DEPARTMENTAL APPEALS BOARD
Department of Health and Human Services
SUBJECT: Guam Department of Public DATE: May 11, 1989 Health and
Social Services Docket No. 89-7 Decision No. 1050 OCSE
Audit No. GU-84-PR
DECISION
The Guam Department of Public Health and Social Services
(Guam/Appellant) appealed a determination by the Office of the Child
Support Enforcement (OCSE/Agency) reducing payments in federal financial
participation (FFP) for Guam under Title IV-A of the Social Security
Act (Act) by $26,580 for the period January 1, 1988 through December 31,
1988. A follow-up review of an OCSE audit found that Guam's Child
Support Enforcement Program (Title IV-D program) was not in "substantial
compliance" with the requirements for enforcement of child support
obligations and use of the Parent Locator Service as required by Title
IV-D. Title IV-A of the Act provides for a percentage penalty, which
begins with a one percent reduction and increases by statutory mandate
to a possible maximum percentage penalty of five percent, until the
state is in substantial compliance with the Title IV-D program
requirements. The penalty at issue was one percent. See section
403(h)(1) of Title IV-A of the Act.
Based on our analysis below, we uphold the Agency's penalty in full.
Background
On February 24, 1987, OCSE notified Guam that, based on an audit
conducted by OCSE, Audit Report No. GU-84-PR, Guam was found not to have
complied substantially with the requirements of Title IV-D. In
addition, the February 24, 1987 Notification (Penalty Notice) indicated
that total payments to Guam under Title IV-A would be reduced by one
percent; however, the Agency also told Guam that imposition of the
penalty would be suspended if Guam submitted a corrective action plan to
the OCSE Regional Representative within 60 days of the date of the
Penalty Notice and the plan was approved by OCSE. Guam submitted a
"Corrective Action Plan" to the Agency on April 16, 1987. See Agency's
appeal file, Ex. B. On May 12, 1987, OCSE notified Guam that its
Corrective Action Plan had been approved and that imposition of the
penalty had been suspended. The corrective action period ended on
February 23, 1988, one year from the original Penalty Notice.
Based on a follow-up review, the Agency notified Guam that it failed to
achieve substantial compliance with two of the unmet criteria cited in
the Penalty Notice, as follows:
(1) 45 C.F.R. 305.26(a), (b), and (e) - Enforcement of Support
Obligations - In order to be found in substantial compliance,
the Territory's procedures to enforce support obligations must
be used in 75 percent of the cases reviewed. Guam did not meet
this standard because action had been taken in only 38 of 61
cases (62 percent) reviewed which required enforcement services.
(2) 45 C.F.R. 305.33(g) - State Parent Locator Service - In order to
be found in substantial compliance, the Territory must be using the
names and other identifying information of absent parents, the State
and local locate data sources, and the Federal Parent Locator Services,
in an attempt to determine the whereabouts of the absent parent, as
required by 45 C.F.R. 302.35, in 75 percent of the cases reviewed.
Guam did not meet this standard because action had been taken in only
17 of the 46 cases (37 percent) reviewed which required location
services.
Agency's letter, December 2,
1988.
Additionally, in its December 2, 1988 letter, the Agency notified Guam
that the penalty under Title IV-A of the Act would be assessed for each
quarter after the expiration of the suspension period (quarter beginning
January 1, 1988), and would continue until the quarter that Guam was in
substantial compliance with the two requirements, noted above, of the
Title IV-D program. The Agency also informed Guam that only one
corrective action period would be allowed.
Applicable Authority
Section 305.26 of 45 C.F.R. (1987) states, in part:
Enforcement of support obligation.
For the purposes of this part, in order to be found in
compliance with the State plan requirement to enforce support
obligations . . . , a State must:
(a) Have established and be utilizing written procedures for
identifying as delinquent those cases in which there is a failure to
comply with the support obligation;
(b) Have established and be utilizing written procedures for
contacting delinquent obligors for the purpose of collecting the
support obligation;
* * *
(e) Take appropriate action, using the procedures the State has
established, to enforce support obligations;
Section 305.33 of 45 C.F.R. (1987) states, in part:
For the purposes of this part, in order to be found in compliance
with the State plan requirement for a parent locator service . . . ,
a State must:
* * * (g) Be using the names and other
identifying information of absent parents, the
State and local locate data sources and the
Federal PLS, in an attempt to determine the
actual whereabouts of the absent parent, or
determine that the whereabouts of the absent
parent cannot be ascertained;
Section 305.20 of 45 C.F.R. (1987) provides that the procedures required
by the above criteria must be used in 75 percent of the cases reviewed
for each criterion.
Section 452 of Title IV-D of the Act [42 U.S.C. 652] provides, in part:
(a) The Secretary shall establish, within the Department of Health
and Human Services a separate organizational unit, under the
direction of a designee of the Secretary, who shall report directly
to the Secretary and who shall --
* * *
(5) assist States in establishing adequate reporting procedures and
maintain records of the operations of programs established pursuant
to this part in each State;
* * *
(7) provide technical assistance to the States to help them
establish effective systems for collecting child and spousal support
and establishing paternity.
Analysis
Guam did not contest the Agency's finding of substantial noncompliance,
nor the amount of the appropriate penalty. Instead, Guam argued that
the reason for its noncompliance was that the Agency failed to provide
it with adequate "on-site" technical assistance. Guam maintained that
the requirements of the Act, which provide that the Director of OCSE
must assist the states in establishing necessary and proper procedures
and provide "on-site" technical assistance, were not met in this case.
Guam argued that the rules and regulations promulgated by OCSE pursuant
to the mandates of Congress failed to provide adequately for the
necessary "on-site" technical assistance that the territory of Guam
required. Appellant's brief, pp. 2-3. Additionally, Guam contended
that the transfer of its Child Support Program from the Department of
Public Health and Social Services to the Department of Law was a
meaningful step by Guam toward resolving the two remaining problems with
the Guam Child Support Office. Appellant's reply brief, p. 3.
The Agency argued that Guam's position was without merit and provided no
support for a reversal of the penalty. The Agency noted that its
original notice of noncompliance, dated February 24, 1987, cited five
compliance issues, and that after a corrective action period of a year
(most of which was penalty free time), the Agency found that two of the
five initial compliance issues were still not corrected. Moreover, the
Agency asserted that --
the only "exception" to imposition of the penalty provided by Congress
relates to noncompliance items of a "technical nature" which do "not
adversely affect the performance of the child support enforcement
program." 42 U.S.C. 603(h)(3). The two items of Appellant's
substantial noncompliance for which the penalty has been imposed here,
inadequate enforcement of child support obligations and
underutilization of Appellant's Parent Locator Service, go to the heart
of the effective performance [of] its Child Support Enforcement
Program.
Agency's brief, p. 2.
We agree with the Agency's position, and find that Guam's arguments are
without merit. Contrary to Guam's major argument, section 452 of the
Act provides no support for the position that the Agency must provide
"on-site" technical assistance. Specifically, the statute provides
that
OCSE, as the Secretary's designee, shall provide technical assistance to
the states to help them establish effective systems for collecting child
and spousal support and establishing paternity. The statute does not
specify in what form the technical assistance will be provided. The
Agency stated that it "has opted not to go on-site for this purpose thus
far because of an extremely limited travel budget, the great distance
involved (7,000 miles) and the very small (relative to other Region IX
States) amount of money involved." Agency brief, p. 3. In addition,
the Agency noted that it "remains available to assist Appellant to the
fullest extent possible by correspondence and telephone and is willing
to work with Appellant to seek other creative ways, within budgetary
limits, to get additional assistance to Appellant." Agency brief, p. 3,
n. 3.
The Board has previously stated that if the Agency's exercise of its
authority is reasonable, the Board will not substitute its judgment for
the Agency that is designated to administer the program. See California
Dept. of Social Services, DAB No. 742 (1986), at p. 2. We find that the
Agency's position is a reasonable one. It is uncontested by Guam that
the Agency has provided assistance and allowed it an opportunity to
correct the noncompliance issues identified in the Agency's audit.
Guam, instead, centers only on the fact that the Agency's assistance has
not been "on-site," but it has not provided any evidence to show that
"on-site" technical assistance would have changed the situation here.
Guam has not even alleged what, if anything, the Agency could have
provided by having personnel physically present that could not have been
accomplished by written correspondence and telephone communication. In
fact, it appears that what Guam wants is a resident Agency
representative, which is, at the very least, economically infeasible.
Moreover, the Agency's treatment of Guam in this case has been fair and
equitable. As the Agency noted, although Guam's original Penalty Notice
contained five noncompliance issues, the Agency suspended the penalty
and allowed Guam a one year time period for corrective action.
Even if the Agency were required to provide "on-site" assistance,
which
it is not, Guam's position would still be seriously undercut by its own
admissions. In Guam's Corrective Action Plan, dated April 16, 1987, the
Director of the Department of Public Health and Social Services stated:
Our deficiencies in the past were due to lack of personnel because of
delays in recruitment for job openings and the lack of automation in
the affected areas. Presently, we cannot fill vacancies because of the
governor's austerity program. By executive order, all hirings have
been frozen except under certain condi-tions. . . .
Agency's appeal file, ex. B.
Guam maintained that because the Agency has elected not to make an
on-site visit to Guam this is proof that the Agency has paid "scant
attention to its own obligations to that program". Appellant's reply
brief, p. 3. However, Guam has failed to consider its own obligations
under the Title IV-D program. Surely, once it was clear that the Agency
would not provide "on-site" technical assistance, Guam could have
explored other ways to get the information that it needed, by mail or
telephone. We, therefore, find that Guam's position is conclusory and
is no basis for overturning the penalty.
Further, while Guam has alleged that the transfer of the Guam Child
Support Program from the Department of Public Health and Social Services
to the Department of Law is a meaningful step by Guam toward resolving
the two remaining problems with the Guam Child Support Office, this
action, alone, does not provide a basis for overturning this penalty.
It would appear that Guam is arguing that it should receive some
equitable benefit because of its attempt to improve its program. The
Board has in many decisions stated that we decide only the merits of the
dispute between parties. See, e.g., New Hampshire Division of Human
Resources, DAB No. 583 (1984), at p. 4; Tulsa Community Action Agency,
DAB No. 789 (1986), at p. 6. The Board has no authority to waive a
disallowance (or a penalty) because a state made improvements in its
program administration after the disallowance period. See, e.g., Ohio
Dept. of Mental Retardation and Developmental Disabilities, DAB No. 405
(1983), at p. 1. Therefore, Guam's action here, while it may serve to
prevent penalties in the future, provides no support for a reversal of
the penalty appealed to us.
Conclusion
Based on the foregoing, we uphold the penalty in full.
_______________________________ Donald
F. Garrett
_______________________________ Norval
D. (John) Settle
_______________________________
Alexander G. Teitz Presiding Board