GAB Decision 503
Docket No. 83-88
January 31, 1984
Rhode Island Department of Community Affairs;
Ballard, Judith; Ford, Cecilia Garrett, Donald
The Rhode Island Department of Community Affairs (DCA, State)
appealed a decision by the Associate Commissioner for Family Assistance,
Social Security Administration (SSA) to disallow $49,184 for the federal
share of DCA's FY 1981 low income energy assistance program (LIEAP).
DCA appealed $36,036 of the amount disallowed. During the course of the
appeal DCA conceded that $12,069.61 had been improperly paid to
recipients yet asserted that it should be excused because it represented
a miniscule percentage of the entire program outlay. The primary issue
as formulated by the parties relating to the remaining $24,654.39 in
payments is whether they were duplicate because they resulted from
different members of the same household applying for and receiving
assistance. There was also a secondary issue present as to whether the
payments were otherwise erroneous. Based on the reasons set forth
below, we find SSA's interpretation of the definition of "duplicate
payment" to be unreasonable in light of Rhode Island's program, but we
remand the case to the parties so that DCA can document that the
payments were not erroneous. We further decide that there is no basis
for excusing the payment errors.
Background
During the FY 1981 low income energy assistance program, each
eligible household in Rhode Island was entitled to a maximum of $745 in
assistance. This maximum was made made up of three parts. A client,
filling out an application detailing the income picture for the
household, could be found to be income eligible. The household could
then present up to $300 worth of energy bills (depending on income
level) to the intake agency, which then would make payments to the
vendors for those bills. The second was an emergency part of the
program in which a client who had no heat, having exhausted the original
$300, could have the intake agency authorize an energy delivery. The
vendor would directly bill the intake agency for a maximum of $300 for
the year. The final $145 payment was made to clients toward the end of
the program year with money "left over" (Transcript of telephone
conference (Tr.), november 23, 1983, p. 10), which was not money paid
for a specific bill.
(2) In the 72 cases in dispute here, two members of the same
household applied for energy assistance and received it. In some cases,
the combined payments equalled or were less than $745. In other cases,
the total was more than $745, and the State has agreed that the excess
was improper.
Program Regulations
The introduction to the program regulations at 45 CFR 260.1(a)(1980)
makes it clear that assistance is provided for eligible low income
households. "Household" is defined at 260.2:
. . . any individual or group of individuals who are living together
as one economic unit and for whom residential energy is customarily
purchased in common, or who make undesignated payments for energy in the
form of rent.
The regulations forbid duplicate payments, which are more than one
payment "attributable to the same energy costs for the same household."
(260.152(e)) In addition payments "to or on behalf of households not
meeting the eligibility and payment requirements under the State plan"
are not allowable. (45 CFR Part 260, Appendix B, Section C (1))
Error Rate
The State noted that only .00049% of the total number of payments
were questioned, certainly within an acceptable error rate. The State
asked that the Board consider that the errors arose from the State
operating the program in an expeditious manner (rather than
mismanagement). The State argued that the consequence of a Board ruling
that there is no acceptable error rate would be that a state would have
to retain a reserve cushion which would defeat the emergency nature of
such a program.
The Board has ruled in prior decisions that the 1979 LIEAP did not
allow for tolerance of errors. Mississippi Department of Public
Welfare, Decision No. 431, May 31, 1983; Alabama Department of Pensions
and Security, Decision No. 427, May 24, 1983; New Jersey Department of
Human Services, Decision No. 408, April 26, 1983. There is nothing in
the Home Energy Assistance Act of 1980 or the regulations relevant to
this appeal which would require us to alter our prior analysis.
We have no indication that the prior situations were any more or less
cases of mismanagement than Rhode Island. Indeed, all the states have
argued that their problems arose because of short lead times for
implementation of the program and not because of mismanagement. But the
regulations and statute did not provide for payment for errors in any
circumstance, and the Board cannot find otherwise.
(3) Duplicate and Erroneous Payments
SSA argued that payments to one household under more than one
application for assistance represent per se a duplicate payments because
(1) the programmatic scheme contemplates only one person per household
making out an application; and (2) more than one person making out an
application means that assistance will be given more than once for the
same energy picture. SSA did not point to specific provisions anywhere
which state that only one person per household can apply for assistance
(including the definition of duplicate payment in the regulation) and
the Rhode Island LIEAP state plan does not so provide. Based on this,
we find SSA's interpretation of the duplicate payment definition as it
applies to the Rhode Island situation to be an unreasonable one.
The Agency, however, intimated throughout the dispute that the
payments were also erroneous because the State, in determining the
proper level of assistance, did not consider the entire, combined income
picture of the household. The audit report, upon which the disallowance
was based, states that the auditors originally identified 589 instances
where two individuals receiving assistance had similar addresses. The
auditors then performed a more detailed review of 155 of those cases and
found that 72 households had received improper payments. They examined
assistance applications and recomputed the amount allowable based on the
combined reported family circumstances. The auditors found that in some
cases, the combined income of the two individuals made the household
ineligible for any payments, and in other cases, the household remained
eligible but for a reduced amount. (Audit Report, p. 8)
The Agency did not develop this issue during the course of the
appeal. Nevertheless, we agree that there might be grounds for a
determination that there were erroneous payments, given that the State
admitted that, for the purposes of the appeal, it was not arguing that
the two people belonged to separate households (Tr. p. 3) and that there
probably were erroneous payments (Tr. pp. 4, 5). Within 30 days of
receipt of this decision (or a longer period to which the Agency may
agree), the State should provide evidence to the Agency that the 65
households * (1) were eligible for LIEAP payments, and (2) received no
more assistance than they were entitled to. To assist the State, the
Agency should make available any relevant auditors' workpapers. The
Agency should make determinations based on this information as to
whether any of the payments were erroneous. If the State disagrees with
any of these findings, it can appeal to the Board.
(4) Conclusion
We find that the Agency's determination that the payments in question
were per se duplicate to be unreasonable. We remand the case to the
parties so that the State can further document its claims in accordance
with the discussion above. * The State conceded the disallowance
pertaining to 7 households because of lack of information. (Appellant's
Appeal Brief, p. 3)
NOVEMBER 14, 1984