the
Notice of Action and following up with
the child support agency to verify
the non-cooperation.
Nothing cited by ACF indicated that the AFDC
agency was
required to go behind the information provided to it by
the
child support agency attorney to conduct an
independent factual
investigation to determine non-
cooperation. The State indicated that
the information in
referrals from the child support agency is accepted by
the AFDC agency without further investigation unless it
is "obviously
questionable" on its face. State Br. at 1,
n.1. ACF did not
argue that this reliance on the
information provided by the child support
agency was
inappropriate or explain why the AFDC agency should not
have
similarly accepted the information from the child
support agency attorney
that non-cooperation could not be
verified and no sanction should be
imposed.
Conclusion
Since the information provided by the child support
agency attorney
removed the basis for the initial
referral for non-cooperation, the AFDC
agency acted
reasonably in making no determination of non-cooperation
and declining to impose a sanction during the review
month.
Therefore, we reverse ACF's determination that an
overpayment of $81
occurred in this case and find that
the case was correctly paid.
___________________________
Peggy
McFadden-Elmore
___________________________
Carolyn
Reines-Graubard
___________________________
Leslie
A. Sussan
* * * Footnotes * * *
1. As the State pointed out,
the entries in the
case narrative record at the child support agency prior
to the notation of the attorney's conversation with the
AFDC caseworker
are confusing in that they do not show
whether or not the client missed the
September 15, 1992
blood test appointment, and they show an incorrect date
for issuance of the form 1640 notice. State Br. at 3.
Thus,
there was reason to question the statement in the
form 1640 notice that the
client had not appeared for
that blood
test.
2. ACF's position thus
presents a catch-22
situation for the State AFDC agency when it receives
information indicating that the basis on which it
proposed to determine
non-cooperation may not have
support in the child support agency
records. If it
proceeds to impose a sanction, the State may be found
to
have committed an error in imposing an unsupported
sanction. If
it does not impose a sanction in order to
be certain that non-cooperation
exists, as here, the
State may be found to have committed an error on the
grounds that the issuance of a Notice of Action requires
automatic
imposition of a sanction absent proof of an
intervening act of
cooperation.
3. It is true
that the Family Assistance Manual
does not require the caseworker to check
with the child
support agency to confirm that the client has not offered
cooperation which has not been reported to the AFDC
agency.
However, ACF explicitly stated that it did "not
fault the prudent judgment
in case handling by the IV-A
worker inquiring as to whether the recipient
might have
contacted the Child Support Unit . . . ." State Br.,
Att. B at 2.
(..continued)