GAB Decision 116
August 14, 1980 Wisconsin Department and Health and Human Services;
Docket No. 80-36-WI-SS Coster, Clarence; Settle, Norval Przybylinski,
Donald
The Wisconsin Department of Health and Social Services (the State)
requested reconsideration pursuant to 45 CFR Part 16, Subpart C, of a
disallowance of Federal financial participation (FFP) claimed under
Title IV-A of the Social Security Act (the Act) for emergency assistance
expenditures. The sole issue presented is whether the State's claim of
$163,616 FFP for the period of January 1, 1976 through June 30, 1978 was
properly disallowed on grounds that the State's approved plan for this
period did not provide for emergency assistance. There are no material
facts in dispute and informal conference would not be helpful.
Accordingly, we have determined to proceed to decision based on the
State's application for review and the State's response to the Order to
Show Cause issued by the Chairman of the Board on March 26, 1980. For
the reasons stated below, we conclude that the disallowance should be
upheld.
Background
Section 403(a)(5) of the Act authorizes reimbursement of 50 percent
of the total amounts expended by a state under its state plan for
emergency assistance to needy families with children. Section 406(e)(
1) of the Act provides that:
"emergency assistance to needy families with children" means any
of
the following, furnished for a period not in excess of 30 days in any
12-month period, in the case of a needy child under the age of 21 . . .
(A) money payments, payments in kind . . . but only with respect to a
State whose State plan approved under Section 402 includes provision for
such assistance.
This section limits Federal reimbursement for emergency assistance
expenditures to states whose approved state plans specifically provide
for such emergency assistance. The emergency assistance program was
added to Title IV as part of the Social Security Amendments of 1967,
Public Law 90-248, Section 206. This program was described in the
Senate Finance Committee report as "a new program optional with the
States (to) authorize dollar-for-dollar Federal matching to provide
temporary assistance to meet the great variety of situations faced by
needy families with emergencies." Senate Report No. 744, 90th Congress,
1st Session, 4 (1967). Justice Stewart, speaking for the Court, noted
in Quern v. Mandley, 436 U.S. 725, 729 (1978), that in order for a state
to participate in the emergency assistance program under Title IV, "a
State must include a provision for EA (Emergency Assistance) in its Sec.
402 state plan. . . ."
States are given the option of electing to participate in an
emergency assistance program by filing an amendment to their state plan
providing for such a program. Pursuant to 45 CFR Sec. 233.120(b), FFP
is then available for emergency assistance expenditures "(beginning)
with the effective date of approval of the amendment to the State plan
for AFDC which provides for emergency assistance to needy families with
children pursuant to Section 406(e) of the Act."
Under Section 1102 of the Act, the Secretary has the authority to
promulgate rules and regulations, not inconsistent with the Act, which
provide for the efficient administration of the functions of the
Secretary under the Act. Section 201.3(g) of Title 45 of the Code of
Federal Regulations provides for the effective date of a state plan or
state plan amendment under Title IV-A. This section states:
The effective date of a new plan may not be earlier than the first
day of the calendar quarter in which an approvable plan is submitted,
and with respect to expenditures for assistance under such plan, may not
be earlier than the first day on which the plan is in operation on a
statewide basis. The same applies with respect to plan amendments that
provide additional assistance or services to persons eligible under the
approved plan or that make new groups eligible for assistance or
services provided under the approved plan.
Facts
Prior to December, 1975, Wisconsin opted to elect an emergency
assistance program by filing a plan amendment specifically providing for
such a program. The State decided to withdraw its claim for FFP in the
emergency assistance program due to the Federal court order in Kozinski
v. Schmidt, 409 F. Supp. 215 (E.D. Wis. 1975). That order enjoined the
State from limiting emergency assistance to cases of fire, flood or
natural disaster from failing to provide emergency assistance to
otherwise eligible needy families with children who need such assistance
to avoid eviction from homes or to maintain or restore utilities. The
court stated that nothing in the order shall restrict the defendant's
ability to modify or rescind its participation in the Federal emergency
assistance program and that the order is applicable only to emergency
assistance given by defendants for which FFP is received pursuant to
Section 406(e)(1) of the Social Security Act. The State then filed
State Plan Amendment 75-94, dated December 18, 1975, which withdrew the
provision for emergency assistance and made the State ineligible for FFP
during the period in question.
In 1978, the Supreme Court announced its decision in Quern v.
Mandly, supra. The Supreme Court decided, among other issues, whether a
state that adopts an emergency assistance program under Sec. 403(a)( 5)
and Sec. 406(e) must define eligibility for this assistance no more
narrowly than Sec. 406(e). The Court held that Sec. 406(e) defines the
permissible scope of an emergency assistance program for which FFP is
available but Sec. 406(e) does not impose mandatory eligibility
standards on those states that elect to participate in the emergency
assistance program. The State believed that the decision in Quern
indicated that the Federal District Court erred in the Kozinski case
regarding the eligibility of Wisconsin's emergency assistance program
for FFP.(Application for review, page 3.) On September 19, 1978,
therefore, the State submitted a new state plan amendment to the Social
Security Administration providing emergency assistance for needy
families.
By letter dated January 24, 1980, the Commissioner of Social Security
disallowed $163,616 in FFP in emergency assistance for the period
January 1, 1976 through June 30, 1978 on the basis that that amount
represents claims for emergency assistance expenditures not covered
under the state plan and therefore not allowable pursuant to Sections
403(a)(5) and 406(e)(1) of the Social Security Act. Citing 45 CFR Sec.
201.3(g), the Agency stated that inasmuch as the state plan amendment
providing for an emergency assistance program was filed on September 14,
1978, the earlies date this approved amendment could be effective was
July 1, 1978 -- the first day of the calendar quarter in which the plan
was submitted.
State's Position
The State in its application for review admits that its state plan
did not provide for emergency assistance expenditures for the period in
question and admits that State Plan Amendment 75-948 submitted December
18, 1975, by deleting the provisions for emergency assistance, waived
the State's claim for FFP for the expenditures during the period in
question. The State acknowledges that the effective date of an amended
provision of a state plan is the first day of the calendar quarter in
which an approvable amendment is submitted. *
TheState contends that 45 CFR Sec. 205.5 and the requirement for
filing state plan amendments are not part of the Social Security Act,
but are the means for an efficient administration of the Act. The State
also contends that these requirements must be balanced on the one hand
by a need for fulfilling the efficient administration of the Act and on
the other hand with a regard to achieving equity in fulfilling the
purposes of the Act. The State argues that the disallowance has been
solely on grounds of administrative efficiency without consideration of
the circumstances that resulted in termination of FFP in the state
program for a temporary period of time.
The State explains that it amended its plan, deleting the provisions
for emergency assistance, as a result of the Federal court order in
Kozinski. The State points out that it did not appeal the court order
for fear that an unsuccessful appeal might establish far reaching and
expanded concepts of assistance which would have impaired the State's
ability to secure from its legislature continued financing for the
emergency assistance program.
The State believes that the U.S. Supreme Court decision in Quern,
supra, indicates that the Federal District Court erred in its opinion
regarding the eligibility of the Wisconsin emergency assistance program
for FFP. Moreover, the State asserts that, throughout the life of the
Wisconsin emergency assistance program, eligibility conditions and
benefits available to individuals were identical to those required by
Federal regulation, and that the Wisconsin program was administered in
accordance with the broad purposes of the Social Security Act. The
State further asserts that the program complied with all the specific
requirements of the Federal agency administering the Act with the
exception that Wisconsin did not, during the period, have an approved
state plan. Therefore, the State is seeking FFP for the program during
the years in question.
Discussion
Although Wisconsin states that it continued to comply with all
requirements for an emergency assistance program after it withdrew its
election, the fact that it did not provide for an emergency assistance
program in its state plan precluded FFP for such expenditures. The
Social Security Act requires a state which wishes to participate in the
emergency assistance program to specifically make provision for such a
program in its state plan.
If a state were to amend its state plan so as to remove existing
provisions for emergency assistance, the state, in order to again be
eligible for FFP, would have to submit a new state plan amendment
providing for emergency assistance. Once a new plan amendment were
filed, 45 CFR Sec. 233.120(b) would provide FFP for emergency assistance
expenditures "(beginning) with the effective date of the approval of the
amendment to the State plan for AFDC which provides for emergency
assistance to needy families pursuant to section 406(e) of the Act." In
accordance with the provisions of 45 CFR Sec. 201.3(g), the earliest
possible effective date of the state plan amendment, once Wisconsin
reinstituted the emergency assistance program, was July 1, 1978.
The State claims that it withdrew its claim for FFP in the emergency
assistance program due to the Federal court order in Kozinski, supra,
and cites the Suprem Court Decision in Quern, supra, as an indication
that the Federal District Court erred in its opinion regarding the
eligibility of Wisconsin's emergency assistance program for FFP. That
the Federal District Court erred in Wisconsin's situation in light of
the subsequent Supreme Court decision in Quern does not require this
Board to reach a contrary conclusion. The issues before the Board are
distinguishable from Quern. In Quern, the Supreme Court held that Sec.
406(e) defines the permissible scope of an emergency assistance program,
but that section does not impose mandatory eligibility standards on
those states electing to participate in that program. In the case
before this Board, the Agency is disallowing FFP for a period during
which the State did not include provisions in its state plan for
emergency assistance as required by the Act. The Agency does not
question the State's right to limit eligibility under an emergency
assistance program, as was the case in Quern, but contends that if a
state chooses not to include an emergency assistance program in its
state plan, then, as a consequence FFP is not available for these costs.
The State contends that the effective date provision, 45 CFR Sec.
201.3(g), is a regulation of administrative efficiency which should not
bar the state plan amendment from relating back to the period for which
there was no state plan provision for an emergency assistance program.
(Application for Review, page 2). The Board is not reviewing the
question whether the Agency has authority to do what the State asks.
The Agency has chosen not to act as the State requests, and we find no
evidence in the record of any abuse of discretion. In Oregon State-wide
Allocation Plan, DGAB Docket No. 75-7, Decision No. 22, this Board held
that it will not substitute its discretion for that of the Agency where
the Agency's decision is in accordance with the rules and the Agency's
exercise of its discretion is reasonable. (See, e.g. Harrison County
Community Action Agency, Inc., DGAB Docket Nos. 75-5 and 76-7, Decision
Nos. 35 and 36, March 14, 1977.) The Board concludes that the Agency's
decision in this instance was in accordance with the regulation and was
reasonable in light of the fact that it would be difficult for the
Agency to retroactively monitor compliance of the State plan.
Furthermore, the State has set forth the equitable argument that the
Board, rather than being bound by regulation, should look to the puposes
of the Act and the specific circumstances of this case so as to find for
the State. The Board has upheld Agency determinations, despite
equitable arguments advanced by grantees, where the Board has found that
the statutory and regulatory authority for such determinations is clear
and where a regulation on which the determinations are based has been
validly promulgated and is consistent with the statute. (See, e.g.,
Board Decisions: Vermont State-Wide Cost Allocation Plan, DGAB Docket
No. 79-198, Decision No. 84, February 26, 1980; American Foundation for
Negro Affairs, DGAB Docket No. 79-4, Decision No. 73, December 28, 1979;
New Mexico Department of Human Services, DGAB Docket Nos. 78-32-NM-HC,
78-33-NM-HC, 79-37-NM-HC, Decision No. 70, December 11, 1979; Oregon
State-wide Cost Allocation Plan, DGAB Docket No. 75-7, Decision No. 22,
June 25, 1976). Such a situation exists in this dispute.
Conclusion
For the foregoing reasons, we conclude that this disallowance should
be upheld. * The State asserts that the effective date provision in the
regulations should not be construed so as to mandate a disallowance
under the facts of this case. The State cites 45 CFR Sec. 205.5 for
this proposition even though the Board specifically brought to the
State's attention the fact that the disallowance was based on 45 CFR
Sec. 201.3(g). Since the State has offered no explanation for the
substitution of 45 CFR Sec. 205.5 for 45 CFR Sec. 201.3(g), the Board
will consider the provision as it appears in 45 CFR 201.3(g). The Board
considers this section applicable in this case inasmuch as it applies to
plan amendments that provide additional assistance or