Department of Health and Human Services
Departmental Appeals Board
AFDC QUALITY CONTROL REVIEW PANEL
Subject: New York State
Department of
Social Services
Docket No. 92-253
Decision No. QC52
Date: September 30, 1993
DECISION
The New York State Department of Social Services (NYSDSS)
appealed the
quality control (QC) review determinations
of the Regional Administrator of
the Administration for
Children and Families (ACF) in NYSDSS QC review
numbers
505151 and 605716. 1/ In case number 505151, ACF
found
that the assistance unit (AU) headed by R.H. was
ineligible for
the Aid to Families with Dependent
Children (AFDC) grant it
received. 2/ In case number
605716, ACF found that the AU
headed by G.W. had received
a larger overpayment than that identified by
NYSDSS.
Each of these AUs included, as an essential person, an
individual who had been receiving public assistance under
New York's
Home Relief program. 3/
Both NYSDSS and ACF agreed that errors were committed in
these cases when
NYSDSS failed to discover that the Home
Relief recipients had income or
resources in excess of
their needs. What is at issue here is the
proper measure
of those errors.
ACF contended that the errors in these cases were caused
by NYSDSS'
failure to count the income and resources of
the Home Relief recipients as
available to the AUs.
Thus, it is ACF's position that the measure of
the errors
is the difference between the amounts NYSDSS paid these
AUs
(including the Home Relief recipients as essential
persons) and what amount
the AUs would have been entitled
to receive had the income and resources of
the Home
Relief recipients been included when their AFDC grants
were
budgeted.
In contrast, NYSDSS contended that its errors occurred
when it designated
persons with excess income or
resources to be essential persons.
Therefore, NYSDSS
argued, the proper measure of its errors is the
difference between what it paid the AUs (including the
Home Relief
recipients as essential persons) and what
amount the AUs would have received
had the needs and
resources of the ineligible essential persons not been
included in calculating the amount of the AFDC grant.
ACF and NYSDSS agreed that eligibility for essential
person status is
governed by permissible state practice
(PSP). Under the relevant PSP,
individuals who are
ineligible for public assistance other than AFDC (such
as
Home Relief) do not qualify as essential persons.
However, ACF
argued that receipt of Home Relief, even if
erroneous, should be treated as
equivalent to eligibility
for essential person status.
We conclude that ACF's interpretation conflicts with New
York's State
plan and, therefore, cannot be regarded as
PSP. The Home Relief
recipients were not eligible for
public assistance other than AFDC and thus
were not
eligible to be designated as essential persons.
Accordingly, we agree with NYSDSS that the errors in
these cases should
be calculated by removing the needs
and resources of the ineligible
essential person from the
AUs. We reject the result sought by ACF,
because it
would increase the difference findings by, in effect,
preventing NYSDSS from accurately measuring the effects
of its
errors.
Background
I. Relevant Authority
Section 402(a)(7)(A) of the Social Security Act (Act)
requires that
states, in calculating need for AFDC
purposes:
take into consideration any other income and
resources of any child
or relative claiming [AFDC],
or of any other individual (living in the same
home
as such child and relative) whose needs the State
determines should
be considered in determining the
need of the child or relative claiming such
aid [.]
Federal regulations provide, at 45 C.F.R. �
233.20(a)(2)(vii), that a
state plan must:
if the State chooses to establish the need of the
individual on a
basis that recognizes, as essential
to his/her basic well-being, the
presence in the
home of other needy individuals, . . . specify the
persons whose needs will be included in the
individual's need . . .
.
Section 3577 of the QC Manual provides:
If the State chooses, in establishing the need of an
AU, to take
into account the presence in the home of
another needy, but categorically
ineligible
individual(s), PSP must specify the kinds of
individuals
whose needs will be included in
determining the AU's need, and provide that
the
decision as to whether any individual will be
recognized as
essential to the recipient's well-
being shall rest with the recipient.
Section 3131 of the QC Manual defines PSP to mean:
"written rules and
policies that are in accordance with
existing, approved State plan
provisions."
New York State Plan Amendment Transmittal No. 85-22
(effective September
17, 1989), provides:
The following kinds of individuals may be recognized
as "essential
persons:"
Persons, relative or non-relative, who:
1. reside in the same home as the recipient;
2. are eligible for public assistance other
than [AFDC] on
the basis of income and
resources;
3. persons who meet the above requirements are
presumed to be
essential persons unless the
head of household states otherwise.
NYSDSS Ex. 6.
II. Essential Person Litigation
Prior to January 1989, federal regulations gave states
discretion to
define who could be considered "essential
to [the] basic well-being" of an
AFDC recipient and thus
included in the composition of an AU for AFDC
purposes.
Such an individual is referred to as an "essential
person." NYSDSS policy regarding essential persons was
promulgated in State Plan Amendment Transmittal No. 85-
22. The
administrator of the Family Support
Administration (predecessor to ACF)
approved the State
plan amendment, subject to operational conditions, in a
decision dated July 29, 1988. 4/ ACF Ex. 7.
On January 24, 1989, the Department of Health and Human
Services (DHHS)
promulgated regulations, effective
October 1, 1989, which limited the
definition of an
essential person to someone performing one of five
specific services. 5/ See 45 C.F.R. �
233.20(a)(2)(vii). However, in 1990, two United States
District
Courts held that the regulation conflicted with
section 402(a)(7)(A) of the
Act. The courts held that
section 402(a)(7)(A) reserves to the states
the authority
to determine who is an essential person for AFDC
purposes. See McKenney v. Sullivan, 743 F. Supp. 53 (D.
Me.
1990)(the decision in the other case, Vance v.
Sullivan (E.D. Pa.) is
unreported).
In a separate court challenge, NYSDSS had appealed from
DHHS' denial of
federal financial participation (FFP) for
recipients of Home Relief (New
York's general assistance
program) who resided in the households of AFDC
recipients. NYSDSS contended that the Home Relief
recipients were
essential persons under its State plan.
In June 1991, DHHS entered
into a settlement with NYSDSS
to resolve the litigation. Pursuant to
the settlement,
DHHS agreed to make retroactive payments of FFP to NYSDSS
for essential persons in accordance with the State plan
provisions in
effect on September 30, 1989 (i.e. State
Plan Amendment Transmittal No.
85-22). See Stipulation
and Order of Settlement and Dismissal, NYSDSS
v.
Sullivan, No. 89 Civ. 7567 (S.D.N.Y. June 10, 1991)
(NYSDSS Ex.
5). In accordance with the settlement
agreement, NYSDSS opted to
request FFP for individuals
living in AFDC households to whom it had paid
Home Relief
during fiscal year 1991. NYSDSS was to be reimbursed for
the federal portion of the Home Relief payments it had
made. The
Home Relief payments were retroactively
treated as AFDC. In effect,
this resulted in the
retroactive reconfiguration of AFDC AUs to include the
Home Relief recipients as essential persons. See ACF Ex.
5, at
2.
III. QC Review of Cases No. 505151 and No. 605716
The cases at issue in this appeal both involve Home
Relief recipients
residing with AFDC AUs. The cases were
selected for State QC review
prior to implementation of
the settlement which permitted Home Relief
recipients to
be included in the AFDC AU. Thus, at the time of the
initial QC review, the Home Relief recipients were not
included in the
AU, and their eligibility for Home Relief
was not part of the QC review
process. Subsequent to the
settlement, NYSDSS identified these cases
as involving
conversion of a Home Relief recipient to AFDC essential
person status and as falling within the federal QC
subsample.
Pursuant to the settlement, NYSDSS and ACF
agreed that these cases, as well
as others in the federal
subsample involving the essential person issue,
would be
re-reviewed by NYSDSS in accordance with the policy set
forth
in a Memorandum of March 21, 1992 to the Regional
Administrator from the
Director of the Office of Family
Assistance. ACF Ex. 5.
For purposes of re-review, NYSDSS added the Home Relief
payments to the
AFDC payments originally made to the AFDC
AUs to arrive at a global
amount. That global amount was
treated as though it had been paid as
AFDC to the
reconfigured AU, including the Home Relief recipient as
an
essential person.
A. Case No. 505151
In case no. 505151, the original AU received an AFDC
payment of $598 in
the review month of January 1991. In
the review month, R.W., who
received a Home Relief
payment of $198, resided with the AU. As a
result of the
settlement, NYSDSS presumed that R.W. was an essential
person. Thus, at re-review, NYSDSS reviewed a total
payment of
$796 to the AU, including R.W.
In the course of its re-review, NYSDSS discovered that
R.W. owned an
insurance policy with a net cash surrender
value in excess of $1000.
Because of his excess
resources, R.W. had been ineligible for the Home
Relief
payment he had received. NYSDSS concluded that because
R.W.
was ineligible for Home Relief, he did not qualify
for essential person
status. Therefore, it removed him
from the AU. NYSDSS then
concluded that it had overpaid
the AU $198, the amount of R.W.'s Home Relief
payment.
ACF determined that R.W.'s excess resources were required
to be counted
against the AU. Thus, ACF concluded that
the AU was totally ineligible
for a payment of $796.
B. Case No. 605716
In the review month, July 1991, two Home Relief
recipients, I.C. and
D.C., resided with the AFDC AU
consisting of G.W. and her daughter.
NYSDSS presumed
that both I.C. and D.C. were essential persons and added
their Home Relief payments to the AFDC payment received
by G.W. for a
total payment of $957. In the QC review
conducted prior to the
settlement, NYSDSS had identified
a $153 overpayment to G.W. on account of
an error in
budgeting the AU's shelter allowance. That overpayment
is not at issue here.
On re-review, NYSDSS discovered that I.C. had received a
pension payment
in the review month which exceeded his
needs. For this reason, I.C.
had been ineligible for the
Home Relief payment he had received. As it
did in the
previous case, NYSDSS determined that I.C. should not
have
been treated as an essential person and it removed
him from the AU.
NYSDSS then budgeted the needs of a
three-person AU consisting of G.W., her
daughter, and
D.C. as an essential person. It calculated that this AU
would have been eligible for a payment of $641.
Therefore,
according to NYSDSS' calculations, G.W. was
overpaid $316 (the difference
between $957 and $641).
ACF determined that I.C. should not have been removed
from the AU.
Accordingly, it treated his excess income
as available to the AU. ACF
calculated the needs of the
four-person AU, including both D.C. and I.C. as
essential
persons, to be $804. Subtracting I.C.'s pension payment
of $240 from that figure, ACF arrived at $564 as the
amount to which the
AU was entitled in the review month.
ACF's calculation resulted in a
finding that G.W. was
overpaid $393 (the difference between $957 and
$564).
The Parties' Arguments
NYSDSS argued that eligibility for essential person
status is governed by
PSP. According to NYSDSS, the
relevant PSP is found in its State Plan
Amendment
Transmittal No. 85-22. The State plan provides that to
be treated as an essential person, an individual must be
eligible for
public assistance other than AFDC. New
York's Home Relief program is
an example of "public
assistance other than AFDC." However, because
the
individuals in these cases were not, in fact, eligible
for the Home
Relief payments they received, NYSDSS argued
that they were not properly
essential persons, and should
be removed from the AUs. 6/
In its Response of the Administration for Children and
Families to
Questions Raised by the Quality Control
Review Panel, dated August 20, 1993
(ACF Response), ACF
conceded that the definition of an essential person is
controlled by PSP. ACF also conceded that, in certain
circumstances, an essential person could be removed from
the AU in
accordance with PSP: "State imposed
nonfinancial substantive
eligibility requirements . . .
would permit extraction [of the essential
person's needs
and resources from the calculation of the AFDC grant]
during the QC process . . . ." ACF Response at 7. For
example, ACF stated that an essential person should be
removed from the
AU if QC review determined that the
essential person did not reside with the
AFDC recipient
or if the AFDC recipient had opposed inclusion of the
essential person in the AU. Id.
However, ACF contended that, under New York's PSP, the
receipt of Home
Relief payments in the review month, even
if erroneous, is the equivalent of
a finding that the
recipient was eligible for Home Relief. In support
of
this argument, ACF pointed to NYSDSS Administrative
Directive 91
ADM-29, which contains the following
definition of "essential person":
An essential person is an individual(s) who has
applied for and is
eligible for or is receiving
public assistance other than [AFDC], who is
living
in the same home as an [AFDC] dependent child(ren)
who is an
applicant/recipient, and whose presence is
essential to the [AFDC]
recipient's well-being.
NYSDSS Ex. 7, at Para. IV.B. (emphasis added). ACF
argued that,
because R.W. and I.C. had received Home
Relief payments in the review
months, they must be
regarded as eligible for Home Relief and, therefore,
for
essential person status. For this reason, ACF argued,
section
402(a)(7)(A) of the Act requires that the income
and resources of these
essential persons be counted
against the AUs in determining the correct
amount of
their AFDC grants.
Analysis
The dispute in this appeal arose because of the unique
circumstances
surrounding the settlement agreement
entered into in the case of NYSDSS v.
Sullivan and
implementation of that settlement. It is important to
note that, during the review months at issue in this
appeal, the Home
Relief recipients were not regarded as
essential persons and, accordingly,
were not part of the
AFDC AUs. On the contrary, they were receiving
Home
Relief precisely because they did not meet the federal
criteria for
essential person status, as promulgated in
the 1989 federal regulations.
As described above, the settlement agreement in essence
overruled the
1989 regulations, in that it permitted
NYSDSS retroactively to claim FFP for
Home Relief
payments made to needy individuals residing with AFDC
recipients, in accordance with State Plan Amendment
Transmittal
85-22. To implement the settlement, NYSDSS
and ACF agreed that NYSDSS
would submit a list of all
cases where Home Relief had been paid to an
individual or
individuals living in an AFDC household. The agreement
to claim and to pay FFP retroactively for Home Relief
recipients
effectively created a fiction that the Home
Relief recipients had been
designated as essential
persons and, accordingly, had received AFDC payments
equal to the amount of Home Relief they had been paid.
The cases at issue here were selected for the State QC
sample and the
federal QC subsample prior to
implementation of the settlement. Thus,
NYSDSS had
performed its QC review on the AFDC components of the
cases;
however, the Home Relief payments had not been
subject to QC review prior to
the settlement. As part of
the settlement, NYSDSS and ACF agreed that
cases in the
QC sample that had Home Relief involvement would undergo
a
second QC review to determine the correctness of the
total payments to the
retroactively-created AUs
consisting of the AFDC households and the Home
Relief
recipients.
Prior to this re-review, the only determinations that
NYSDSS had made
with regard to the R.W. and I.C. were the
caseworkers' original finding that
they were eligible for
Home Relief. 7/ NYSDSS admits that
those
determinations were erroneous. However, because R.W. and
I.C. were on the Home Relief rolls (albeit erroneously)
and because they
were residing in the homes of AFDC
recipients, NYSDSS included these cases
in the list it
provided to ACF identifying cases affected by the
settlement. At the time NYSDSS compiled the list, it did
not
undertake a review of each case to determine whether
the Home Relief
recipients were, in fact, eligible for
the payments they received.
NYSDSS merely searched its
records for all cases in which Home Relief
recipients
were residing in AFDC households.
During re-review, NYSDSS discovered that the Home Relief
recipients in
these cases had been ineligible for the
payments they received. NYSDSS
determined that their
ineligibility for Home Relief rendered the individuals
ineligible for essential person status. Based on this
determination, NYSDSS calculated the errors in these
cases as the
difference between the total amount of aid
paid to the AUs (the AFDC and
Home Relief payments
together) and the amount of AFDC the AUs were entitled
to
receive without the ineligible essential persons. In
summary,
NYSDSS' position is that the errors in these
cases were committed when
persons who were in fact
ineligible for Home Relief were wrongly determined
to be
eligible and were placed on the Home Relief rolls. The
correct treatment of those errors, according to NYSDSS,
is to remove the
ineligible essential persons from the
AUs and calculate the correct payments
to the properly-
configured AUs.
In its Response, ACF agreed that reconfiguration of the
AU would be
appropriate where the essential person did
not meet substantive eligibility
requirements for that
status, as defined by PSP. ACF and NYSDSS were
also in
agreement that the nonfinancial eligibility criteria for
essential person status are found in State Plan Amendment
Transmittal
85-22. Those criteria are: (1) the
individual must reside with
an AFDC recipient; (2) the
individual must be eligible for public assistance
other
than AFDC; and (3) the AFDC recipient must agree that the
individual is "essential." The sole question remaining
in this
appeal is whether, under New York's PSP, an
individual who wrongly received
Home Relief is
nevertheless an essential person whose needs and
resources must be included in determining the amount of
an AFDC grant to
the AU. Resolution of this question
turns on the interpretation of the
phrase "eligible for
public assistance other than [AFDC] on the basis of
income and resources."
NYSDSS argued that R.W. and I.C. were never properly
essential persons,
as defined by PSP. It is undisputed
that these individuals had
resources or income that
rendered them ineligible for Home Relief.
Thus,
according to NYSDSS, they could not have met the second
criterion
in the State plan because they were not
eligible for public assistance other
than AFDC on the
basis of income and resources. ACF's counterargument
was
that New York PSP treats receipt of Home Relief as
interchangeable
with the State plan requirement that an
essential person be eligible for
public assistance. ACF
cited the language of 91 ADM-29, quoted above,
in support
of this argument.
NYSDSS responded that ACF's interpretation of 91 ADM-29
is inconsistent
with the provisions of the State plan
amendment. That is, the State
plan amendment provides
that essential person status is contingent on
eligibility
for public assistance; therefore, any interpretation of
the
administrative directive that would require an
individual who is ineligible
for public assistance to be
treated as an essential person would conflict
with the
State plan. Thus, according to NYSDSS, even if ACF's
interpretation of 91 ADM-29 were correct, such an
interpretation could
not be regarded as PSP.
NYSDSS argued, however, that the language of 91 ADM-29
was consistent
with the State plan amendment. According
to NYSDSS, the phrase
"individual(s) who has applied for
and is eligible to receive or is
receiving public
assistance" is intended to address two factual
situations. In the first, an individual who "has applied
for and
is eligible to receive" public assistance, is
someone who has applied for,
but not yet received, public
assistance. In the alternative situation,
an individual
who is "receiving" public assistance, according to
NYSDSS,
is someone who is properly receiving public
assistance.
We do not find NYSDSS' interpretation of 91 ADM-29
convincing. The
plain language of the directive's
definition, which is phrased in the
alternative, states
that an essential person is someone who "is
receiving"
public assistance. The directive fails to state that
such receipt must be proper. However, while we conclude
that ACF's
interpretation of 91 ADM-29's language is
correct, we nevertheless agree
with NYSDSS that, under
that interpretation, the language of 91 ADM-29
conflicts
with the State plan. In our view, an individual who is
wrongly receiving public assistance cannot meet the State
plan
requirement that he or she be "eligible for public
assistance."
Therefore, we look to the provisions of the
State plan to define
PSP. 8/ Section 3131.B.3. of the
QC Manual provides that,
"When written rules and policies
are not consistent with the existing,
approved State plan
. . . , PSP means the provisions of the State
plan."
Because R.W. and I.C. were ineligible for Home Relief,
they
could not be essential persons under the State plan.
ACF argued that section 402(a)(7)(A) of the Act requires
that the income
and resources of an essential person be
counted as available to the AU in
determining the amount
of the AFDC grant. There is no doubt that the
statute
imposes such a requirement. ACF reasoned from this
premise
that disregarding the income and resources of the
Home Relief recipients in
these cases would violate the
statute. We disagree. Section
402(a)(7)(A) does not
define who is an essential person, 9/ nor
does it
mandate that the income or resources of persons who are
not
essential be counted as available to the AU. Because
R.W. and I.C.
were not essential persons, as defined by
PSP, removal of their needs and
resources from the AFDC
AUs was proper. Section 402(a)(7)(A) does not
require a
different result.
ACF argued that it was New York's PSP to presume that
Home Relief
recipients living in AFDC households were
essential persons. Once
NYSDSS made that presumption,
and thereby created an AU with an essential
person, it is
ACF's position that the composition of the AU cannot be
changed during the QC process. In support of this
argument, ACF
cites the Panel's decision in Wisconsin
Department of Health and Social
Services, DAB QC4 (1991).
The Wisconsin case involved an AU composed of a
grandmother, who was a
non-legally responsible caretaker
relative, and her grandson. The
grandmother was
otherwise eligible for AFDC, and thus was permitted, but
not required, to be included in the AU of her grandson.
In the
review month, the grandmother had income which
Wisconsin failed to budget,
resulting in an overpayment.
Wisconsin contended that PSP permitted a
relative in the
grandmother's position to include or exclude herself from
the AU. Therefore, Wisconsin argued, it should be
entitled, for QC
purposes, to measure its error by
calculating what an AU consisting of the
grandson alone
would have received. Removing the grandmother (and her
income) from the AU resulted in a smaller overpayment
than that found by
ACF. In that case we upheld ACF's
error determination, finding that
Wisconsin's PSP did not
provide a basis to remove the grandmother from the
AU.
The Wisconsin case does not support ACF's position in the
present cases
for two reasons. First, Wisconsin failed
to establish that its PSP
would have resulted in
reconfiguration of the AU. Here, on the other
hand, New
York's State plan amendment clearly defines who is
eligible to
be considered an essential person. Second,
the grandmother in
Wisconsin, as a caretaker relative,
was a proper member of the AU, although
she was not
required to be included. In contrast, the only basis for
R.W. and I.C. to be included in the AUs here was as
essential
persons. As we have discussed above, R.W. and
I.C. were not eligible
for essential person status under
New York's PSP. Therefore, there was
no basis to include
them in the AUs. Indeed, in our view, to have
included
them would have been error.
This last point is particularly significant. Under New
York's State
plan amendment, a person cannot be
"essential" unless he or she is eligible
for public
assistance. In the cases at issue in this appeal, two
persons who were ineligible for public assistance were
designated
essential persons. In so designating them,
NYSDSS committed
errors. NYSDSS acknowledged these
errors and sought to correct them by
recognizing that the
AUs in question should have been paid without
incorporating the needs or resources of these persons.
ACF, in
effect, argued that once designated essential, a
person could not be removed
from the AU. Were we to
adopt ACF's position, we would be requiring
NYSDSS to
perpetuate its errors. ACF has argued throughout that
the result sought by NYSDSS would undermine the QC
process.
10/ Ironically, ACF's position would result
in a QC process that
prevents NYSDSS from accurately
measuring the effects of its errors.
Conclusion
For the reasons stated, we overrule ACF's error
determinations. We
conclude that the errors in these
cases are to be measured by the difference
between what
the combined AFDC/Home Relief AUs were paid and the
amount
the AUs would have received had the ineligible
essential persons not been
included.
_____________________________
Leslie
Sussan
_____________________________
Maxine
Winerman
_____________________________
Leslie
Weyn
* * * Footnotes * * *
1. NYSDSS
filed a single appeal referencing
both
cases.
2.
Recipients and other individuals are
identified by their initials to protect
their privacy.
3. Home Relief is a State-funded cash public
assistance
program established under section 157 of the
New York Social Services
Law.
4.
The conditions were the following:
1. The New York State Department of Social Services is
to issue a
written directive to caseworkers
instructing them: (1) to explain the
concept of
"essential person" to recipients and (2) to ask
recipients
whether they consider as essential to
their well-being each individual
residing in their
home whose only possible basis for being included in
the grant is that he is an essential person; and
2. The New York State Department of Social Services is
to issue a
written interpretation of the term "head
of household" in its amendment to
mean "recipient".
ACF Ex. 7, at 1.
5. The specified services are: (1) child care
which
enables a caretaker relative to work on a full-time
basis outside the home,
(2) care for an incapacitated
family member in the home, (3) child care that
enables a
caretaker relative to receive training on a full-time
basis,
(4) child care that enables a caretaker relative
to attend high school (or
General Education Development
(GED) classes) on a full-time basis, (5) child
care for a
period not to exceed two months that enables a caretaker
relative to participate in Employment Search or another
AFDC work
program. 45 C.F.R. �
233.20(a)(2)(vii).
6. Additionally, in its appeal request and in
a
supplemental submission dated September 28, 1992,
NYSDSS argued that it had
not claimed federal financial
participation (FFP) on behalf of the home
relief
recipients in these two cases. On that basis, NYSDSS
contended that the cases should not be included in the QC
sample.
ACF argued that the Panel does not have
jurisdiction to consider whether
cases should be dropped
from the QC sample. We find it unnecessary to
reach this
question, however. In a telephone conference of March
17, 1993, NYSDSS, in effect, abandoned its argument that
the cases
should be dropped from the sample. See Letter
from Panel to Parties,
dated August 3, 1993.
7. ACF
argued that, by including the disputed
cases on a list of cases which NYSDSS
claimed were
eligible for FFP pursuant to the settlement, NYSDSS had
made an independent determination that the Home Relief
recipients had
been eligible for essential person status.
However, NYSDSS responded
that the list merely included
the universe of cases in which its records
indicated that
a Home Relief recipient was residing in the same
household as an AFDC recipient. For reasons discussed
more fully
below, we conclude that even if the creation
of the list constituted a
finding of eligibility by
NYSDSS, that finding would have been in
error.
8.
We note that 91 ADM-29 was issued in part
in an effort to respond to the
conditions imposed in
ACF's decision approving the State plan
amendment.
However, the conditions imposed by ACF's decision were
operational and did not relate to the definition of
essential
person. See n.3,
supra.
9.
Indeed, as noted above, the courts have
held that section 402(a)(7)(A)
reserves to the states the
power to define who is an essential person.
See McKenney
v. Sullivan, 743 F. Supp.
53.
10. We
note that, during prior QC reviews,
ACF's predecessor, the Family Support
Administration
(FSA), apparently took a different view than that argued
by ACF here. In a letter dated July 8, 1988, from Louis
Katz,
Program Manager, FSA, Region II, to Charles
Kavanaugh, Director of Quality
Control, NYSDSS (NYSDSS
Ex. 18), FSA found that an essential person who had
excess income should be removed from the AU.
(..continued)