GAB Decision 223
October 29, 1981 New Mexico Human Services Department (formerly Health
and Social Services Department); Docket No. 80-86-NM-HD Settle, Norval
The State of New Mexico Human Services Department (State) appealed
the April 25, 1980 decision of the Acting Assistant Secretary for Human
Development Services for the Office of Human Development Services
(Agency) that upheld a revised disallowance of $51,525 in claims for
Federal financial participation (FFP) under Title XX of the Social
Security Act for Child day care services. The Regional Program
Director, Region VI, Public Services Administation, issued the original
disallowance on July 14, 1977. The State here appeals two parts of the
Assistant Secretary's decision involving $46,407 in FFP. For reasons
discussed below, I sustain the disallowance.
At the State's request, this case is considered pursuant to the
provisions of 45 CFR 201.14, as amended March 6, 1978 (43 FR 9265), with
the Board Chair substituted for the Administrator, Social and
Rehabilitation Service (SRS). Although the State has a right to a
conference under those procedures, it did not request one. Further, I
have determined that there are no material facts in dispute, and that a
conference or hearing would not assist the development of the issues.
The record on which this decision is based consists of the
reconsideration record developed pursuant to 45 CFR 201.14(d), the
State's appeal, the Agency's response, and information submitted by both
parties during a telephone conference conducted by a Board member.
I. Certified Tribal Expenditure
The first issue concerns the State's claim for $8,972 in FFP (based
on $11,962 in expenditures) for what the State alleges was a Mescalero
tribal expenditure properly matchable under Title XX. The Agency in its
reconsideration decision found that the amount in question -- (2) was
not a payment to the Tribe and should not have been reported as an
expenditure. Since these claimed expenditures were not reported
properly by the State, they were included in the original deferral/
disallowance action.
In its appeal to this Board, the State indicated that the Agency's
finding was based on unclear language in a letter from the State to the
Agency dated April 15, 1977. The State argued that while this amount
had originally been recorded by the State as a payment to the Tribe, it
in fact represented certified expenditures reported by the Tribe for
services to children. The State reasserts its claim for FFP on this
basis.
The Agency in its reply brief argued that the FFP claimed would
nevertheless be unallowable because no children were eligible for the
period during which the expenditures were made, April 1, 1976 through
September 30, 1976. In a telephone conference with a Board member, the
Agency cited regulatory authority supporting that position, including 45
CFR 228.60, which provides that FFP is available in expenditures for
services to an individual provided that the individual was "eligible"
under Sections 228.60 and 228.61 at the time of the receipt of the
service. During the same telephone conference, attorneys for the Agency
and the State entered into the following stipulation concerning the
eligiblity of children for whom FFP was claimed:
The records of neither party contain information which permits the
identification of the certified (expenditures) at issue ($11,962/$8,972
FFP) with the period in which eligible children were receiving services
and therefore (the expenditures) must be disallowed.
Based on the regulatory requirement that FFP is only available for
expenditures for services to eligible individuals and the absence of
evidence to demonstrate that the expenditures at issue were for servies
to eligible individuals, this part of the Agency's disallowance is
sustained.
II. Claimed Payment under Pub.L. 95-291
The second issue in the State's appeal stems from a disallowance of
$37,435 in FFP under Title XX. The State, however, does not deny that
this amount is not allowable under Title XX. Rather, the State argues
that it effectively claimed $37,435 in FFP under Title IV-A and as a
consequence is entitled to a payment of $5,615.25 under Pub.L. 95-291.
The services from which the (3) claim arises were performed for the
periods July 1, 1974 through June 30, 1975 and July 1, 1975 through
September 30, 1975.
The primary issue is whether the State ever made a timely claim for
FFP under Title IV-A in accordance with Pub.L. 95-291.
Pub.L. 95-291 provides for partial reimbursement to the States for
social services rendered prior to the beginning of Title XX programs on
October 1, 1975. Under section 2 of the law, a Title IV-A claim
asserted on or after April 1, 1977 but prior to September 11, 1978 is to
be paid at 15 cents on the dollar within specified limitations. Section
2 refers to a claim as one "that the Secretary determines was asserted
against the United States, in the form and manner prescribed by the
Secretary with respect to the filing of claims under titles I, IV-A, VI,
VI, X, XIV, and XVI of the Social Security Act. . . ."
The State argues that while it never asserted or filed a IV-A calim
explicitly labeled as such for the periods in question, it in effect
asserted a IV-A claim for the $37,435 as of the last half of April,
1977. According to the State, this constructive claim occurred in a
letter it sent HEW dated April 15, 1977 that indicated that the State
would be claiming federal payment for social services provided prior to
October 1, 1975. The State further argues that the essential data for a
IV-A claim had already been provided to HEW through quarterly statements
of expenditures for Title XX. The format and manner of submission of
such quarterly statements, according to the State, was essentially
identical for IV-A claims and Title XX claims. For this reason, the
State asserts that it had satisfied the essential aspects of the
requirement of Pub.L. 95-291 for the assertion of a claim in the form
and manner prescribed for the filing of claims under the various titles
of the Social Security Act.
The State adds that to hold otherwise would elevate form over
substance. It submits that the Agency already knew about the claimed
FFP amounts by virtue of the deferral/disallowance issued in 1977 and
revised on May 8, 1978 and that any requirement that a specific form be
used labeled "Title IV-A" would not have altered the claim as known
by
the parties. To illustrate the reasonableness of its position, it cites
a 1929 tax case which held that a taxpayer's written statement would be
sufficient to assert a claim against the IRS (rather than the formal
legally phrased document) since the statement included sufficient facts
to fully advise the tax collector of the claim. Stein v. United States,
31 F.2d 960 (W. D. Wash. 1929).
(4) The Agency makes the following points in its response: (1) There
are no funds available to award payment of a IV-A Pub. L. 95-291 claim;
(2) the Board lacks jurisdiction to consider a IV-A payment as the
Agency has not disallowed a IV-A claim; (3) the State was advised in
writing by the Agency to submit its IV-A claim on a form separate from
Title XX claims; (4) the State had knowledge of how to file a proper
IV-A Pub. L. 95-291 claim as $28,500 was previously paid the State under
this authority; (5) the State's claim was not made in the form and
manner prescribed by the Secretary as required by Pub. L. 95-291.
I uphold the Agency on this issue since a Title IV-A claim was not
made by the State in the form and manner prescribed by the Secretary as
required by Pub. L. 95-291. While it is true that the Agency has never
formally disallowed a claim under Title IV-A, the Agency has effectively
considered issues surrounding the validity of the claim for purposes of
a payment under Pub.L. 95-291 in the April 25, 1980 reconsideration
decision. Accordingly, this decision will also consider the substantive
arguments concerning the validity of the claim.
Regulations concerning the filing of claims under public assistance
programs were in effect at the time of the State's alleged IV-A claim
and remained in effect for the duration of the period allowed for filing
a IV-A claim under Pub.L. 95-291. These regulations required that the
State agency submit "a quarterly statement of expenditures for each of
the public assistance programs under the (Social Security) Act." (45 CFR
201.5(a); emphasis supplied.)
The State argues that it met "essential aspects" of the requirements
of Pub.L. 95-291 for its Title IV-A claim by providing Title XX
quarterly statements of expenditures which contained essential data for
the IV-A claim and by referring to social services provided prior to
October 1, 1975 in a letter dated April 15, 1977. The State, however,
was reminded of its separate reporting responsibilities specifically for
the expenditures in question in a letter from the Agency dated April 28,
1977. That letter was in response to the April 15th letter that the
State cites as the basis for its claim. A subsequent memorandum
prepared by the Regional Program Director, Public Services
Administration, dated March 3, 1978, also cites the need for separate
reports and indicates that the appropriate State agency had agreed to
prepare separate IV-A and XX expenditure reports. The State was
reminded to submit documentation relating to IV-A expenditures "directly
to Washington for consideration in the retroactive claims." The Agency
notes that when the State's claim was (5) never submitted as a separate
IV-A claim, it failed to come to the attention of the official in the
Public Services Administration delegated the authority to validate and
pay claims made under Pub.L. 95-291. Further, the record demonstrates
that the State knew how to file a proper IV-A claim under Pub.L. 95-291
since it submitted a separate claim for other IV-A expenditures incurred
by it within the time frame prescribed by the law.
It is also significant that Pub.L. 95-291 authorized only funds". .
.not to exceed $543,000,000 to remain available until expended . . . ."
The Agency states that $543,000,000 has already been expended and argues
that no funds would be available under the statute to make a payment at
this time. There is no reason to disagree with this position and,
indeed, the limitation "until expended" provides additional evidence
of
the necessity for a separate, timely, filing.
Conclusion
The Agency's disallowance of $46,407 in disputed FFP claimed under
Title XX is upheld. $37,435 of this amount, if properly claimed under
Title IV-A, would have entitled the State to a payment of $5,615.25
under Pub.L. 95-291.
OCTOBER 22, 1983