Pennsylvania Department of Public Welfare

The Pennsylvania Department of Public Welfare (Pennsylvania) appealed two determinations by the Administration for Children and Families (ACF) disallowing federal financial participation (FFP) claimed under title IV-E of the Social Security Act (Act) (docketed by the Board as A-95-137 and A-95-177).⁽¹⁾ The disallowance was based on a review by ACF of foster care maintenance payments made by Philadelphia County in fiscal years 1988 and 1989 on behalf of children in foster care. ACF arrived at the disallowance amount by projecting the results of its review of a sample of payments to the universe from which the sample was drawn. The appeals, filed by Pennsylvania in 1995, were stayed pending ACF's review of additional documentation submitted by Pennsylvania. The parties ultimately entered into a settlement agreement, following which Pennsylvania conceded that additional payments were ineligible for FFP, leaving in dispute 41 sample payments that ACF found ineligible on the ground that the court order removing the child from home lacked the determination required by section 472(a)(1) of the Act that continuation in the home was contrary to the child's welfare.

The settlement agreement stipulated that the issue before the Board is whether the payments fall within an "exception" made by ACF to the statutory requirement for a "contrary to the welfare" determination. The exception provides for FFP where a court order lacks an express "contrary to the welfare" determination if "State law unambiguously requires that removal may only be based on a determination that remaining in the home would be contrary to the child's welfare . . ." and the State can show that "the court order is expressly based on that law . . . ." ACYF-PIQ-86-02 (May 8, 1986). Both parties agreed that section 6351(b)(1) of Pennsylvania's Juvenile Act, as amended effective February 13, 1987, requires that a "contrary to the welfare" determination be made prior to a child's removal from home. Thus, the sole issue before us is whether the court orders in question are expressly based on that statutory requirement.

As discussed below, we conclude that none of the court orders are expressly based on the statutory requirement for a "contrary to the welfare" determination. Accordingly, we uphold the disallowances with respect to the 41 contested sample payments.

Statutory Background and ACF Interpretations

Under title IV-E of the Act, federal matching of state foster care maintenance payments is available for children in foster care who otherwise would have been eligible for Aid to Families with Dependent Children (AFDC) under title IV-A of the Act.⁽²⁾ Prior to the enactment of title IV-E (in the Adoption Assistance and Child Welfare Act of 1980, Public Law No. 96-272), funding for foster care maintenance payments was available under title IV-A. States were given until October 1, 1982 to begin operating under approved title IV-E plans.

Section 472(a) provides in pertinent part that foster care maintenance payments will be available for--

a child who would meet the [AFDC eligibility] requirements . . . but for his removal from the home of a relative . . . , if--

(1) the removal from the home . . . was the result of a judicial determination to the effect that continuation therein would be contrary to the child's welfare and (effective October 1, 1983) that reasonable efforts of the type described in section 471(a)(15) of this title have been made . . .

Section 471(a)15) in turn requires that, effective October 1, 1983, a state plan under title IV-E must provide that--

in each case, reasonable efforts will be made (A) prior to the placement of a child in foster care, to prevent or eliminate the need for removal of the child from his home, and (B) to make it possible for the child to return to his home.

The legislative history of Public Law No. 96-272 makes clear that Congress was concerned that children were being removed from their homes unnecessarily and placed in foster care. In discussing the requirement for a judicial determination, the relevant Senate committee report described such a determination as "an important safeguard against inappropriate [state] agency action." Sen. Rep. No. 336, 96th Cong., 1st Sess. 16 (1979).

The regulations implementing Public Law No. 96-272 (at 45 C.F.R. Part 1356) do not elaborate on the statutory judicial determination requirement. However, in guidance issued to its IV-E reviewers on August 14, 1985, the Administration for Children, Youth and Families (ACYF), a subagency of ACF, explained that the court order (in other than voluntary placements) "must contain a statement to the effect that continuation of residence at home is contrary to the welfare of the child or that placement is in the best interests of the child." The guide also explained that, after October 1, 1983, the court order must state either that "reasonable efforts were made to prevent removal from the home" or "it was not appropriate or in the best interests of the child to prevent removal from the home." ACYF-IM-85-25, Attachment A, Title IV-E Foster Care Eligibility Review Checklist Guide, at 2-3.

The checklist for title IV-E reviews included in ACYF-IM-85-25 gave rise to questions about the judicial determination requirement which were then addressed in ACYF-PIQ-86-02 (May 8, 1986) (Pennsylvania Ex. 2). That issuance explained circumstances which warranted a finding that the appropriate judicial determination had been made, even where the court order itself did not contain language to satisfy the statutory requirements. The issuance stated in pertinent part:

The fact that State laws include generic provisions referring to a class of children is not sufficient to satisfy the requirements of section 472, which relate to an individual determination for each child. However, if State law unambiguously requires that removal may only be based on a determination that remaining in the home would be contrary to the child's welfare (and in the appropriate circumstances, that removal can only be ordered after reasonable efforts to prevent removal have been made), it must be assumed that a judge who orders a child's removal from the home in accordance with that State law does so only for the reasons authorized by the State statute. This conclusion can be drawn only if the State law clearly allows removal under no other circumstances except those required under section 472(a)(1) of the Act. If a State can show that it has such a clear and unequivocal State law, and if the court order is expressly based on that law, then the order can be accepted as sufficient evidence that the required determinations have been made.

ACYF-PIQ-86-02, at 2-3 (emphasis in original).

The Board has previously held "that a court order could be 'expressly based' on a state law within the meaning of the PIQ even if it does not specifically cite the state law, as long as there was other evidence in the order that the court intended to rely on that law." See,e.g., Illinois Dept. of Children and Family Services, DAB No. 1564, at 7 (1996), citing West Virginia Dept. of Health and Human Services, DAB No. 1257 (1991). In DAB No. 1564, the Board found that the requirement for a "reasonable efforts" determination was met where court orders were expressly based on a state statute requiring such a determination. The Board stated in part that "when the contested court orders contain language that tracks or follows significant or unique language from one of the two statutes [requiring a "reasonable efforts" determination] relied upon by Illinois and when there are other indicia that the court was applying the particular statute, these cases may be viewed as having complied with the [reasonable efforts] determination." DAB No. 1564, at 11. The "other indicia" that the court was applying the statute which are noted in DAB No. 1564 included that the structure of the order tracked the statutory structure; the orders listed all or most of the various disposition options set out in the statute; and the dispositions pursuant to these orders were consistent with the dispositions authorized by the statute.

ACYF-PIQ-86-02 also explained that language in a petition submitted to a court would not suffice to meet the requirements for a judicial determination unless the court order expressly adopted the relevant language of the petition and made clear that a judicial determination had been made. Id. at 5.

On August 11, 1986, Dodie Livingston, Commissioner for ACYF, issued a memorandum to Regional Administrators and Regional Program Directors (the Livingston memorandum) which further elaborated on the documentation required for the judicial determination requirement. Pennsylvania Ex. 3. The Livingston memorandum noted that, prior to the transfer of the foster care program from title IV-A to title IV-E, ACYF's policy, set out in SRS-PIQ-75-21, dated April 2, 1975, was that the requirement for a "contrary to the welfare" determination was satisfied where there was "a petition to the court stating the reason for the agency's request for custody, followed by a court order granting the agency's petition for custody . . . ." The Livingston memorandum further stated that, because some state agencies believed, until the issuance of ACYF-PIQ-86-02 on May 8, 1986, that this practice continued to be acceptable in the title IV-E program--

disallowances will not be taken where the State agency was following the precedent established in 1975, in cases in which the child entered care prior to October 1, 1986. This will allow States time to advise their courts that proper documentation of the judicial determination must be available for each child removed from his home by the court in order to be eligible under title IV-E. Payments will not be considered in error for a title IV-E financial review for this reason . . . .

Id. (emphasis in original).

Factual Background

Each of the court orders in question is on a form captioned "Dependency Review Order" that contains certain pre-printed provisions. Section 1 of the form provides for the selection of one of several "decisions" with respect to the child in question: return to the parents or legal guardian, continuation in foster care for a specified number of months, placement for adoption, continuation in foster care on a permanent/long-term basis, or other. The pre-printed form also permits the court to specify whether there "has/has not been compliance with the plan" (section 2); whether there "has/has not been progress made toward alleviating the circumstances which necessitated the original placement" (section 3); and the date by which the court projects "that the goal for the child may be achieved" (section 4). In addition, the form contains a statement that "[t]he Court finds that the Petitioner is taking reasonable efforts to reunify the child with his/her family, if applicable, and if the goal is not to return home, the absence of efforts to make it possible for the child to return home is reasonable" (section 5). Section 6 contains the word "Other" followed by a blank line. Finally, the form contains a space for the court to specify the date of a "dispositional review hearing" and lists the issues at the hearing. The pre-printed language does not contain an express "contrary to the welfare" or "best interests of the child" determination, a citation to the "contrary to the welfare" requirement in Pennsylvania's Juvenile Act, or any other citation to the Juvenile Act.

Portions of the form (section 1, section 5, and the last, unnumbered section) correspond to provisions of section 6351 of the Juvenile Act (section 6351(g), section 6351(b)(4), and sections 6351(e) and (f), respectively). The latter provisions all pertain to review of the disposition of a child who has already been adjudicated dependent and committed to DHS. The requirement for a "contrary to the welfare" determination is found in a different part of section 6351, pertaining to removal of the child from home.⁽³⁾

In section 1 of each of the forms in question here except the form for sample #8197, the words "commit to DHS" or similar wording appear in stamped or handwritten form under the category "other."⁽⁴⁾ ACF Ex. 2. There is no dispute that this language authorized the transfer of custody of the child to DHS for placement in foster care and thus constituted an order removing the child from home. On most of the orders in question here, the court also specified a hearing date several months after the date of the order in either the space intended for the date of the dispositional review hearing or the blank space following "Other" in section 6. The pre-printed language is not checked, circled or completed in any other manner.

We note preliminarily that our inquiry here is a limited one: whether Pennsylvania has met its burden of documenting its claims for FFP in the payments. As the Board has previously stated:

The denial of FFP in those cases where there is inadequate documentation does not necessarily mean that the court's action was unsound or that the proper social work was not done, but simply represents a finding that the state agency has failed to document that its claims met the conditions Congress established as a prerequisite for title IV-E funding.

DAB No. 1257, at 10. As discussed below, we conclude that Pennsylvania has not met its burden of documenting the claims in question here.

Pennsylvania took the position that the court orders in question are expressly based on a state law requiring a "contrary to the welfare" determination within the meaning of ACYF-PIQ-86-02 as interpreted by the Board in DAB No. 1564. Pennsylvania contended that not only do the orders at issue here track some of the language of section 6351 but the indicia specified in DAB No. 1564 are also present. Thus, according to Pennsylvania, the payments in question qualified for FFP since there is no dispute that section 6351 requires a "contrary to the welfare" determination. We disagree for the following reasons.

First, the handwritten or stamped words "commit to DHS" that the court added to the pre-printed language in the orders in question here are virtually identical to language on which Pennsylvania relied in the appeal resulting in DAB No. 1392 as showing that the court order was based on the section of the Juvenile Act that requires a "contrary to the welfare" determination.⁽⁵⁾ The Board held that these words "merely indicate that the court made a disposition that was authorized by section 6351" and that the inclusion of these words in the order "provides no evidence that the court actually complied with all of the requirements of section 6351, including the requirement for a 'contrary to the welfare' determination." Pennsylvania Dept. of Public Welfare, Ruling on Reconsideration of DAB No. 1392, at 4 (1993). Pennsylvania did not here rely on any of the handwritten or stamped words considered by the Board in that case.⁽⁷⁾ Nevertheless, the Board's holding that the handwritten or stamped words did not show the court's reliance on section 6351 is still significant since those words were presumably added by the court or with the court's approval to address the particular circumstances of the sample payments in question.

In addition, the pre-printed language on which Pennsylvania relied as demonstrating that the courts made the requisite "contrary to the welfare" determinations, including the title on the order form, references dependency review hearings, not initial removal hearings. Provisions for both types of hearings are in section 6351 of the Juvenile Act. There is no requirement in section 6351, however, that a "contrary to the welfare" determination be made during a dependency review hearing. The pre-printed language sets out the requirements for dependency reviews as opposed to removal orders. Thus, the pre-printed language fails to support Pennsylvania's argument that the court was mindful of the "contrary to the welfare" requirement in issuing the order. Rather, the pre-printed language suggests merely that the court was mindful of the requirements for dependency reviews, which do not include a "contrary to the welfare" requirement.

Pennsylvania argued that the court was nevertheless mindful of other requirements in the same statutory section from which the pre-printed language was drawn, including the "contrary to the welfare" requirement applicable to removal orders. However, this conclusion is unwarranted under the circumstances here. The use of a pre-printed dependency review order to effectuate removal of the child creates some ambiguity regarding which set of requirements the court was actually focusing on--the State law dependency review requirements set out in the pre-print or the initial removal requirements of title IV-E of the Act.

However, it seems reasonable to presume that if a court was focusing on the specific requirements unique to removal orders, it would have at least made some particular reference to those removal requirements when it used the pre-printed dependency review order.⁽⁸⁾

Moreover, Pennsylvania's reliance on DAB No. 1564 is misplaced. Pennsylvania read that decision as holding that ACF's "exception" to ACYF-PIQ-86-02 applies where the court order contains any language that tracks language from a state statute requiring a judicial "contrary to the welfare" or "reasonable efforts" determination. However, the pre-printed language on the orders in question there tracked part of the very provision in the state statute which contained the "reasonable efforts" requirement. Accordingly, there was evidence in DAB No. 1564 that the court was relying on the "reasonable efforts" requirement when it ordered the child removed from home.

Pennsylvania also argued that the courts may have used pre-printed dependency review orders here because the children had already been temporarily removed from their homes pursuant to a voluntary placement agreement or as a result of prior court proceedings.⁽⁹⁾ According to Pennsylvania, since the child was already out of the home, it was appropriate to use pre-printed language pertaining to a review of the child's disposition. Pennsylvania did not argue, however, that there was no need for a "contrary to the welfare" determination in these cases. The use of a dependency review order, even if understandable in these circumstances, does not satisfy the requirement for such a determination. Pennsylvania cannot reasonably suggest on the one hand that the courts used the pre-printed dependency review orders on the misguided impression that the proceedings were tantamount to dependency reviews and argue on the other hand that the courts were not specifically focusing on the requirements in section 6351 applicable to such reviews but rather on the requirements in that section for removing the child from home.

We also disagree with Pennsylvania that there are any "other indicia" present here that demonstrate that the court made a "contrary to the welfare" determination. The "other indicia" cited by Pennsylvania, such as that the structure of the order tracks the statutory structure of section 6351, more readily support the conclusion that the court was applying the requirements applicable to a dependency review order than a removal order. The pre-printed language from its title on down focuses on the requirements in section 6351 pertaining to dependency reviews, not on any unique requirements pertaining to removal orders.

Finally, we note that the statutory authority for a "contrary to the welfare" determination in section 6351(b) of the Juvenile Act required Pennsylvania courts to enter such a determination "on the record or in the order of court." Thus, if the court had been focusing on the "contrary to the welfare" requirement when it issued each of the removal orders in question here, the court presumably would have made an express "contrary to the welfare" determination in the order.⁽¹⁰⁾

In summary, it is simply not enough under the circumstances of these cases for the court order to reference requirements of section 6351, because that section also authorizes a dependency review process that does not require a "contrary to the welfare" determination and the pre-printed language relied upon by Pennsylvania suggests that the court was mindful only of the requirements for that process.

Pennsylvania also argued that there were other grounds for finding that the court orders were based on the requirement in section 6351 for a "contrary to the welfare" determination. Specifically, Pennsylvania argued that the petitions for the removal orders "corroborate[] that the Court had evidence to support a ["contrary to the welfare"] determination . . ." and that the case was before the court for "a dependency adjudication and disposition per � 6351." Pennsylvania Br. dated 1/6/99, at 5-6. However, as noted earlier, ACYF-PIQ-86-02 indicates that the language in a petition submitted to a court would not suffice to meet the "contrary to the welfare" requirement unless the court order expressly adopts the relevant language of the petition and makes clear that a judicial determination had been made. Pennsylvania did not assert that these criteria were met in the case of the payments in question here. While the Livingston memorandum, discussed above, made an exception to ACYF-PIQ-86-02 in this regard for cases in which the child entered foster care before October 1, 1986, there is no dispute that all 41 sample payments in question here involve removals on or after October 1, 1986.⁽¹¹⁾ Thus, the contents of the petitions do not suffice as evidence that the court made "contrary to the welfare" determinations with respect to the children for whom these payments were made.

Pennsylvania argued in addition that, even if the Livingston memorandum did not apply directly here, ACYF-PIQ-86-02 should be construed liberally because the Livingston memorandum "showed the PIQ to be the first notice given to the State that the Agency intended to change course and apply a policy of strict enforcement of 'contrary to the welfare' documentation requirements." Pennsylvania Br. dated 1/6/99, at 8 (emphasis in original). However, the Board rejected a similar argument in Pennsylvania Dept. of Public Welfare, DAB No. 1508 (1995), on the ground that the Livingston memorandum is limited to addressing the circumstances under which a petition for state custody of a child can be used to show that the court made a "contrary to the welfare" determination, noting further:

Nothing in the Livingston memorandum (or elsewhere) indicates that there was a policy under the title IV-A foster care program which presumed that if one of the potentially applicable state statutes authorizing a court to remove a child from home required a ["contrary to the welfare" determination], the court must have relied on this statute and met its requirements in ordering a specific child's removal.

DAB No. 1508, at 26.

Pennsylvania argued further that it could be inferred from the fact that the pre-printed form contains a "reasonable efforts" determination that the court also made a "contrary to the welfare" determination. This argument has no merit. As noted above, the "reasonable efforts" language on the form pertains to the situation where the child has already been removed from home, so there is no basis for making any inference about a determination the court might have made before the child was removed from home. Moreover, the Board addressed the same argument in Oregon Dept. of Human Resources, DAB No. 1586 (1996), where it stated that--

a [contrary to the welfare] determination is generally based on comprehensive information about the child's family situation. To make a [reasonable efforts] determination, a court might merely ascertain, for example, that the state agency's attempts to provide services to the family were rejected. Thus, we do not agree that a court which made a [reasonable efforts] determination in a temporary custody order could necessarily have made a [contrary to the welfare] determination.

DAB No. 1586, at 11. Similarly, the Board stated in DAB No. 1257 that title IV-E "clearly requires a reasonable efforts determination separate from the best interests/contrary to the welfare determination." DAB No. 1257, at 11.

Finally, Pennsylvania suggested that it was inconsistent for ACF to refuse to accept the pre-printed language in the court orders as evidence of the court's reliance on the "contrary to the welfare" requirement in section 6351 while accepting the pre-printed language as meeting the requirement for a "reasonable efforts" determination. The pre-printed language states that "[t]he Court finds that Petitioner is taking reasonable efforts to reunify the child with his/her family, if applicable, and if the goal is not to return home, the absence of efforts to make it possible for the child to return home is reasonable." However, there is no indication in the record as to whether ACF in fact found that this language met the "reasonable efforts" requirement prior to or as part of the settlement agreement, which limited the issue before us to whether the requirement for a "contrary to the welfare" determination was met. In any event, it would not have been inconsistent with ACF's position here for ACF to have found that the "reasonable efforts" requirement was satisfied by the pre-printed language since that language contains an express statement regarding reasonable efforts that was appropriate either where a child who had been temporarily removed from home was being adjudicated dependent and committed to DHS or where the court was conducting a dependency review.

For the foregoing reasons, we conclude that, for each of the 41 sample cases, there is insufficient documentation to show that the court made a "contrary to the welfare" determination, as required by section 472(a)(1) of the Act, when it ordered the removal from home of the children at issue. Accordingly, we uphold the disallowances relating to these sample payments.

1. The determination in Docket No. A-95-137 was dated May 26, 1995 and disallowed a total of $4,958,932 in FFP. The determination in Docket No. A-97-177 was dated July 6, 1995 and disallowed a total of $6,786,678 in FFP.

2. The Personal Responsibility and Work Opportunity Reconciliation Act of 1996, Public Law No. 104-193, repealed the title IV-A program and amended title IV-E so that it refers to certain provisions of former title IV-A as they were in effect on June 1, 1995.

3. According to Pennsylvania, section 1 of the form used for the orders corresponds to section 6351(a) of the Juvenile Act, section 5 corresponds to section 6351(b)(2), and the last, unnumbered section corresponds to sections 6351(e) and 6351(f). See comparison at Pennsylvania Br. dated 6/6/99, Appendix "A." Pennsylvania failed to recognize significant differences in the first two sets of allegedly corresponding provisions, however. Section 1 of the form lists options for the child's disposition after the child has been removed from home and placed in foster care (including return to the parents or legal guardian, continuation in foster care for a specified number of months, placement for adoption, and continuation in foster care on a permanent/long-term basis). This section therefore does not correspond to section 6351(a), which lists options available when a court is considering a petition to remove the child from home (including options to permit the child to remain with his parents, guardian or other custodian, to transfer temporary legal custody of the child to a qualified individual, public or private agency, and to transfer custody to the juvenile court of another state). Section 5 of the form requires a determination of whether reasonable efforts are being made to reunify the child with the family (or whether the absence of such efforts is reasonable). This section therefore does not correspond to section 6351(b)(2), which requires a determination of whether reasonable efforts were made prior to placement of the child to prevent removal of the child from home.

4. The court order for sample #8197 has the handwritten notation "Cont at the request of DHS." Since this was not an order removing the child from home, it is not clear that the payment would be eligible for FFP even assuming that this order contained a "contrary to the welfare" determination, which we conclude it does not.

5. Section 6351 was amended after the period in question in DAB No. 1392 to add requirements for periodic "disposition review" hearings following a child's removal from home as well as for a "reasonable efforts" determination prior to continuing the child in foster care .⁽⁶⁾

6. This express "contrary to the welfare" requirement is in addition to the requirement present in both the earlier and amended versions of the statute which the parties in DAB No. 1392 agreed "in effect" required a "contrary to the welfare" determination." DAB No. 1392, at 11; Ruling on Reconsideration at 3. (The district court that remanded DAB No. 1392 to the Board appears to have overlooked the parties' agreement, and erroneously characterized the earlier version of section 6351 as not containing a "contrary to the welfare" determination.) - -- --

7. Pennsylvania did argue generally that the precedential value of this holding is undercut because on appeal to District Court, DAB No. 1392 was remanded to the Board. However, the court found that it was not an abuse of discretion for the Board to conclude that the words "commit to DHS" did not establish that the order was based on section 6351. The court remanded only because the Board had not considered whether, pursuant to the Livingston memorandum (of which Pennsylvania and the Board had been unaware), the language of the petitions for removal was a basis for finding that the court made a "contrary to the welfare" determination. Pennsylvania Dep't of Public Welfare v. U.S. Dep't of Health and Human Services, No. 93-647 (W.D. Pa. Feb. 24, 1995).

8. ACF took the position that the orders needed to be based on the particular subsection of section 6351 requiring a "contrary to the welfare" determination to establish that the court made such a determination. In support of this position, ACF cited the Board's statement in Pennsylvania Dept. of Public Welfare, Ruling on Reconsideration of DAB No. 1392 (1993), that "mere evidence that a court was operating within the framework of an entire Juvenile Act covering delinquent and dependent children (that included in one of its sections a 'contrary to the welfare' requirement) is insufficient to establish that the court was expressly basing its order on the discrete 'contrary to the welfare' requirement." At 3-4. We need not reach this question since, as just discussed, it is unclear in the case of the orders in question that the court was focusing on any requirements of section 6351 other than those for a dependency review order, which did not include a "contrary to the welfare" requirement.

9. Pennsylvania noted that there was one sample payment, #8197, for which this was not the case.

10. Pennsylvania did not provide any evidence, such as a transcript of the court proceedings, that the court made such a determination on the record.

11. Pennsylvania asserted that the "portion" of the Livingston memorandum on which it relied "was plainly intended to govern all cases subject to the PIQ and not just those children who entered care prior to October 1, 1996." Pennsylvania Reply Br. dated 7/1/99, at 6. However, the further exception created by the Livingston memorandum is expressly limited to cases in which the child was removed from home prior to October 1, 1986. Pennsylvania Ex. 3 at 2.