Department of Health and Human Services
Departmental Appeals Board
AFDC QUALITY CONTROL REVIEW PANEL
SUBJECT: Tennessee Department of
Social Services
Docket Nos. 91-148
91-149
92-73
Date:
DECISION ON RECONSIDERATION
On March 5, 1992, the Tennessee Department of Human
Services (State) asked us to reconsider 1/ our February
18, 1992 decision in Docket Nos. 91-148, 91-149, and 92-
26. 2/ In that decision, we affirmed determinations by
the Acting Regional Administrator of the Administration
for Children and Families (ACF or Agency) that the
assistance units (AU) in these three cases were not
eligible for the grants they received during their review
month. These determinations were based on federal
quality control (QC) findings that children in these AUs
were not properly enumerated. After careful
consideration of all of the State's arguments 3/ we
reaffirm our conclusion that the AUs in these three cases
were not eligible.
Relevant Statutory and Regulatory Provisions
Section 402(a)(25) of the Social Security Act (Act)
requires that a State's title IV-A plan "provide that
information is requested and exchanged for purposes of
income and eligibility verification in accordance with a
State system which meets the requirements of section 1137
of this Act." Section 1137 in turn provides that, as a
condition of eligibility for title IV-A payments, a State
shall require that "each applicant for or recipient of
benefits . . . furnish to the State his social security
account number . . . ." Section 1137(a)(1). This
information is to be utilized primarily to obtain other
income information from various state and federal
agencies to verify the applicant's eligibility and the
amount of benefits to which the applicant is entitled.
See section 1137(b). Section 408(c)(4) of the Act (42
U.S.C. § 608(c)(4)), 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)."
Regulations implementing the requirement for a social
security number (referred to by the Agency as the
"enumeration requirement") appear at 45 C.F.R. § 205.52,
which 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.
The Department of Health and Human Services (Department)
has issued a Quality Control Manual (QCM) which details
the procedures for quality control review. The portion of
the QCM dealing with enumeration (Element 170) is found
at Appendix W of the QCM. Appendix W was issued by the
Agency to implement the 1989 amendments to the AFDC
statute. However, the portion of Appendix W dealing with
enumeration is substantially the same as that appearing
in the QCM provisions which were replaced by Appendix W.
The type of verification required for enumeration
purposes is set forth in the QCM, and depends on the
method a state adopts to help applicants secure a SSN.
The QCM provides that states may assist applicants in
meeting the enumeration requirement in the following
ways: 1) the State may have an agreement with the Social
Security Administration (SSA) through which the local
agency accepts applications for SSNs (termed "agreement
States"); or 2) the local agency may refer AFDC
applicants or recipients (applicants) to the SSA District
Office (DO) to make direct application to SSA (termed
"non-agreement States"); and 3) the State may provide
applicants with the Enumeration at Birth (EAB) option.
4/
The February 18, 1992 Decision
The three cases on appeal in this decision each involved
different factual situations. However, each raised
similar questions as to the proper enumeration of a
child. In Docket No. 91-148, the applicant applied
directly to the SSA for a SSN for her child. 5/ The
applicant did not, however, present verification of that
application, nor did she furnish the SSN upon receipt.
6/ In Docket No. 91-149, the applicant also applied
directly to the SSA for a SSN for her child and the
required verification of application was in the local
agency case record. However, although received prior to
the review date, the SSN was not furnished to the local
agency until some time after the review date. In Docket
No. 92-26, the applicant applied for her child's SSN
through the EAB procedure. Verification of this
application, however, was not in the local agency case
record as of the review date. Utilizing the verification
requirements of the QCM, each of these three cases
constituted QC errors, as applicants in each case either
had not furnished proof of application for a SSN as of
the review date, or had not reported the SSN upon receipt
as of the review date. State QC review determined,
however, that in each case the applicant actually had
applied for or received the SSN as of the review date
and, thus, was in conformance with the enumeration
requirement. ACF disagreed, and we upheld ACF's
determination.
In our decision, we found that the regulations at 45
C.F.R. § 205.52(a) expressly required as a condition of
AFDC eligibility that an applicant "furnish" a SSN to the
local agency or "submit verification" that application
for a SSN had been made (where a SSN has not yet been
issued or is not known). Thus, we held that it was not
sufficient that an applicant actually had or had applied
for a SSN; an applicant who had a SSN had to furnish it
and an applicant who had applied for a SSN had to submit
verification of that fact. We also disagreed with the
State's contention that the payments in these three cases
were issued in compliance with the regulations due to the
fact that in each case the State QC reviewer obtained
either the SSN or proof of application for a SSN after
the review date. We found that since a SSN is used as a
means of verifying an AU's income in order to determine
eligibility and benefits, if the applicant has not
furnished the SSN (where received) the SSN does not serve
any purpose with regard to the AFDC program. We
therefore held that although 45 C.F.R. § 205.52(a) did
not specifically state when the SSN must be furnished or
verification of application for a SSN submitted, the only
reasonable interpretation of this provision is that these
actions be taken by the review date.
Decision on Reconsideration
We reaffirm our decision to uphold ACF's error
determination in these three cases. In essence, the
State argues that the Panel wrongly concluded that the
only reasonable interpretation of section 205.52(a) is
that the SSN (or proof of application for a SSN where the
SSN has not been received) must be furnished as of the
review date. Even if this is not the only reasonable
interpretation, however, it is clearly one reasonable
interpretation. Furthermore, it is clearly ACF's
interpretation of the regulation, via the QCM and action
transmittals discussed below, that application for a SSN
be verified and the SSN furnished, if received, as of the
review date. As the State itself recognized, an agency's
interpretation of its own regulations is entitled to
deference, unless it is plainly erroneous or inconsistent
with the plain meaning of the regulations. March 5,
1992, State Reconsideration Request, pages 1 - 3;
Mullins Coal Co. v. Director, O.W.C.P., 484 U.S. 135, 159
(1987); Bowles v. Seminole Rock & Sand Co., 325 U.S. 410,
414 (1945). Further, as discussed below, we reject the
State's argument that the Agency's interpretation of the
regulations is inconsistent with the plain meaning of
section 205.52(c). Accordingly, we conclude that the
Agency's interpretation is entitled to deference.
In the initial proceeding in these cases, the State
argued that the Agency's interpretation was not binding
on it because it was not promulgated pursuant to notice
and comment rulemaking in accordance with 5 U.S.C. § 553.
We conclude that this argument has no merit. 7/ The
requirement for notice and comment rulemaking applies
only to substantive rules. Under section 553(a)(1),
official agency interpretations of general applicability
not published in the Federal Register are binding on the
persons to whom they pertain where actual and timely
notice has been given. In our view, the requirement that
the SSN (or proof of application for a SSN where the SSN
has not been issued) be furnished by the review date is
clearly an interpretative rule, not a substantive rule,
since it merely clarifies the meaning of the statutory
and regulatory requirement that an AFDC client "furnish"
his or her SSN (or the SSN of a dependent child). See
Gibson Wine Co. v. Snyder, 194 F.2d 329, 331 (D.C. Cir.
1952); United States v. Picciotto, 875 F.2d 345, 347
(D.C. Cir. 1989). There is no dispute that the State had
actual and timely notice of the requirement at issue via
the QCM and other Agency submissions. 8/ Accordingly,
ACF's interpretation was binding here.
The State also argued, however, that ACF's interpretation
was, in effect, inconsistent with 45 C.F.R. § 205.52(c)
because that section precludes a state from denying
assistance to an applicant who has applied for a SSN
prior to the review date, but not furnished the SSN
(although it was received) to the local agency by the
review date. We disagree. Section 205.52(c) precludes a
State from denying assistance "pending issuance" of the
SSN and pending "verification" of the SSN by the State.
Contrary to the State's suggestion, however, this
provision does not on its face address the situation
where a SSN has been issued but not reported. Instead,
the regulation simply provides that a state cannot deny
assistance between the time an AFDC applicant furnishes
proof of application for a SSN and the time the SSN is
issued (pending issuance), and between the time that the
AFDC applicant reports the SSN and the time the local
agency verifies the accuracy of the SSN (pending
verification). The State provided no evidence to support
its reading of this regulation. Accordingly, we conclude
that the Agency's interpretation of section 205.52(a) is
entitled to deference, since it is not inconsistent with
the plain meaning of the regulation as a whole.
The State's request for reconsideration also raised a
number of additional arguments, which, as discussed
briefly below, we do not find persuasive.
1. We reject the State's argument that since these are
non-earning children, the stated purpose of the
enumeration requirement, verification of income, is not
served by our decision. Congress did not provide for
separate enumeration requirements for infants. As long
as there is some valid purpose served by the requirement,
that the purpose does not apply specifically in a
particular case does not render the requirement invalid.
The State did not deny that the SSN could be used to
verify income for other than infants. Furthermore, it is
possible that some unearned income, other than that
reflected in payments to a parent's SSN, might be paid on
an infant's unreported SSN.
2. We reject the State's argument that reversal of our
decision is warranted because we did not decide whether
the QCM was binding on the State via its incorporation by
reference within 45 C.F.R. § 205.40(b). Whether or not
45 C.F.R. § 205.40(b) incorporates the entire QCM by
reference, or only specific portions of the QCM unrelated
to enumeration, is irrelevant to the issue in these
cases. Since the requirement of the QCM on which ACF
relied here constitutes an interpretative rather than a
substantive rule, it is not required to be published as a
regulation.
3. We reject the State's argument that reversal of our
decision is warranted because it violates the substantive
due process provisions of the Fifth Amendment to the
United States Constitution. The State argues
specifically that in cases where an applicant has applied
directly for a SSN, provided proof of application, but
not reported the SSN prior to the review month, the
State's being assessed an error is a violation of due
process. As the State noted, however, in order to
constitute a deprivation of substantive due process, the
Agency's assessment of an error under these circumstances
would have to be "egregiously unacceptable, outrageous,
or conscience shocking." Amsden v. Moran, 904 F.2d 748,
754 (1st Cir. 1990). As stated above, the enumeration
verification requirements are merely permissible,
reasonable interpretations of the regulations, necessary
to facilitate the purpose of enumeration, the use of an
applicant's SSN to verify income. In view of this
conclusion, we need not reach the question whether we
have the authority to reverse an Agency decision on
constitutional grounds.
4. We reject the State's arguments that our decision
imposes a strict liability standard on the states, as the
State cannot enforce how or when an applicant applies for
or furnishes a SSN. The State can enforce eligibility
requirements by denying eligibility where an applicant
either fails to apply for or furnish a SSN. As we stated
in our February 18, 1992 decision, the State is in the
best position to enforce these QC requirements. This is
because, through the EW at the local agency, the State is
in the best position to deal directly with applicants to
inform them as to the proper procedures for enumeration,
and to follow up to ensure that they comply with the
requirement for verifying application for a SSN and that
they furnish the SSN upon receipt.
5. We reject the State's argument that having to
complete two actions, both applying for and then
supplying a SSN before assistance is provided, trammels
upon an applicant's rights to have aid furnished with
reasonable promptness. Assistance is available as soon
as the AU member submits proof of application for a SSN
and should continue as long as the AU member provides the
SSN upon receipt.
6. We reject the State's argument that verification of
the SSN obtained during State QC home visits should be
considered in the case record for federal QC purposes, as
section 3030 of the QCM defines the case record as all
information available to the local agency for use in
making eligibility and payment determinations. While
section 3030 of the QCM defines the case record as all
information available to the local agency, it does not
indicate that information which becomes available after
the review date is a part of the case record. The
Panel's decision in North Carolina Department of Human
Resources, Docket No. 91-88 (August 9, 1991) does not
require a contrary conclusion. In that decision the
Panel held that a SSN was timely reported for AFDC QC
enumeration purposes when the applicant reported the SSN
to the local agency's Food Stamp program prior to the
review date. The local agency in North Carolina
administered both the AFDC and Food Stamp programs.
Because the information in the Food Stamp program file
was available to the local agency for use in making AFDC
eligibility and payment determinations, the Panel
concluded that the enumeration requirement was satisfied.
In these Tennessee cases, however, there is no
indication that the actual SSNs were furnished to any
program administered by the local agency prior to the
review date. 9/
7. We reject the State's argument that Congress defined
erroneous payments at section 408(c)(4)(B) of the Act
based upon the legal status of AU members as of the
review date, i.e. whether each member either had or had
applied for a SSN. The object of the enumeration
requirement is to obtain information to verify the AU's
income in order to determine eligibility and benefits.
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" - - and
an exception - - "unless an application for a social
security account number . . . has been filed within 30
days . . . " - - 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 an
applicant has a SSN but has not reported it. Moreover,
there is no indication that Congress intended to preclude
the Agency from requiring proof that an applicant without
a SSN had timely applied for one in order to qualify for
the exception. Furthermore, the State's reading of
section 408(c)(4)(B) undermines the purpose of the
enumeration requirement. Following the State's argument
to its logical conclusion (and recognizing that the State
has acknowledged that a SSN must be furnished (April 30,
1992 State Reply, page 4)), once an applicant has
verified the filing of an application for a SSN, unless a
QC error exists where an AFDC applicant fails to furnish
his or her SSN within a reasonable time after receipt,
the applicant might never report the SSN to the local
agency.
8. We reject the State's argument that, pursuant to 45
C.F.R. § 205.52(a)(2), proof of application need not be
furnished where the EAB procedure is used, because EAB is
a procedure adopted by the State and the SSA. The State
suggested that this regulation does not require
verification of an application for a SSN where
application is made through such procedure, but only
where an AFDC applicant applies directly to the SSA
District Office for a SSN. However, application by EAB
is direct application to the SSA. The local agency does
not process the EAB application. Thus, as in a non-
agreement State, applicants utilizing the EAB procedure
have to verify application for a SSN and furnish their
SSN to the State upon receipt. Absent verification of
application for the SSN via EAB, there is no way for the
local agency to know whether an applicant has applied for
a SSN. Furthermore, as the SSA does not provide copies
to the local agency of SSNs issued utilizing the EAB
procedure, the local agency will not receive a copy of an
applicant's SSN unless the applicant furnishes it.
9. We reject the State's argument that the QCM
requirement that an applicant furnish his or her SSN if
received by the review date is unreasonable because the
State cannot know in advance when a case will be reviewed
and, thus, by what time the SSN should be furnished. The
State itself recognizes that the regulations require that
a SSN must be furnished within a reasonable time after
receipt. April 30, 1992 State Reply Brief, page 6. The
State did not argue in any of the cases before us that
the SSN was not received by the AFDC applicant in
sufficient time for the applicant to report the SSN to
the local agency by the review date. Accordingly, we do
not have to reach the question in these cases as to
whether there is an erroneous payment where the SSN was
received prior to the review date but could not
reasonably have been reported by that date.
10. We reject the State's argument that, in keeping with
the QC process in the Medicaid and Food Stamp programs,
enumeration errors should be determined to be technical
errors not counted against the State for QC purposes.
Congress specifically determined that, unlike in the
Medicaid or Food Stamp programs, enumeration errors would
not be counted as technical errors, but, instead, would
be counted as part of a state's error rate. H. R. Conf.
Rep. No. 101-386, 101st Cong., lst Sess. 928 - 931
(1989).
Conclusion
For the reasons discussed above, we conclude that our
decision upholding ACF's determination of an erroneous
payment in these cases was not based on a clear error of
fact or law. Accordingly, we reaffirm our decision.
Carolyn Reines-Graubard
Leslie Sussan
Maxine Winerman
* * * Footnotes * * *
1. Upon a request for reconsideration, the
Quality Control Review Panel's Interim Guidelines provide
that the Panel may reconsider its decision where a party
alleges a clear error of fact or law in a submission.
2. Following our February 18, 1992 decision,
the State appealed two other decisions of the Acting
Regional Administrator of the Administration for Children
and Families which dealt with the same issues as those
decided in Docket Nos. 91-148, 91-149 and 92-26. These
two appeals, docketed as Docket Nos. 92-85 (appealed on
February 2, 1992) and 92-151 (appealed on May 18, 1992)
have been stayed pending resolution of this
reconsideration request.
3. We have also considered the arguments made
for reconsideration of our decision in an April 10, 1992
amicus curiae brief submitted by Russell J. Overby, Esq.,
Legal Services of Middle Tennessee, Inc., on behalf of
his client Allethea Pillow, and on behalf of the
plaintiff class in Newsome v. Grunow, Civil Action No.
7136 (M.D. Tn.) We do not directly address Mr. Overby's
arguments in this reconsideration, as they are
substantially similar to the arguments made by the State
in both its initial briefing of these cases and in its
briefing in this proceeding.
4. A detailed description of the requirements
for verification of enumeration for QC purposes under
each of these methods is contained in our February 18,
1992 decision in these cases.
5. Although Tennessee is an agreement state,
none of the applicants in these three cases applied for
their child's SSN through agreement state procedures.
6. We apparently overlooked the State's
allegation in the prior proceeding that the eligibility
worker's (EW) notation in the case record that she saw a
social security receipt was sufficient to constitute
verification. We nevertheless considered this matter in
our decision, finding that this notation did not
constitute verification. Specifically, the EW only
acknowledged that she "received requested verification -
- SS and birth certificate." February 18, 1992 Decision,
page 4. As we stated in our decision, it is not clear
what type of enumeration verification this might refer
to. In any event, the case record is otherwise devoid of
the required enumeration verification.
7. We did not reach this issue in our original
decision because we found that the requirement that the
SSN be reported as of the review date was implicit in the
regulations. We discuss it here to show that, even if
this requirement is an interpretation which goes beyond
the regulations, it is binding on the State.
8. Other than the QCM, Agency issuances which
delineated the Agency's enumeration verification
requirements were: AFDC Quality Control Memorandum No.
27 (11/15/84); FSA-AT-88-11 (5/12/88); FSA-IM-88-15
(11/28/88); FSA-AT-89-31 (7/20/89); AFDC Quality Control
Memorandum No. 51 (8/14/91). By telephone on July 7,
1992, the State admitted receiving these Agency
issuances.
9. The State also read the Panel's statement in
North Carolina that "the Agency did not point to any
authority for finding a payment erroneous on the ground
that the applicant's income was not verified," as
supporting its position that an AFDC applicant's failure
to verify application for or receipt of a SSN does not
result in an erroneous payment. However, it is clear
that the Panel was referring here to the Agency's
verification of the applicant's income using the SSN
which had been reported.
(..continued)