Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Appellate Division
SUBJECT: District of
Columbia DATE: July 21,
1993
Department of Human Services Docket
No.
A-93-88 Decision No. 1426
DECISION
The District of Columbia Department of Human Services (DC) appealed
a
penalty imposed by the Office of Child Support Enforcement (OCSE)
on
November 30, 1992, pursuant to title IV-D of the Social Security
Act
(Act). An audit by OCSE of DC's operation of its child
support
enforcement and paternity establishment program for the period
January 1
through December 31, 1990, resulted in a finding that DC had failed
to
achieve substantial compliance with the requirements of title
IV-D,
specifically, that DC had failed to take action on at least 75% of
cases
requiring establishment of paternity. Since this was the
third
consecutive finding of failure to meet this requirement, the
penalty
imposed was a three percent reduction, $1,875,547, of the
amount
otherwise payable to DC under title IV-A of the Act. See
section
403(h)(1)(c) of the Act.
Based on the reasoning below, we sustain OCSE's imposition of
the
penalty.
Background
Every state that participates in the cooperative federal-state program
for
Aid to Families with Dependent Children (AFDC) pursuant to title
IV-A of the
Act is required to have a child support enforcement and
paternity
establishment program pursuant to title IV-D of the Act.
Section
402(a)(27). The IV-D program was created to provide child
support and
paternity establishment services for both AFDC and non-AFDC
families.
Regulations implementing title IV-D require states to submit
and follow a
plan for locating absent parents, establishing paternity
where necessary,
obtaining child and spousal support, and enforcing
child support obligations
of absent parents. 45 C.F.R. Part 302. DC is
a "state" for
purposes of Title IV of the Act. Section 1101(a)(1) of
the Act.
The Act requires OCSE to audit participating states at various
intervals to
determine whether each state is "complying substantially"
with program
requirements. For performance criteria such as the
establishment of
paternity criterion of 45 C.F.R. . 305.24(c), the
regulations define
substantial compliance as taking appropriate action
in 75% of cases requiring
such action. 45 C.F.R. . 305.20(d) and
(a)(2).
OCSE issued an action transmittal on May 5, 1988 (OCSE-AT-88-7)
which
provided details regarding the standard its auditors would use
in
evaluating cases for the establishment of paternity criterion
beginning
with audits conducted for FY 1988. In relevant part, the
action
transmittal provided that --
. . . the substantial compliance standard to be applied to
State
and local efforts to establish paternity will be based on
the
actual establishment of paternity and/or a support order
or
initiation of legal action to establish paternity and obtain
a
support order during the audit period in at least 75 percent
of
the cases reviewed requiring those services when, at
the
beginning of the audit period: (1) The absent parent has
been
located; and (2) Both the establishment of paternity and
a
support order are necessary. The standard does not apply
in
cases needing a support order if paternity has been established.
AT-88-7 (DC exhibit (ex.) B) at 1-2.
OCSE conducted an annual audit of DC's IV-D program which led to
the
penalty at issue here. See "Annual Comprehensive Audit District
of
Columbia," dated August 21, 1992 (att. to DC ex. C). The
auditors
selected a statistical sample of 402 cases from DC's listing of
IV-D
cases, and ultimately reviewed 262 of these to determine
whether
appropriate actions were taken to provide required services.
Id. at
8-9. 1/ The auditors determined that 46 of these cases
required
paternity services, but only 18 of those received such
services. Thus,
the efficiency rate for this criterion (i.e., the
extent to which
appropriate action was initiated on cases in accordance with
federal
requirements) was only 39%; the auditors estimated with
99.99%
confidence that DC did not meet the 75% case processing standard
for
this criterion. Id. at 10-11. 2/ Following DC's appeal of the
penalty,
the auditors again reviewed the 46 cases and determined that one
case
was erroneously included because establishment of paternity services
was
not required. The auditors' recalculations after excluding this
one
case resulted in an efficiency rate of 40% with a confidence level
of
99.99%.
DC did not challenge the auditors' statistical sampling methodology
or
their calculations. Instead, DC argued that 11 of the 46 reviewed
cases
did not meet the guidelines in AT-88-7 as cases requiring
paternity
services because the files for those cases did not contain a
confirmed
address for the absent parent. DC maintained that all 11
cases should
have been reviewed instead as cases requiring location
services. OCSE
responded that 10 of the 11 cases were correctly
included. 3/ OCSE also
asserted that, in any event, elimination from
the sample of all cases DC
challenged would result in a efficiency rate of
51.43% with a 99.5%
level of confidence that DC did not meet the 75%
substantial compliance
standard. OCSE response br. at addendum 1, .
28. DC replied that "a
high level of confidence based upon an
inappropriately selected sample
is a contradiction in terms that cannot be
fair or accurate,
irrespective of whether the District in this case achieves
substantial
compliance with the establishment of paternity phase for
appropriate
cases." DC reply at 4.
Analysis
Even if DC has a legitimate complaint, at least in some cases, about
the
OCSE auditors' position that any address is sufficient to trigger
the
need for establishment of paternity services, 4/ the fact remains
that,
even if all challenged cases are excluded, DC's performance for
this
criterion still falls far short of the 75% required by the
regulations.
DC specifically stated in its reply brief that "[t]hese
calculations
[showing an efficiency rate of 40%] have been reviewed by the
District's
statistician and are not now challenged." DC reply at
4. Consequently,
DC's disagreement with OCSE's conclusion that DC
failed to meet the 75%
standard appears to be based, as much as we can
understand it, on an
assertion that the audit was fatally flawed by the
auditors' incorrect
(according to DC) inclusion of 11 cases in the sample as
cases requiring
establishment of paternity services.
Statistical sampling, if done in accordance with the general rules
and
conventions statisticians have developed, can provide sound evidence
of
whether a state is in compliance with the title IV-D standards.
Ohio
Dept. of Human Services, DAB No. 1202 (1990), reconsideration
denied
(February 25, 1991), aff'd sub nom. Ohio v. Sullivan, 789 F. Supp.
1395
(S.D. Ohio 1992). DC did not provide any support whatsoever for
its
contention that the OCSE audit was rendered so unreliable by
inclusion
of the challenged cases that their exclusion would not cure
the
allegedly defective results. DC has not alleged, for example, that
the
sample of 35 cases (the number of cases left after exclusion of
all
challenged cases) is not a random sample which is representative of
the
universe of cases in the State's program for this criterion and thus
may
not provide a valid basis for statistical projections. Compare
Oklahoma
Dept. of Human Services, DAB No. 1223 (1991). Neither has DC
argued
that OCSE's statistical calculations are incorrect, as it did in
a
previous appeal before us. See District of Columbia Dept. of
Human
Services, DAB No. 1228 (1991). Although DC is apparently
asserting that
the inclusion of cases that allegedly should have not been
included
somehow renders the entire audit process suspect, DC's own
statistician
reviewed all of OCSE's calculations without finding anything
to
challenge about them or the sample on which they were
based.
Consequently, since DC does not offer any support for its
contention
that the OCSE audit is unreliable, we cannot credit it.
Accordingly, we find that DC's disagreement with OCSE about whether
the
challenged cases should be included or excluded does not undermine
the
validity of OCSE's conclusion that, even excluding questioned cases
from
the sample, a statistically valid analysis demonstrates with
99.95%
confidence that DC failed to provide services in 75% of the
cases
requiring establishment of paternity services. We therefore
conclude
that OCSE has provided ample evidence to support imposition of
the
penalty in this case. See Mississippi Dept. of Public Welfare, DAB
No.
1267 (1991); New Mexico Human Services Dept., DAB No. 1224 (1991);
Ohio.
Conclusion
We uphold OCSE's November 30, 1992 imposition of a three percent
penalty
disallowance.
___________________________
Judith
A.
Ballard
___________________________
Donald
F.
Garrett
___________________________
M.
Terry Johnson
Presiding
Board
Member
1. The auditors excluded from review 82 cases
because services were
not required or could not be provided; 31 cases because
case records
were not provided for review; 7 cases because they were closed
prior to
the audit period; 19 cases where legal action had been initiated
prior
to the audit period but paternity was not established during the
audit
period (since an action had already been initiated); and 1 case where
an
address was not available at the beginning of the audit period
and
paternity was not established nor were legal actions initiated.
Id.
2. DC also failed to meet the 75% standard for the
location of
absent parents criterion, but since it had passed the previous
year, it
was permitted to propose a corrective action plan. OCSE
accepted DC's
corrective action plan and will audit for compliance at the
close of the
corrective action plan period. If DC continues to be out
of compliance,
an additional one percent penalty will be imposed. See
DC ex. A.
3. Upon review, OCSE determined that one file
contained evidence
that a valid marriage existed at the time the subject
children were
born, so that establishment of paternity services were not
needed.
4. Some of the files provided by DC as exhibits
showed addresses for
absent parents that were obtained several years before
the audit period.
See, e.g., OCSE Declaration ex. VII (address provided was
address where
absent parent lived with client before he moved out in
1982). While DC
claimed that it should not be obliged to bring a
paternity action in a
case where it considered the absent parent's address to
be suspect, DC
did not produce any official policy or state plan provision
that
required a reliably verified address. Moreover, several of the
cases
had fairly recent addresses. See OCSE Declaration ex. IV
(address
supplied in March 1989).
5. The auditors excluded from review 82 cases because
services were
not required or could not be provided; 31 cases because case
records
were not provided for review; 7 cases because they were closed prior
to
the audit period; 19 cases where legal action had been initiated
prior
to the audit period but paternity was not established during the
audit
period (since an action had already been initiated); and 1 case where
an
address was not available at the beginning of the audit period
and
paternity was not established nor were legal actions initiated.
Id.
6. DC also failed to meet the 75% standard for the
location of
absent parents criterion, but since it had passed the previous
year, it
was permitted to propose a corrective action plan. OCSE
accepted DC's
corrective action plan and will audit for compliance at the
close of the
corrective action plan period. If DC continues to be out
of compliance,
an additional one percent penalty will be imposed. See
DC ex. A.
7. Upon review, OCSE determined that one file
contained evidence
that a valid marriage existed at the time the subject
children were
born, so that establishment of paternity services were not
needed.
8. Some of the files provided by DC as exhibits
showed addresses for
absent parents that were obtained several years before
the audit period.
See, e.g., OCSE Declaration ex. VII (address provided was
address where
absent parent lived with client before he moved out in
1982). While DC
claimed that it should not be obliged to bring a
paternity action in a
case where it considered the absent parent's address to
be suspect, DC
did not produce any official policy or state plan provision
that
required a reliably verified address. Moreover, several of the
cases
had fairly recent addresses. See OCSE Declaration ex. IV
(address
supplied in March