GAB Decision 440
Docket No. 83-39
June 16, 1983
Illinois Department of Public Aid;
Ford, Cecilia; Settle, Norval Garrett, Donald
The Illinois Department of Public Aid (State) appealed the decision
of the Office of Child Support Enforcement (Agency), disallowing $5,094
in federal financial participation (FFP) that the State had claimed
under Title IV-D of the Social Security Act. The Agency said that the
claim was filed later than the two-year time limit provided in federal
statute and regulations. The State maintained that its claim was timely
filed on the quarterly expenditure report for the last quarter within
the two-year limit.
As explained below, we do not accept the State's interpretation of
the two-year limit on filing claims for FFP. This decision does not
preclude the State from requesting a waiver of the deadline under the
regulations which allow a waiver for good cause. See also, Board's
decision in Arizona Department of Economic Security, Decision No. 386,
January 31, 1983.
I. Background.
The State submitted a quarterly report of expenditures for costs
incurred under Title IV-D, for the period ended September 30, 1982 which
included certain retroactive adjustments for costs of unemployment
benefits paid to former employees during the two-year period from July
1, 1980 to June 30, 1982. The State said that it mailed the report on
October 29, 1982. /1/ The Agency disallowed the costs for the earliest
quarter -- from July 1, 1980 to September 1980 -- based on the two-year
statutory limitation and the implementing regulation set out below. It
is not disputed that all the costs would have been considered claimed in
a timely manner if the State had submitted its expenditure report by
September 30, 1982.
(2) II. The basis for the disallowance.
The Agency relied on 45 CFR Part 95, Subpart A (1981) which allows
FFP:
only if the State files a claim with (the Agency) for the expenditure
within 2 years after the calendar quarter in which the State agency made
the expenditure. Section 95.7.
Section 95.7 is based on section 1132(a) of the Social Security Act,
which provides:
Notwithstanding any other provision of this Act... any claim by a
State for payment with respect to an expenditure made during any
calendar quarter by the State (under Title IV) shall be filed (in such
form an manner as the Secretary shall by regulations prescribe) within
the two-year period which begins on the first day of the calendar
quarter immediately following such calendar quarter; and payment shall
not be made under this Act on account of any such expenditure if claim
therefor is not made within such two-year period.... (emphasis added)
III. The parties' arguments.
The State acknowledged the two-year limit, but maintained that it had
claimed the disallowed costs in a timely manner. The State argued that
including the costs in the quarterly report constituted filing a claim
for those costs. The State reasoned that since the claims for the
quarter ended September 30, 1980 were included in the expenditure report
for the period ended September 30, 1982, the State had fulfilled the
statutory and regulatory requirement of filing the claim within two
years. The State maintained that "claims" were defined by regulations
as requests for FFP in the manner and format required by regulations (45
CFR 95.4); and that the regulations requiring expenditure reports
allowed the State to forward the report 30 days after the end of the
quarter. 45 CFR 304.25(b) (1981).
The Agency rejected this interpretation of the statute and
regulations, arguing that to be allowable, it was not enough that the
costs appeared on the quarterly report for September 30, 1982. The
Agency maintained that the statute and the regulation clearly required
the State to file its claim with the Agency within the two-year period
defined in the statute. The Agency insisted that to accept the State's
interpretation would be to ignore a Congressional mandate and rewrite
the provision to extend the statute of limitations by 30 days.
(3) IV. Analysis.
The Board concludes that the Agency reasonably interpreted the
statute and regulations to prohibit FFP for claims not in fact submitted
to the Agency within the two-year period.
The State asks us to reject a common sense interpretation of what
appears to be clear language, and instead, interpret "filing" to mean
that the claim can be included on the expenditure report for the last
quarter within the two-year period, even if submitted at a later date.
While the State's argument is not patently unreasonable, the State has
not shown why its somewhat strained interpretation should be adopted
instead of the Agency's or that the Agency's interpretation is
unreasonable. As the Board has said in past decisions, where the
Agency's interpretation is reasonable, the Board will not overrule the
Agency based on some alternate interpretation which the Agency might
have adopted. See, e.g., Colorado Department of Social Services,
Decision No. 169, April 30, 1981.
Section 304.25(b) is a rule reflecting a practical necessity. The
State acknowledged that the rule allows a short time after the end of a
quarter to obtain and organize information for the expenditure report
because it would be impossible for the State to have all cost
information available immediately at the end of a quarter. Appellant's
Brief, p. 4. That purpose is not frustrated by applying the Agency's
interpretation in this case. The State could have have claimed the
disallowed costs (incurred in the quarter ended September 30, 1980) in
any of the quarters prior to September 1982. Had the State claimed
these costs on a report for an earlier quarter, it would not have
violated section 95.7 even if it had filed its claim 30 days after that
earlier quarter had ended. The State cannot rely on section 304.25(b)
for authority to violate the specific deadline established by statute.
Further, section 95.7 was in place as a regulation for over a year and a
half before the State submitted its claim for these costs; the State
therefore had ample notice of the deadline for claiming costs. 46 Fed.
Reg. 3529, January 15, 1981. If there is any reason why the State was
unable to submit a claim in the two year period, the State's recourse is
under the waiver regulations discussed below.
The Board faced the two-year limit issue in a previous case and there
reached the same conclusion. In Arizona Department of Economic
Security, the Board held that the State misconstrued the relationship
between section 95.7 and section 304.25(b). The Board said that:
merely because the State has an opportunity to submit its quarterly
report a month after the close of a quarter (4) does not mean that the
State can ignore the specific requirement that no claim can be submitted
later than two years after the quarter... in which the expenditure was
incurred.
The State's attempt to distinguish our holding in Arizona from this
case is not persuasive. Although the State correctly noted that Arizona
raised certain matters which are not at issue here, and that this State
did not make some of the arguments raised by the State of Arizona, the
Board's decision in the prior case clearly stated that the two-year
limit did not include an additional 30 days.
V. The "good cause" waiver.
In a telephone conference between the parties, the Agency indicated
that the State could apply for a "good cause" waiver under the
regulations at 45 CFR 95.19 to 95.34, even after the Board has issued
its decision. The Board does not in this decision reach any conclusions
on whether a waiver should be granted in this case.
VI. Conclusion.
Based on the reasons stated above, the Board upholds the Agency's
disallowance of $5,094 in FFP which the State claimed under Title IV-D
for certain costs incurred in the quarter ended September 30, 1980. /1/
There are conflicting references in the Agency's submissions
concerning whether the State submitted (mailed) the quarterly report
even later than October 29. It is not necessary to resolve that factual
question in view of our result here.
JULY 07, 1984