Department of Health and Human Services
Departmental Appeals Board
AFDC QUALITY CONTROL REVIEW PANEL
SUBJECT: Missouri Department
of Social Services
Docket No. A-93-013
Decision No. QC36
DATE: January 28, 1993
DECISION
The Missouri Department of Social Services (Missouri)
appealed an October
6, 1992 quality control (QC) review
determination by the Regional
Administrator, Region VII,
of the Administration for Children and Families
(ACF).
ACF determined that the Missouri QC review had erred in
including in its review sample of Aid to Families with
Dependent
Children (AFDC) grants the case of D.G. 1/
The Missouri QC
review found that D.G. had received a
correct AFDC grant in the amount of
$292 in the review
month. The federal QC review determined that D.G.'s
case
should have been dropped because sufficient information
could not
be obtained from D.G.'s bank to determine the
amount of resources D.G. had
available as of the review
date.
For the reasons discussed below, we sustain ACF's
determination that the
case of D.G. should have been
dropped from the sample of cases reviewed by
the Missouri
QC review.
Factual Background
During the review month of October 1991, the Assistance
Unit (AU) of D.G.
and her family had a checking account
at Boatmen's First National Bank
(Boatmen's). As of
October 1, 1991, the AU's checking account had a
balance
of $126.45. The Missouri QC review submitted
verification
of the account balance on October 1, 1991,
but did not provide any other
evidence of banking
activity by the AU during the review month.
The federal QC review contacted Boatmen's on June 8,
1992, seeking
additional information about the AU's
account. Boatmen's responded
that a purchase voucher was
required to send the requested
information. The federal
QC review mailed a purchase voucher to
Boatmen's on
approximately June 22, 1992, and when Boatmen's failed to
respond, a federal reviewer telephoned the bank on
approximately July 8,
1992. Boatmen's stated that
neither the original correspondence nor
the purchase
voucher could be located. On July 28, 1992, the federal
reviewer resubmitted copies of the June 8, 1992 letter
and the purchase
voucher to Boatmen's.
When the federal QC review received no response from
Boatmen's, ACF
determined, based on sections of the AFDC
Quality Control Manual (QCM), that
D.G.'s case should be
dropped because of the lack of verification of any
information concerning activity in the AU's account at
Boatmen's during
the review month. 2/
Applicable Law
Title IV-A of the Social Security Act (Act) provides for
payments to
needy families with dependent children.
Section 406(b) of the Act
defines "aid to families with
dependent children" as money payments with
respect to a
dependent child including money payments to meet the
needs
of the relative with whom any dependent child is
living. Section
402(a)(7) of the Act requires states to
consider income and resources in
determining need for
assistance.
Section 408 of the Act established the AFDC QC system to
improve the
accuracy of payments and provided for Panel
review of difference cases,
defined as those cases which
the state's review determines to be correct but
for which
the federal review finds erroneous payments. Section
408(b)(3). Recently published regulations define a
"difference" as
a disagreement between state and federal
review findings that affect the
state's official AFDC
payment error rate, including a federal finding that a
sample case should be dropped from the QC review. 45
C.F.R. �
205.42(i) (final rule, 57 Fed. Reg. 46,804,
October 13, 1992).
Relevant QCM Provisions
Each state is required to operate its AFDC quality
control system in
accordance with policies and procedures
prescribed in the QCM issued by the
Department of Health
and Human Services. 45 C.F.R. � 205.40(b)(1).
As relevant to this appeal, the QCM states, at Section
3200:
Occasionally, a reviewer will find that he/she
cannot complete a
case review because of
circumstances which make it impossible to obtain
enough information to render an eligibility and/or
payment
determination. If a review is not
completed, the case must be dropped
from the sample.
Section 3200 continues:
After the reviewer has verified as many elements as
possible,
he/she completes or drops the case
according to the following criteria:
* * *
2. If evidence to verify all elements cannot be
obtained, and
no ineligibility error has been
identified, the case must be dropped.
A
finding of correctly paid, overpaid or
underpaid cannot be made unless
all elements
can be verified because the effect of
unverified elements
on the sample month's
payment is unknown.
The requirements for verifying one element (Element 211)
"Bank Accounts
or Cash on Hand, " are set forth at
section 3544 of the QCM. In
relevant portion, section
3544 instructs a reviewer to:
Obtain enough
information to make a determination as to
whether any member of the AU had
available to him/her, as
of the review month, resources from a financial
instrument.
* * *
Bank contact(s) must cover the period of time
necessary to
determine eligibility and payment . . .
Absent a PSP, the amount of
resources available for
a month is determined by (a) obtaining the bank
balance as of the first day of the month and adding
to it any deposits
made to the account during that
month that represent a resource or, (b)
adding all
deposits in a month to the amount of resources
carried-over
from the previous month, subtracting
from this, all deposits that represent
part or all
of the recipient's assistance check paid for this
month as
well as any other income....
* * *
If a bank account is reported by the recipient or
discovered by the
reviewer, the type of account,
account number, type of ownership, banking
activity,
as needed and balance for the review month and
previous
months, as required, must also be
documented.
Be alert to deposits to bank accounts as an
indication of the
receipt of income, including
interest on the account! . . . Document
deposits
made during the review period in order to determine
whether
such deposits should have affected
eligibility.
Analysis
ACF argued that the provisions of section 3544 clearly
required the
Missouri QC review to obtain information
regarding banking activity
throughout the review period,
not just the first day of the review
month. Thus, as
Missouri failed to document the activity in D.G.'s
account, an element of D.G.'s eligibility could not be
verified and
D.G.'s case must be dropped from the sample
in accord with the provisions of
section 3200 of the QCM.
Missouri responded that the provisions of section 3544
cited by ACF were
not applicable to its QC review.
Missouri maintained that the
provisions of section 3544
applied only to states with a retrospective
budgeting
system and "absent a PSP" on resources. Missouri
contended that it has a prospective budgeting system and
a PSP -- a
permissible state practice -- and that this
PSP was followed in this
case.
In Missouri Dept. of Social Services, DAB QC35 (1993),
these same issues
were raised. The Panel there noted
that several provisions in section
3544 require the QC
review to document deposits made during the review
period
and that section 3544 is explicit in requiring that bank
contacts
"must cover the period of time necessary to
determine eligibility and
payment." The Panel examined
Missouri's PSP and found that the PSP, while
including
procedures for verification, did not specify the period
of
time that bank account information must cover, and did
not provide that a
review is satisfied by merely
obtaining a bank account balance on the first
day of the
review month. The Panel concluded that, in the absence
of more specific guidance from the PSP on the questions
raised in that
appeal, Missouri was bound by the more
specific instructions in section
3544.
The Panel also examined whether Missouri's prospective
budgeting system
relieved Missouri of the requirements
imposed by section 3544.
Referring to sections 3410 and
3420 of the QCM, the Panel found that in
matters of
prospective budgeting the QCM contemplates that
eligibility
and payment determinations are to be based on
income and resources during
the entire review month.
The Panel in Missouri concluded:
[T]he specific requirements of section 3544 of the
QCM and the
nature of the prospective budgeting
process require bank account information
beyond the
beginning month balance that the State supplied
here.
As the State did not obtain the information
required to review the
determination of eligibility,
the case must be dropped from the QC
review.
At 4-5.
We reaffirm that conclusion here. ACF's interpretation
of section
3544 is reasonable. Reliance on an account
balance on only the first
day of a review period could
lead to a distorted picture of an AU's
financial
condition. Requiring a QC review to monitor banking
activity throughout the review period should produce more
accurate
assessments of the AU's eligibility and
payments.
Conclusion
For the reasons discussed above, we conclude that ACF
correctly
determined that the case of D.G. should have
been dropped from the sample by
the Missouri QC review.
__________________________
Carmen
Cafasso
___________________________
Maxine
M. Winerman
___________________________
Thomas
D. Horvath
* * * Footnotes * * *
1. In order to protect her
privacy, this AFDC
recipient is identified by her initials. The
Missouri QC
review number is 050466.
2. In its initial difference letter of August 28,
1992,
ACF asserted that a provision in section 3544 of
the QCM requires that bank
account information be
acquired not only for the review month, but also for
the
two preceding months. Missouri responded that this
requirement
applies only to states with retrospective
budgeting that use financial
information from months
preceding the payment month to calculate the amount
of
the AFDC grant. Missouri contended, and ACF did not
dispute,
that Missouri employed prospective budgeting and
therefore did not consider
information from preceding
months to determine eligibility and the amount of
AFDC
assistance. In its reply to Missouri's appeal request,
ACF
did not pursue its argument that this specific
requirement applied to
Missouri, and we do not consider
it any further here.
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