DEPARTMENTAL APPEALS BOARD
Department of Health and Human Services
SUBJECT: New Jersey Department
DATE: March 27, 1990
of Human Services Docket No. 89-204
Decision No. 1142
DECISION
The New Jersey Department of Human Services (State, Appellant) appealed
a disallowance by the Office of Child Support Enforcement (OCSE, Agency)
disallowing $97,546 in federal financial participation (FFP) claimed
under Title IV-D of the Social Security Act (Act). The State's claim
was for county automated data processing (ADP) costs for the period
November 1981 through September 1985. OCSE disallowed the claim because
it had not been timely filed and was therefore not eligible for FFP. 1/
As explained more fully below, we find that the basis asserted by OCSE
was correct and uphold the disallowance.
Background
The record reflects that on May 27, 1981, Gloucester County, New Jersey
(County) submitted an advance planning document for an ADP system to the
State seeking approval for FFP under the Title IV-D program. The State
reviewed the County's plan and determined that the automated system
which the County proposed did not meet the federal requirements for FFP
at the enhanced 90 percent rate available for certain ADP costs. State
appeal file, Ex. Aa14. Although the County apparently filed the
appropriate monthly claim forms with the State for the November 1981
through September 1985 time period, the State did not include the
County's ADP costs in its quarterly FFP claim until 1989. See State
appeal file, Ex. Aa27.
The State included an increasing adjustment for these costs in its
expenditure report for the quarter ending December 1988 (initial report
dated March 20, l989, revised report dated April 24, l989). The State
asserted that it failed to claim these costs timely because it had
mistakenly determined that the County's ADP effort duplicated the
State's planned statewide data processing system under Title IV-D, so
that FFP was unavailable for the County's expenditures. In fact,
asserted the State, its statewide system remained developmental for
three years beyond its original operational goal of 1986, and was not
operational in the County until 1989. The State now seeks to claim the
County's computer expenses at the FFP rates available for routine
administrative costs during the period at issue. The State asserted
that its claim is proper in light of the delay in operation of the
statewide system and its erroneous initial "policy" determination
concerning the status of the County's computer expenses.
Relevant Statutory and Regulatory Provisions
Section 1132(a) of the Act prohibits the payment of FFP for any
expenditure that has not been claimed within two years after the
calendar quarter in which the state made the expenditure, except that
this subsection is not to be applied "so as to deny payment with respect
to any expenditure involving court-ordered retroactive payments or audit
exceptions, or adjustments to prior year costs."
The provisions of section 1132(a) are implemented by the regulations in
45 C.F.R. Part 95, Subpart A. The regulations also provide for the
two-year limitation period in which the State must file its claim.
Section 1132(b) and the implementing regulations provide that payment
may be made to a state beyond the two-year time limit if the Secretary
determines that there was good cause for a state's failure to file a
claim within the limitation period. The regulations define "good cause"
for the late filing of a claim as "lateness due to circumstances beyond
the State's control". To seek a section 1132(b) waiver, the regulations
require that the State comply with certain procedures.
Discussion
Appellant did not dispute that it failed to comply with the two-year
filing requirement of section 1132 of the Act, nor did it contend that
its claims come within any of the exceptions of section 1132(a).
Instead, appellant contends that there are "legitimate reasons for
waiving the two-year filing requirement in this case." State brief, p.
2. Appellant requests that the Board employ "its equitable powers"
to
reverse the Agency's decision. State brief, p. 4.
The procedures for requesting a waiver on the basis of good cause are
set out in 45 C.F.R. Part 95, Subpart A. These procedures require the
State to make a request for a waiver in writing as soon as the State
recognizes that it will be unable to submit a claim within the
appropriate time limit. 45 C.F.R. 95.25. The regulations also require
that the State's request for a waiver include a specific explanation,
justification, or documentation of why the claim is late, and establish
that the State's lateness in filing its claim is for good cause. 45
C.F.R. 95.28.
Most importantly, the regulations dictate that the State's request for a
waiver be sent to OCSE 2/ and that "the Secretary will make a decision
after reviewing the State's request for a waiver". 45 C.F.R. 95.34.
Appellant made no attempt to comply with the procedures recited in the
regulations, but instead argued that the equities of the County's
situation merit a reversal of the OCSE's disallowance by this Board. In
our October 12, 1989 acknowledgment letter to the parties, we pointed
out the regulations on waiver to appellant, but have received no
explanation of why it did not request a waiver from the Agency. That
agency alone has been delegated authority by the Secretary to approve a
waiver. 50 Fed. Reg. 24839 (1985). 3/
The State also asked the Board to apply "its other equitable powers",
in
addition to employing the good cause exception to the two-year filing
limitation. State brief, p. 6. The Board cannot grant the relief
sought since it has no authority to render decisions unsupported by a
legal basis, regardless of the equitable considerations involved.
Tennessee Dept. of Human Services, DAB No. 1054 (1989) p. 15.
Conclusion
The Board cannot grant a waiver to the two-year filing requirement of
section 1132(a) of the Social Security Act, nor can it reverse a
disallowance on general equitable grounds.
Accordingly, we sustain the disallowance.
___________________________ Cecilia Sparks
Ford
___________________________ Norval D. (John)
Settle
___________________________ Alexander G.
Teitz Presiding Board Member
1. The Agency in its disallowance letter stated that even if the
claims had been timely filed, federal reimbursement might not have been
available since the State would be subject to the conditions on FFP for
expenditures for ADP equipment in 45 C.F.R. Part 95, Subpart F. We will
not address this issue since the Agency's first reason for the
disallowance is sufficient.
2. A request for a waiver which affects the program of only one agency
of the Department of Health and Human Services, such as the Office of
Child Support Enforcement, should be sent to that agency. 45 C.F.R.
95.31.
3. We decide here only that the Board has no power to grant a waiver
of the requirements for timely filing of claims. However, we note that
the State presented no reasons for its lengthy delay in filing which
could possibly meet the regulatory requirements for the granting of a
good cause waiver by the proper Agency. Not only were these expenses not
claimed on an ongoing basis when the County's claims were submitted to
the State, the State delayed another 15 months after the County
specifically asked why it had not received FFP for its costs. See State
appeal file, Ex. Aa 27. The regulation defines "good cause" as
"lateness due to circumstances beyond the State's control." 45 C.F.R.
95.22(a). See Tennessee Dept. of Health and Enviroment, DAB No. 921
(1987), p. 5. The State asserted that it made a "legitimate policy
choice" whether to file a claim for the County's costs. State brief, p.
5. The fact that the State made the wrong decision is hardly a
circumstance beyond the State's control.