GAB Decision 183
May 29, 1981 Connecticut Department of Social Services; Docket No.
75-56-CT-SS Settle, Norval
I. Procedural Background
This decision is the final step in the reconsideration process
provided in Section 201.14 of Title 45 of the Code of Federal
Regulations, implementing Section 1116(d) of the Social Security Act
(Act), with the Chair of the Department Grant Appeals Board substituted
for the Administrator, Social and Rehabilitation Service (SRS) pursuant
to the transfer of functions of March 6, 1978 (45 FR 9266-7).
The Connecticut Department of Social Services (State), proceeded with
the Section 201.14 procedures, as modified, rather than electing review
under 45 CFR Part 16, for purposes of reconsideration of a decision
issued June 7, 1978, by the Acting Commissioner of Social Security,
disallowing Federal financial participation (FFP) of $146,736 claimed
under the public assistance titles of the Act for the activities of
district office clerical personnel.
The disallowance is based on findings in Audit Report No. 60254-01,
that the State allocated unallowable food stamp administrative costs to
the public assistance programs on the basis of the ratio of
participating public assistance households to participating non-public
assistance households. The Audit Agency concluded in its report that
this allocation was contrary to Sections 4810 and 4820 of the Handbook
of Public Assistance Administration (HPA), and recommended the
disallowance of FFP in the amount of $589,722. On September 22, 1976,
the Regional Commissioner, SRS, disallowed the State's claim for
$589,722; the State requested a reconsideration on October 15, 1976.
Thereafter, the State, on April 26, 1977, formally removed $422,986 of
the costs from the request for reconsideration. On June 7, 1978, the
Acting Commissioner of Social Security affirmed the disallowance
decision with respect to the remaining $146,736.
On June 29, 1978, the State sought further review of this
determination and requested a conference with the Board Chair. In
submissions dated August 24, 1978 and September 14, 1978, the State and
the Social Security (2) Administration (Agency), respectively, briefed
the issue of the applicability of P.L. 95-291, which authorized
reimbursement of certain expenditures by states prior to October 1975
for social services under various titles of the Act. Both parties
concluded that it was not applicable to this case.
In a telephone conference on November 17, 1980, the parties agreed
that the Agency would review evidence which the State would submit to
support its claim for $146,736. Agency representatives met with State
officials on December 10, 1980 and on January 21, 1981 to review the
additional documentation and discuss the particular duties of the
district office clerical staff. These discussions did not result in an
agreement between the parties.
Under the transfer of functions, the State was entitled to a
conference with the Board Chair, and, after appropriate notice and the
filing of preconference briefs, a conference was held on April 6, 1981.
In a telephone conference on April 20, 1981 the parties agreed that the
transcript (Tr.) of the conference contained no major prejudicial
errors. The Agency and the State filed post-conference briefs on April
13, 1981 and April 24, 1981, respectively.
This decision is based on the Reconsideration Record (SRS No. MA-CT
7601), the parties' submissions to the Board, the telephone conferences,
and the April 6 conference with the Chair.
II. Relevant Provisions
Handbook of Public Assistance Administration (HPA), Part v, Sec.
4810;
Federal Financial Participation
For the purpose of this section, the term "public assistance
recipients" means applicants for or recipients of assistance under the
federally aided State public assistance programs, including medical
assistance for the aged.
A. Federal financial participation is available for matching State
and local welfare agency expenditures for the initial certification and
recertification of households as eligible (1) to obtain coupon
allotments under the food stamp program or (2) to receive foods under
the direct distribution program of the Agriculture Marketing Service,
when one or more members of the household are public assistance
recipients. (emphasis added.)
B. Federal financial participation is not available for matching
State or local welfare agency expenditures for (3) the certification of
households in which no members are public assistance recipients.
C. Federal financial participation is not available for matching the
State and local welfare agency expenditures for costs incident to the
acceptance, storage, protection, issuance of, and accountability for,
food coupons; nor for the costs of storage, packaging, and distribution
of foods under the surplus food program.
31 USC 628 (1970):
Except as otherwise provided by law, sums appropriated for the
various branches of expenditure in the public service shall be applied
solely to the objects for which they are respectively made, and no
others.
III. The Issue
It is not disputed that FFP is avialable for the costs of the
activities of an eligibility worker incident to the initial
certification and recertification of public assistance households as
eligible to receive food stamps. The issue is whether any of the
activities of the State's district office clerical personnel were part
of the certification/recertification process within the meaning of HPA
Sec. 4810.
IV. The Arguments
The Agency's position is that only the activities of the eligibility
worker are part of the certification process eligible for FFP. In
Connecticut, the eligibility worker interviews applicants to determine
eligibility for public assistance and eligibility of public assistance
households for food stamps. With respect to the food stamp process, the
eligibility worker fills in two forms which provide personal and
financial information about the recipient, and compute the number of
coupons for which a recipient is eligible and the amount to be paid for
them. The eligibility worker also has the applicant sign a food stamp
indentification card. See Tr., pp. 17, 23.
The Agency explains that certification for food stamps is normally
part of the public assistance eligibility determination process, and
that when an applicant has been found to be eligible for public
assistance, such individual normally also has satisfied the criteria for
food stamp certification. Agency Memorandum in Support of Disallowance,
dated March 27, 1981, pp. 3, 9 (hereafter Agency Memorandum). The
Agency argues that to interpret HPA Sec. 4810 to include any activities
performed by persons other (4) than the eligibility employee would
violate the requirement under 31 USC 628 that funds be used only for the
purpose appropriated. The Agency maintains that when the eligibility
worker makes a determination of eligibility for both programs at the
same time, as part of a single process, any costs incurred to certify
eligibility for food stamps are so minimal and interwoven with the
eligibility worker's duties as to make them incidental to certification.
The Agency argues that in such cases it would cost more to make a proper
allocation than to ignore the program source of those amounts. Agency
Post-conference Memorandum, pp. 3-4. The Agency further argues that
costs generated by workers in a food stamp unit at times other than when
eligibility is decided are not part of the inseparable process, and
accordingly, the justification for paying costs of determining a public
assistance recipient's eligibility can not be extended to include the
additional administrative costs of food stamp clericals who fill out and
check food stamp forms and maintain various filing and informational
systems in the food assistance programs. Agency Post-conference
Memorandum, p. 5.
The State claims that FFP is clearly authorized under Sec. 4810-A for
costs of the district office clerical personnel because they were
engaged in certification functions. The State maintains that
certification involves more than the activities of the eligibility
worker. The State asserts that since Sec. 4810-C specifically sets
forth the costs which are to be excluded from FFP, and that section does
not place limitations on the certification and recertification process,
it is reasonable to interpret Sec. 4810-A to include the necessary
clerical activities incident to certification/ recertification. State
Post-conference Brief, p. 4.
The State rejects the Agency's claim that 31 USC 628 prohibits FFP in
this case, arguing that uder a proper interpretation of Sec. 4810, FFP
is authorized for the costs of clerical workers involved in the
certification of public assistance applicants and recipients.The State
maintains that the Agency's argument is based on the faulty premise that
the State is seeking FFP for costs beyond what is provided by Sec.
4810. State Post-conference brief, p. 5. The State claims that the
following are some of the necessary components of certification and
recertification performed by the district office clerical personnel:
The clerical workers, after receiving two completed forms (1302 and
1303) from the eligibility worker, would prepare another form called
W470; prepare a file; check through Form 1303 to insure that it was
properly filled out; convert the public assistance case number to
six-digit food stamp number. The clerical worker would also type in the
case number and the recipient's name on the identification card (which
the eligibility worker had previously had the recipient sign in blank);
prepare the initial ATP card (all subsequent ATP cards were issued from
the Department's central office); and mail the identification card and
the initial (5) ATP card to the recipient; (To recieve food stamps,
recipients must present an ATP which states the number of coupons they
can receive and the amount to be paid for them); enter the recipient's
name, along with information taken from the 1303 form, on a transmittal
sheet to inform the central office of the certification and provide the
necessary information for that unit to enter it in the electronic data
processing system. In connection with the recertification process, the
clerical workers sent out a notice near the end of a certification
period to each public assistance recipient advising her to report for an
interview to the eligibility worker; the clerical worker would first
obtain this information from a master journal. In cases where the
recipient failed to respond to the aforesaid notice, the clerical worker
would prepare and send out a notice advising that discontinuance from
the food stamp program would occur on a specified date. In cases where
a food stamp recipient had failed to "cash" an ATP card for three
successive months, the clerical worker would send out a notice of
pending discontinuance.
State Post-conference Brief, p. 10, see also Tr., pp. 26-39.
V. Discussion
As discussed below, this decision holds that FFP is available for the
costs of the district office clerical workers to the extent that the
ministerial support functions they perform are integrally tied to the
process undertaken by the eligibility worker in the certification of
households as eligible to receive food stamps. As the Agency correctly
asserts, FFP is not available for clerical costs involved in the
operation and maintenance of the USDA food stamp program, such as
providing information for central office data processing, issuing the
ATP card and keeping track of whether ATP cards have been cashed, /1/
(6) but the Agency did not distinguish those activites from the eligible
clerical support functions which are incident to the
certification/recertification process for which FFP is provided under
Sec. 4810. /2/
The language of Sec. 4810-A does not place the limitations of FFP
which the Agency seeks to impose, nor does the list of types of costs
for which there can be no FFP at Sec. 4810-C indicate that such a strict
interpretation is required of Sec. 4810-A. It is not logical, for
example, to interpret certification to include the eligibility worker
filling out a form but not the clerical worker checking whether that
form was filled out correctly; or to include the eligibility worker's
function of obtaining a recipient's signature on an I.D. card, but not
the clerical function of typing the recipient's name onto the card.
The Agency's position that certification under Sec. 4810 is limited
to the activities of the eligibility worker is based on the fact that
such an an interpretation results in minimal or insignificant costs for
certification/recertification, and that any broader interpreation would
violate 31 USC 628. As support, the Agency argues that since the food
assistance statutes do not authorize USDA to match the costs of
certifying public assistance households, this implies recognition "that
certification could be accomplished without additional cost in the
determination of public assistance eligibility." Agency Post-conference
Memorandum, p. 4.
This analysis of the issue is not persuasive. Section 4810 provides
that FFP is available for costs incident to certification and
recertification. The argument that a provision authorizing FFP for
costs (7) incident to an activity was written because the Agency did not
anticipate that there would be any costs generated by such activity is
inconsistent on its face. In addition, it does not necessarily follow
that the lack of USDA funding for the costs of certifying public
assistance households implies that additional costs would not be
generated in that process. One may as easily speculate that USDA does
not fund this activity because the activity is considered a service
under the public assistance programs, the costs of which should be paid
from public assistance funds. This interpretation would not be
inconsistenet with the Agency's position with respect to Sec. 4810. The
Agency states that Sec. 4810 was authorized by the "Appropriation"
sections of Titles I, IV, X, XIV of the Social Security Act and does not
violate the prohibitions of 31 USC 628. If certification is an activity
fundable under the public assistance titles consistent with Sec. 628, it
is not reasonable to conclude that Sec. 628 is violated by interpreting
certification to include necessary clerical support activities which are
integrally tied to the eligibility workers' activities. This approach
is consistent with decisions of the Comptroller General interpreting the
applicablity of 31 USC Sec. 628, albeit in other contexts, which have
held that funds appropriated for a particular purpose are also available
for other expenses necessary to execute that purpose. See e.g.,
Comptroller General Decision Nos. B-194881, December 27, 1979;
B-92288, February 19, 1976; B-188710, September 23, 1977; and
B-194031, May 1, 1979.
V. Conclusion
For the reasons stated above, this disallowance is upheld in the
amount of FFP claimed for clerical activities not incident to the
certification or recertification of households as eligible to receive
food stamps, but reversed with respect to those necessary support
clerical activities integrally tied to the eligibility worker's
activities. This case is remanded for the Agency to determine the
amount of the disallowance in a manner consistent with this decision.
/1/ The State argues that although issuing the initial ATP card
can be said to be prohibited under Sec. 4810-C as a cost incident to the
acceptance, storage, protection, issuance of, and accountability for,
food coupons, this initial ATP card issuance is so much a part of the
overall initial certification process as to be reasonably included
within the purview of Sec. 4810-A. The State quotes for support from
the Board's decision in California Department of Benefit Payments,
Decision No. 160, March 31, 1981, that "Given the incongruities of the
State's handbook provision, the Board finds that on balance, the
Agency's interpretation that the handbook provision applies only
situations where ATPs are prepared coincidently with issuance of the
certification is more reasonable." Id., p. 13. The State has taken this
quote out of context. In California, the Board upheld "the disallowance
of costs related to the issuance of ATPs based on a finding that they
were not certification costs for which FFP is available." Id., p. 12.
The Board stated further, "Rather than being a part of the determination
of eligibility, the ATPs are issued to eligible recipients to show the
face value of the coupon allotment the recipient is entitled to receive
on presentation of the document and the amount to be paid for such
allotment." Id., p. 12. /2/ The State argues that the Agency has
not defined the terms "certification" and "recertification,"
that the
terms were adopted from the United States Department of Agriculture
(USDA) food stamp regulations governing the certification of non-public
assistance households, and that, therefore, the USDA regulations should
be applied to determine which activities are part of the certification
process. See 7 CFR Parts 270-274, 35 FR 19737 and 36 FR 14102, and R.
pp. 16-17. Those regulations provide useful information and guidance but
to the extent that they define certification as including activities
which serve the USDA program and go beyond a determination of
eligibility and the necessary clerical support, there is no
justification for providing FFP from public assistance programs for such
costs. The State has not shown that the legislative history of the
public assistance titles, or the background of Sec. 4810, supports the
State's claim that this Department intended to adopt the USDA definition
of certification simply because it used the same term to describe the
process. While the terms may be the same, the underlying funding
purposes are not identical. HHS can only fund certification costs to
the extent that certification activities provide a benefit to the public
assistance programs from which the funds are appropriated.
OCTOBER 22, 1983