Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Appellate Division
SUBJECT: New York State Department of Social Services
DATE: August 2, 1995
Docket No. A-95-138
Decision No. 1527
DECISION
The New York State Department of Social Services (New
York) appealed a determination by the Administration for
Children and Families (ACF) disallowing $41,490 in
federal financial participation (FFP) claimed for the
quarter ended December 31, 1994 under title IV-E of the
Social Security Act (Act) for foster care maintenance
payments. 1/ The payments were made on behalf of
children living in foster care placements with a
relative. ACF found that the children had been living
with a relative for more than six months prior to the
initiation of the court proceedings that determined that
the child should be removed from a prior home because the
child's continuance in that home would be contrary to the
child's welfare. ACF concluded that the children were
ineligible for IV-E funding because they were not removed
from the contrary-to-the-welfare home as the result of a
judicial determination, as required by section 472(a)(1)
of the Act. This conclusion was based on ACF's
interpretation of section 472(a)(1) as requiring the
child's physical removal from the contrary-to-the welfare
home within six months prior to the initiation of court
proceedings.
New York stated in its notice of appeal that the issues
in the instant case were the same as those presented in
Dockets No. A-93-219, A-94-26, A-94-64, A-94-137,
A-94-159 (See New York State Dept. of Social Services,
DAB No. 1485 (1994)), and Docket No. A-94-174 (See New
York State Dept. of Social Services, DAB No. 1492
(1994)). New York requested that the Board issue a
summary decision consistent with the holdings in DAB Nos.
1485 and 1492, and consolidate the appeal of issues
concerning calculation of the disallowance with Docket
Nos. A-94-188, A-94-205, A-95-63, A-95-80, and A-95-110.
Counsel for ACF did not object.
The Board concluded in the two prior decisions that ACF's
interpretation of section 472(a)(1) was a reasonable
interpretation (and perhaps the only reasonable
interpretation) of the language of the statute as a
whole. In addition, the Board found that ACF's
interpretation was supported by the legislative history
of the title IV-E program and furthers the goals of the
program. The Board also rejected New York's argument
that ACF's interpretation constituted a legislative rule
which was invalid because it was not issued pursuant to
notice and comment rulemaking under the Administrative
Procedure Act, finding that it was instead an
interpretative rule of which New York had timely, actual
notice. Finally, the Board rejected New York's argument
that it was improper for ACF to disallow a portion of the
claims without first deferring or auditing them.
However, the Board upheld the disallowances in principle
only, and pursuant to the parties' agreement, the Board
deferred consideration of arguments raised by New York
concerning how ACF calculated the disallowances. New
York subsequently re-appealed calculation issues from
both appeals. The Board docketed the new appeals as
Dockets Nos. A-94-188 and A-94-205, and consolidated them
for briefing purposes.
New York subsequently appealed the disallowance of FFP
claimed for foster care maintenance payments for the
quarters ended March 31, 1994, June 30, 1994, and
September 30, 1994, in Board Docket Nos. A-95-24,
A-95-59, and A-95-92. Pursuant to New York's request in
those appeals, the Board issued summary decisions
consistent with the holdings in DAB Nos. 1485 and 1492.
See New York State Dept. of Social Services, DAB No. 1505
(1995); New York State Dept. of Social Services, DAB No.
1510 (1995); and New York State Dept. of Social Services,
DAB No. 1514 (1995). The appeals of issues concerning
calculation of the disallowance in Docket Nos. A-95-24,
A-95-59, and A-95-92 were then assigned Docket Nos.
A-95-63, A-95-80, and A-95-110, and consolidated with
Docket Nos. A-94-188 and A-94-205.
Conclusion
Accordingly, based on the analysis in DAB Nos. 1485,
1492, 1505, 1510, and 1514, we conclude that ACF properly
found ineligible for IV-E funding children who were not
physically removed from home within six months prior to
the initiation of court proceedings resulting in a
judicial determination that continuation in the home was
contrary to the child's welfare. We therefore uphold the
disallowance in principle. Since New York has requested
the Board to consider New York's arguments concerning the
calculation of the disallowance, the Board will schedule
further proceedings for this purpose under Board Docket
No. A-95-178, in consolidation with New York's appeals in
Board Docket Nos. A-94-188, A-94-205, A-95-63, A-95-80,
and A-95-110.
Judith A. Ballard
Cecilia Sparks Ford
Donald F. Garrett
Presiding Board Member
1. The disallowance at issue here was part of a
disallowance totalling $59,203,204 in title IV-E funds
which also included funds claimed as various title IV-E
administrative costs. This decision concerns only the
disallowance of claims for maintenance payments; the
other portions of the disallowance have been assigned
Docket Nos. A-95-140, A-95-141, and A-95-142 and will be
considered separately.