Department of Health and Human Services
Departmental Appeals Board
AFDC QUALITY CONTROL REVIEW PANEL
SUBJECT: New Mexico Human Services
Department
Docket No. A-92-78
DATE: July 13, 1992
DECISION
The New Mexico Human Services Department (State) appealed
the quality
control (QC) review determination of the
Regional Administrator of the
Administration for Children
and Families (ACF) in State QC review number
2411. ACF
found that an Aid to Families with Dependent Children
(AFDC) grant recipient was overpaid as a result of the
recipient's
failure to furnish a social security number
(SSN) for her youngest child
prior to the review date.
The State took the position that there was
no QC error
because the recipient applied for the SSN in a timely
fashion.
For the reasons discussed below, we sustain ACF's
determination.
Statutory and Regulatory Provisions Relating to
Enumeration
Section 1137(a)(1) of the Social Security Act (Act)
provides that, as a
condition of eligibility for AFDC
payments under title IV-A of the Act, a
state shall
require that "each applicant for or recipient of benefits
.
. . furnish to the State his social security account
number . . .
." 1/ Regulations implementing this
requirement (commonly
referred to as the "enumeration
requirement") were issued in 1986.
Section 205.52 of 45
C.F.R. states in pertinent part that a state title IV-A
plan must provide that --
(a) As a condition of eligibility, each applicant
for or
recipient of aid will be required:
(1) To furnish to the State or local agency a
social
security account number, hereinafter referred
to as the SSN . . . and
(2) If he cannot furnish a SSN (either because
such SSN has
not been issued or is not known), to
apply for such number through
procedures adopted by
the State or local agency with the Social Security
Administration. If such procedures are not in
effect, the
applicant or recipient shall apply
directly for such number, submit
verification of
such application, and provide the number upon its
receipt.
* * *
(c) The State or local agency will not deny, delay,
or discontinue
assistance pending the issuance or
verification of such numbers if the
applicant or
recipient has complied with the requirements of
paragraph
(a) of this section.
New statutory language relating to the enumeration
requirement was added
to title IV-A by the Omnibus
Reconciliation Act of 1989, which revised the
QC system
for payments made after fiscal year 1990. Section
408(c)(4) of the amended title IV-A states that --
[n]otwithstanding any other provision of this
section, a payment
shall be considered an erroneous
payment if the payment is made to a family
. . . (B)
any member of which is a recipient of aid under a
State plan
approved under this part and does not
have a social security account number
(unless an
application for a social security account number for
the
family member has been filed within 30 days
after the date of application
for such aid).
ACF issued an Appendix W to its Quality Control Manual
(QCM) on August
30, 1990, which it described as "Interim
Policies and Procedures for
Implementation of the Revised
Quality Control System . . . ." The
provisions in
Appendix W concerning the enumeration requirement are
substantially the same as the procedures which were
already in place,
however. Appendix W identifies three
mechanisms for meeting the
enumeration requirement: 1)
the state may have an agreement with the
Social Security
Administration (SSA) through which the local agency
accepts applications for SSNs; 2) the local agency may
refer AFDC
applicants or recipients to the SSA district
office to make direct
application to SSA; or 3) a state
may provide AFDC applicants or recipients
with the
Enumeration at Birth (EAB) option. The last option
permits a mother to apply for a child's SSN through the
hospital where
the child is born. The hospital sends the
necessary information to the
state's vital statistics
office, which in turn transmits the information to
SSA
via magnetic tape for automatic issuance of a SSN.
Appendix W
states that, where this option is used, proof
of application must be
provided for the case file. In
addition, Appendix W states that "the
SSN must be
provided to the agency upon its receipt." Appendix W at
13.
Factual Background
The recipient, E.S., received a $436 AFDC grant for the
review month of
May 1991. The payment amount was
determined based on an assistance
unit which included
E.S. and her four dependent children. The youngest
child, S.L., was born on October 20, 1990. On October
22, 1990,
E.S. applied for a SSN for S.L. through the EAB
procedure. E.S.
received Form SSA-2853 from the hospital
certifying that she had requested a
SSN for S.L. The
SSA-2853 also stated, "You should receive your baby's
Social Security card in about 11 weeks," and contained
the following
note: "Notify your caseworker when you
receive your baby's Social
Security card." State Exhibit
(Ex.) 1, Attachment (Att.) 4. E.S.
presented the SSA-
2853 to the State agency, which added S.L. to the
grant.
2/ The SSN was issued on February 5, 1991, and
received
by E.S. sometime later that month. E.S. first showed
S.L.'s social security card to the State QC reviewer
during a home visit
on June 26, 1991. E.S. had not
previously reported the SSN to the
State agency. 3/
State QC found that the case was eligible for the review
month of May
1991. However, federal QC found that, since
the SSN had not been
reported to the State agency as of
the review date, S.L.'s needs were
incorrectly included
in determining the amount of the grant, resulting in an
overpayment of $63.
Discussion
This Panel has previously sustained a finding of an
erroneous payment
where the SSN of a member of an
assistance unit was received but not
reported as of the
review date. Tennessee Dept. of Human Services,
dated
February 18, 1992 (reaffirmed upon reconsideration, July
13, 1992). The Panel found specifically that the
requirement at 45
C.F.R. � 205.52(a) that an AFDC
applicant or recipient "provide the number
upon its
receipt" could reasonably be interpreted to require a
finding
of an error where the SSN was not in the case
file as of the review
date. 4/ The State argued here,
however, that it should
not be bound by the decision in
Tennessee, since Tennessee failed to raise a
number of
issues which the State contended would require a
different
result if resolved in its favor. We consider
each of these issues
below, concluding that a reversal of
ACF's determination in this case is not
warranted.
1. Whether any overpayment should be excluded from
consideration as
an erroneous payment pursuant to section
408(c)(3)(C) of the Act on the
ground that the State
relied on written federal policy requiring S.L.'s
inclusion in the assistance unit.
The State took the position that, even if the failure to
furnish a SSN
resulted in an overpayment, this was not
properly considered an error for
purposes of the QC
program. The State asserted that it was required to
include S.L. in the assistance unit by various
regulations and official
agency issuances. The State
argued that any resulting overpayment was
therefore not a
QC error under section 408(c)(3)(C) of the Act, which
provides that a payment shall not be considered an
erroneous payment if
it is erroneous solely by reason of
"the State's reliance upon and correct
use of written
statements of Federal policy provided to the State by the
Secretary."
In support of its argument, the State cited SSA-AT-86-1,
(dated January
13, 1986), an agency action transmittal
concerning the implementation of
section 402(a)(38) of
the Act. The State contended that a sibling of
the
dependent child for whom an AFDC application is made is
a mandatory
member of the assistance unit under section
402(a)(38) and that the action
transmittal directs states
"to exclude a mandatory member of the assistance
unit
only when the caretaker relative or the member refuses
to comply
with the enumeration requirement." State
submission dated February 13,
1992, at 6 (emphasis in
original). The State asserted that there was
no evidence
in this case that the recipient refused to comply with
the
enumeration requirement. Thus, in the State's view,
it properly
included S.L. in the grant pursuant to
written federal policy.
We are not persuaded that SSA-AT-86-1 required that S.L.
be included in
the grant under the circumstances of this
case. There is nothing in
this action transmittal which
states that an affirmative act is required in
order to
deny benefits to an individual on the basis of a refusal
to
comply with the enumeration requirement. The section
which refers to a
refusal to comply is captioned "Persons
who fail to cooperate," suggesting
that an individual who
simply fails to follow instructions given as to
reporting
of the SSN is within the scope of the section. Here,
E.S. was notified in writing when she applied for the SSN
that she
should notify her caseworker when she received
S.L.'s SSN. However,
although the SSN was issued and
received by the end of February 1991, E.S.
had not
reported the SSN by the review date, May 1, 1991. In our
view, this is a refusal to comply with the enumeration
requirement in
the absence of any explanation for the
failure to report the SSN for this
length of time.
Accordingly, contrary to the State's argument,
SSA-AT-86-
1 required that S.L. be excluded from the grant.
The State also contended that it was required by 45
C.F.R. � 233.33(a)
and � 233.31(b)(1) to include S.L. in
the assistance unit. Section
233.33(a) requires a state
agency to determine eligibility prospectively
"based on
its best estimate of income and circumstances which will
exist
in the month for which the assistance payment is
made." Section
233.31(b)(1) provides that "[t]his
estimate shall be based on the agency's
reasonable
expectation and knowledge of current, past or future
circumstances." The State argued that it was reasonable
for the
State agency to treat S.L. as a member of the
assistance unit in making a
prospective finding of
eligibility for the review month since the State
agency
had no knowledge or indication that a SSN had been issued
but not
reported.
The cited regulations do not appear to be directly
applicable here since
prospective budgeting is properly
used to compute the amount of assistance
only for the
first one or two months of a grant, and it appears that
E.S. had been receiving assistance for a longer period.
In any
event, we are not persuaded that it was reasonable
for the State agency to
expect that S.L. would meet the
enumeration requirement during the review
month. The
enumeration requirement is not fully met by the filing of
an application for a SSN through the EAB procedure. In
order to
satisfy the enumeration requirement, the SSN
must also be provided to the
state agency upon receipt.
See 45 C.F.R. � 205.52(a)(2). Thus,
the State agency
could not reasonably assume, based solely on the fact
that an application for a SSN had been filed, that S.L.
would still meet
the enumeration requirement as of the
review date. Moreover, the
State's argument that it had
no indication that a SSN had been issued and
not reported
is disingenuous. The State agency knew when the
application for a SSN had been filed and that the SSA-
2853 stated that
the recipient would receive the SSN
about 11 weeks from the date of
application; thus, the
State agency should have expected the SSN to be
reported
before payment was made for the review month.
The State further argued that, pursuant to 45 C.F.R.
� 205.52(c), it was
required to continue providing
assistance based on S.L.'s needs once E.S.
furnished
proof of application for a SSN, despite the fact that the
SSN
was later issued but not reported. We disagree.
Section
205.52(c) precludes a state from denying
assistance "pending issuance or
verification" of the SSN
(emphasis added). The use of the conjunction
"or"
indicates that this prohibition applies in either of two
distinct
situations. Both parties agreed that the term
"verification" refers to
the process through which a
state agency verifies the accuracy of a SSN
reported by a
recipient. Thus, section 205.52(c) provides that a state
cannot deny assistance between the time an AFDC recipient
furnishes
proof of application for a SSN and the time the
SSN is issued (pending
issuance), or between the time the
AFDC recipient reports the SSN and the
time the State
agency verifies the accuracy of the SSN (pending
verification). There is no prohibition on denying
assistance where
a SSN has been received but not
reported.
The State nevertheless argued that section 205.52(c) was
still applicable
here since the State agency did not have
actual knowledge that S.L. had been
issued a SSN and the
regulations do not specify a time for reporting a
SSN.
As previously indicated, however, the State agency knew
approximately when a SSN should have been issued.
Moreover,
section 205.52(a)(2) requires that the SSN be
provided "upon its
receipt." While this language is not
precise, in this case it clearly
required that the SSN
should have been reported within the two months
between
the receipt of the SSN and the review date. Accordingly,
we find no basis for the State's reading of section
205.52(c) as
requiring it to continue to provide
assistance based on S.L.'s needs where
her SSN had been
issued but not reported.
For the reasons discussed above, we conclude that any
overpayment was not
excluded from consideration as an
erroneous payment under section
408(c)(3)(C) of the Act.
2. Whether section 408(c)(4)(B) of the Act precludes
treating the
failure to report a SSN as an error for
purposes of the QC program on the
ground that S.L. timely
applied for a SSN.
The State argued that, although 45 C.F.R. 205.52(a)
requires that a SSN
be reported to the state agency, the
failure to do so is not an error for
purposes of the QC
program under section 408(c)(4)(B) of the Act. In
the
State's view, section 408(c)(4)(B) limits the scope of
the QC review
to determining whether an AFDC recipient
timely submitted an application for
a SSN.
We are not persuaded that section 408(c)(4)(B) has the
effect attributed
to it by the State. Section
408(c)(4)(B) describes one situation in
which an
erroneous payment must be found -- where a recipient
"does not
have a social security account number." The
placement of the phrase
"unless an application for a
social security account number . . . has been
filed
within 30 days . . ." in parentheses indicates that this
is an
exception which only applies where a recipient does
not have a SSN.
There is nothing on the face of section
408(c)(4)(B) which precludes the
finding of an erroneous
payment in other situations, such as where a
recipient
has a SSN but has not reported it.
Moreover, nothing in the legislative history suggests
that Congress
wanted to preclude the finding of a QC
error where a recipient has a SSN
which has not been
reported. Instead, the legislative history
indicates
that the House bill included a provision excluding
technical
errors not resulting in incorrect eligibility
or payment determinations from
QC error rates. However,
this approach was rejected by the conferees,
who stated
that "[t]he following errors would be counted: lack of a
social security number in the file (unless an application
for a number
has been filed) . . . ." H.R. Conf. Rep.
No. 101-386, 101st Cong., 1st
Sess. 928-931. Thus, it is
likely that section 408(c)(4)(B) was
intended merely to
ratify the existing policy of the AFDC QC program to
count enumeration errors as QC errors, not to limit QC
errors in a
manner never expressly considered by
Congress.
Furthermore, the State's reading of section 408(c)(4)(B)
undermines the
purpose of the enumeration requirement.
As the Panel noted in
Tennessee, the purpose of this
requirement is to enable a state agency to
verify an
assistance unit's income in order to determine its
eligibility
for an AFDC grant and the proper benefit
level. If no error could be
found where a recipient
merely established that an application for a SSN had
been
made, there would be no reason to report the SSN, thus
depriving
the state agency of the ability to verify
income.
3. Whether the failure to report a SSN is a procedural
error which
should not be counted as an error for
purposes of the QC program pursuant to
ACF policy.
The State argued that ACF has consistently made a
distinction between
substantive errors and procedural
errors and has not considered procedural
errors as errors
for purposes of the QC program. In support of its
argument, the State noted that the QCM provides at � 3020
that "[t]he QC
review independently establishes and
verifies the facts about each element
of eligibility,"
and further provides at � 3140 that "QC's decision will
be based on whether or not eligibility and payment for
the review month
are factually correct, notwithstanding
any procedural differences [between
federal and state
verification procedures]."
We conclude that the State's reliance on these QCM
provisions is
misplaced. These provisions merely make
the point that federal QC will
independently investigate
the facts on which determinations of eligibility
and
payment amount are based using its own procedures and
will not rely
on a state's fact finding. Even if ACF's
general policy is not to
count procedural errors as QC
errors, however, there is a rational basis for
not
applying this policy here. As discussed above, if a SSN
is not
reported, the underlying purpose of the
requirement for a SSN, to enable the
state agency to
verify an assistance unit's income and correctly
determine eligibility and payment amount, may be
defeated. In
contrast, the failure to comply with other
"procedural" requirements may
have no effect on whether
eligibility and payment amount are correctly
determined.
Accordingly, we conclude that a failure to comply with
the enumeration requirement is not excused by virtue of
any ACF policy
to not treat procedural errors as QC
errors.
4. Whether the QC system is biased in favor of states
which have
arranged for recipients to apply for SSNs
through the state agency since the
recipient is not
required to report the SSN where such an arrangement is
utilized.
The State noted that there is no requirement in the QCM
that a recipient
report a SSN where the recipient applies
for the SSN through the state
agency pursuant to an
agreement between the state and SSA. The State
argued
that since a recipient who applies directly for a SSN
(with SSA
or through the EAB procedure) must report the
SSN to the state agency, the
QC system is biased in favor
of states which have agreements with SSA
(agreement
states). New Mexico is a non-agreement state.
We find no merit in the State's argument. The recipient
is not
required to report the SSN to the state agency in
agreement states because
SSA reports the SSN directly to
the state agency. In non-agreement
states, SSA does not
report the SSN to the state agency; thus, a requirement
for recipient reporting is necessary. Because non-
agreement states
rely on recipient reporting, they may be
more likely than agreement states
to have QC errors
resulting from a failure to comply with the enumeration
requirement. However, since a state has the choice of
being an
agreement state or a non-agreement state, there
is no basis for finding that
the QC system is unfairly
biased in favor of agreement states.
5. Whether ACF's finding of an erroneous payment is
precluded by
section 408(c)(2)(B)(ii) of the Act because,
under New Mexico law, the case
would be found eligible
for AFDC based on evidence in the record showing
that
S.L. had a SSN.
Section 408(c)(2)(B)(ii) of the Act provides that, where
a payment is
made based on a provision of a state's title
IV-A plan which is inconsistent
with federal law, the
payment is not erroneous if the state agency made the
payment in compliance with a court order. The State
argued that
this provision in effect precluded finding an
erroneous payment in this case
because a State fair
hearing officer would find the case eligible if a fair
hearing were held. In support of its position, the State
cited
Cruz v. New Mexico Department of Human Services,
100 N.M. 133, 666 P.2d 1280
(1983), for the proposition
that State law requires the consideration of all
evidence
presented at a fair hearing. The State reasoned that a
fair hearing officer would have to find the case eligible
based on
evidence in the record showing that S.L. had a
SSN regardless of the fact
that the SSN was not reported
to the State agency prior to the review
date.
We conclude that the State's reliance on the Cruz
decision is
misplaced. In that decision, the court
rejected the State's contention
that its fair hearing
procedures excluded evidence not supplied to the
eligibility worker before the adverse action was taken.
The
evidence sought to be excluded showed that Cruz did
not have a present
beneficial interest in certain
property which the eligibility worker found
she had
improperly transferred without receiving a monetary
return. Based on this evidence, the court found that
there had
been no improper transfer and that the case was
eligible. Here,
however, evidence that S.L. had a SSN as
of the review date does not
establish that the case was
eligible since the regulations require that the
SSN be
reported upon receipt. Thus, Cruz is distinguishable on
its
facts.
Moreover, even if the State were correct that Cruz would
require a fair
hearing officer to find the case eligible,
section 408(c)(2)(B)(ii) requires
a court order. The
State did not assert that there had been any court
proceeding in this case, or even an administrative fair
hearing.
Accordingly, section 408(c)(2)(B)(ii) is not
applicable here.
5/
Conclusion
For the foregoing reasons, we conclude that E.S.'s
failure to report her
child's SSN to the State agency
prior to the review date resulted in an
erroneous
payment. We therefore sustain ACF's finding of an
overpayment.
_____________________________
Leslie A. Sussan
_____________________________
Maxine Winerman
_____________________________
Carolyn Reines-Graubard
* * * Footnotes * * *
1. This provision is
part of comprehensive
requirements for an Income and Eligibility
Verification
System which became effective April 1, 1985. Prior to
that date, section 402(a)(25) required an AFDC applicant
or recipient to
furnish a SSN as a condition of
eligibility for title IV-A payments.
2. The record does
not show the date when S.L.
was added to the
grant.
3. When E.S.
was contacted by federal QC on
September 26, 1991, she stated that she
received the
social security card either the last week of February or
the first week of March 1991, and that she reported the
SSN to her
caseworker in March 1991. State Ex. 1, Att.
7, at 2. However,
federal QC concluded based on a
variety of evidence that the SSN was not in
fact reported
until the time of the home visit. Id. Federal QC
also
concluded that E.S. received the SSN sometime in February
1991. The State did not contest either conclusion. See
letter to Quality Control Review Panel dated February 13,
1992, at
2.
4. In Tennessee, as in this case, the SSN was
received in
advance of the review date and there was no
contention that the recipient
could not have reported the
SSN by the review
date.
5. In view of
this conclusion, we need not
determine whether the payment in question was
made based
on a provision of the State's title IV-A plan which was
inconsistent with federal law, as required by section
408(c)(2)(B)(ii).
(..continued)