GAB Decision 553
Docket No. 84-6
July 16, 1984
Arkansas Department of Human Services;
Settle, Norval; Teitz, Alexander Ballard, Judith
The Arkansas Department of Human Services (State) appealed a
determination by the Office of Human Development Services (Agency) that
the State was ineligible for fiscal year 1982 funds under section 427(
a) of title IV-B of the Social Security Act (Act). That section
provides that a state may receive additional funds for child welfare
services, beyond the amount available to each state under section 420 of
the Act, /1/ if the state meets certain requirements for the protection
of children in foster care. The Agency approved the State's request for
additional funds based on a written certification by the State that it
met the requirements of section 427(a). However, following a review
conducted to validate the State's self-certification, the Agency advised
the State that it was ineligible for fiscal year 1982 funds and
requested the repayment of $890,680.
The Agency evaluated states' compliance with section 427(a) on two
levels. First, the Agency determined whether a state had established
policies or procedures for implementing the requirements of the Act.
Second, the Agency reviewed a sample of case records to determine
whether these policies or procedures were operational. If a state
failed to estalish a requirement as a matter of policy, or, in fiscal
year 1982, a state did not comply with the applicable requirements in at
least 80% of the cases sampled, /2/ the Agency required the return of
the additional funds.
(2) The determination of ineligibility here was based in part on the
Agency's finding that the State did not have any procedures requiring
dispositional hearings, one of the safeguards specified in the Act, for
children with respect to whom parental rights had been terminated but
who remained in foster care. Another basis for the Agency's
determination was that the State had failed to comply with all
applicable requirements of section 427(a) in at least 80% of the cases
sampled. (Letter from Acting Commissioner, Administration for Children,
Youth and Families, to Commissioner, Arkansas Department of Human
Services, dated January 4, 1984)
As we discuss more fully below, we sustain the Agency's determination
that the State was ineligible for fiscal year 1982 funds under section
427(a) on the ground that the State did not comply with the applicable
requirements in at least 80% of the cases sampled. It is therefore
unnecessary for us to address the Agency's finding that the State did
not have any procedures requiring dispositional hearings for children
with respect to whom parental rights had been terminated. For purposes
of examining case records for compliance with the dispositional hearing
requirement, we have assumed that the State is correct that, where a
court has entered a guardianship order, periodic administrative reviews
also qualify as dispositional hearing under the statute. Even assuming
this, however, we find below that in some cases the dispositional
hearing requirement was not met because guardianship orders had not been
entered until after a dispositional hearing was due.
Applicable Law
As one of the conditions for the receipt of additional child welfare
funds, section 427(a)(2)(B) requires that a state have implemented and
be operating to the satisfaction of the Secretary--
A case review system (as defined in section 475(a)) for each child
receiving foster care under the supervision of the State. . . .
(3) Section 475(5) provides that--
(5) The term "case review system" means a procedure for assuring
that--
(A) each child has a case plan designed to achieve placement in the
least restrictive (most family like) setting available and in close
proximity to the parents' home, consistent with the best interest and
special needs of the child,
(B) the status of each child is reviewed periodically but no less
frequently than once every six months by either a court or by
administrative review (as defined in paragraph (6)) in order to
determine the continuing necessity for and appropriateness of the
placement, the extent of compliance with the case plan, and the extent
of progress which has been made toward alleviating or mitigating the
causes necessitating placement in foster care, and to project a likely
date by which the child may be returned to the home or placed for
adoption or legal guardianship, and
(C) with respect to each such child, procedural safeguards will be
applied, among other things, to assure each child in foster care under
the supervision of the State of a dispositional hearing to be held, in a
family or juvenile court or another court (including a tribal court) of
competent jurisdiction, or by an administrative body appointed or
approved by the court, no later than eighteen months after the original
placement (and periodically thereafter during the continuation of foster
care), which hearing shall determine the future status of the child
(including, but not limited to, whether the child should be returned to
the parent, should be continued in foster care for a specified period,
should be placed for adoption, or should (because of the child's special
needs or circumstances) be continued in foster care on a permanent or
long-term basis); and procedural safeguards shall also be applied with
respect to parental rights pertaining to the removal of the child from
the home of his parents, to a change in the child's placement, and to
any determination affecting visitation privileges of parents.
Case Record Review -- Non-Complying Cases
For its case record review, the Agency looked at 153 case files, all
of which were for children in foster care prior (4) to April 1, 1982
whose records were not closed by September 30, 1982. (Agency's
supplemental brief dated May 23, 1984, pp. 8-9) The Agency found that
less than 80% of these cases complied with the requirements of section
427(a). On appeal, the State argued that 23 of the non-complying cases
did in fact satisfy the applicable requirements. The State asserted,
and the Agency did not dispute, that if the Board reversed the Agency's
finding of non-compliance as to 15 of the 23 cases, then the State would
meet the 80% level required to pass the case record review. (State's
brief dated February 24, 1984 p. 23) It appears in fact that there are
25 cases in dispute. /3/ As discussed below, however, we find that at
least 16 of the disputed cases were non-complying, so that the State
clearly could not meet the 80% level of compliance even if 25 cases were
disputed. In view of this finding, we need not examine the remaining
cases cited by the State.
Below we discuss three grounds on which the State challenged the
Agency's finding that timely periodic reviews or dispositional hearings
had not been held in the 16 cases pursuant to sections 475(5)(B) and (C)
of the Act, respectively. These are: (1) that the probate court had
granted guardianship of the child to the State, and that the
guardianship authorized the State to conduct dispositional hearings; (2)
that the holding in fiscal year 1982 of a dispositional hearing or
periodic review which was due in fiscal year 1981 brought the State into
compliance; and (3) that minor delays in holding periodic reviews or
dispositional hearings should be excused. Where more than one argument
applies to the same case, the case is discussed separately under each
argument.
(1) Guardianship
The Agency found that timely dispositional hearings were not held in
cases 23, 30, 34, 41, 44, 65, 85, 148, 151, and 166. (Agency Exhibit E)
The State argued that a guardianship order entered by the court in each
case authorized the State as an administrative body to hold
dispositional hearings and that the periodic reviews conducted by the
State pursuant to (5) section 475(5)(B) of the Act met the requirement
for dispositional hearings. (This was also the basis on which the State
disputed the Agency's finding that the State had no procedures for
dispositional hearings for children with respect to whom parental rights
had been terminated.) (Confirmation of conference call, dated June 12,
1984, p. 2) However, even assuming that we were to accept the State's
position, the record indicates that in six of these cases--23, 30, 34,
44, 66, and 148--the dispositional hearing was due before guardianship
was granted. (In determining the due date for the hearing, the Agency
included the "grace period" discussed on p. 7 below) The State advanced
no reason why the mere filing of a petition for guardianship would
obviate the necessity for any hearing other than the periodic review
conducted by the State. The statute requires court appointment or
approval if an administrative body is to conduct dispositional hearings
in lieu of the court. The filing of a petition for guardianship
involves no court action which could be construed as such an appointment
or approval, however. Accordingly, we reject the State's argument that,
because guardianship was ultimately granted in these six cases, periodic
reviews which may have been conducted by the State before that time
satisfied the requirement for a dispositional hearing.
(2) Correction of Fiscal Year 1981 Errors
The Agency found that in cases 24, 30, 66, 73, and 87, there was no
timely dispositional hearing, and that case 40 failed to have timely
periodic reviews. Each case had been found to be non-complying on the
same basis in the fiscal year 1981 case record review. The State argued
that the error was corrected in each case in 1982 when a dispositional
hearing or a periodic review (as appropriate) was held, and that it was
therefore improper for the Agency to penalize the State twice for the
same error. The State asserted that the Agency's treatment of this
situation had the result that a state which complied in less than 80% of
the cases sampled the prior year would automatically fail the next
year's review. (State's brief dated February 21, 1984, pp. 18-19)
The Agency responded that it was not permitted to ignore the fact
that a child not provided the required procedural safeguards in fiscal
year 1981 may still not have been afforded the procedural safeguards in
fiscal year 1982. (Agency's brief dated April 3, 1984, p. 11) However,
the Agency stated that its policy was to count an error in both (6)
fiscal year 1981 and fiscal year 1982 only if the error was not
corrected in the first quarter of fiscal year 1982. (This policy is set
forth in PI-82-06, Attachment D, Policy Guidance for Certain Section 427
Requirements, which provides that "States have a 90 day 'grace period'
to make cases that are unacceptable in the initial fiscal year under
review, acceptable in the following fiscal year." (Agency Exhibit I, p.
5)) The Agency asserted, and the State did not dispute, that none of the
errors were corrected within that time period, i.e., by December 31,
1981. (Confirmation of telephone conference call, dated June 12, 1984,
p. 3) The State replied that its understanding was that states had until
March 31, 1982 to correct any errors, but was unable to substantiate
that belief. (Id.)
We are not persuaded that the Agency erred in finding these cases out
of compliance in fiscal year 1982 on the same basis as in the prior
year. Once the State failed to hold a dispositional hearing within 18
months of a child's original placement, or failed to have a periodic
review within six months of the last such review, a subsequent
dispositional hearing or periodic review would not bring the State into
strict compliance with the applicable requirements since neither
proceeding would be within the required time limit. Nevertheless, this
might be viewed as too literal an interpretation of these requirements.
Since the statute authorizes a separate grant of funds for each year, it
is arguable that eligibility for funding in one year should not be
potentially contingent on eligibility in a prior year. /4/
The Agency resolved this dilemma by permitting states to "correct"
a
fiscal year 1981 error by holding a dispositional hearing or a periodic
review by the end of the first quarter of fiscal year 1982. The State
did not contend that it did not recognize fiscal year 1981 errors soon
enough to correct them within this time period. Accordingly, the fiscal
year 1981 errors not corrected within this time period were not
precluded from being cited as fiscal year 1982 errors as well.
(7) (3) Minor Delays
The Agency found that in cases 10, 34, 46, 78, 125, 146, 156, and
159, dispositional hearings or periodic reviews were not held in a
timely fashion. The State argued that the Agency failed these cases
based on "rigid technical interpretations. . . ." (State's brief dated
February 21, 1984, p. 19) The State asserted that cases 10, 46, 125,
146, and 159 involved de minimis delays ranging from two to 38 days, and
that cases 34, 78, and 156 involved delays of up to two and one-half
months which should be excused due to a variety of extenuating
circumstances. (Id., pp. 19-22) /5/ The Agency responded that the State
failed to take into account that the states were given a 90-day "grace
period" beyond the required time for holding dispositional hearings for
children who were in foster care at the time section 427 became
effective (June 17, 1980), and a 30-day "grace period" to meet deadlines
for other dispositional hearings and for periodic reviews. (Agency's
brief dated April 3, 1984, p. 11) /6/
The State did not dispute that it failed to include in its
calculations of the delays the 30- and 90-day "grace periods" given
by
the Agency. Where the Agency has already excused a delay of 30 or 90
days, as appropriate, we see no basis for finding that a further delay,
however short, should also be excused on the ground that it was de
minimis. In requiring that the states have implemented and be operating
the required safeguards "to the satisfaction of the Secretary" in
order
to be eligible for funding, the Act gives the Agency discretion to waive
minor violations. (Vermont Department of Social and Rehabilitation
Services, Decision No. 546, June 27, 1984, p. 10) In excusing delays of
up to 30 or 90 days, as appropriate, but no longer, the Agency exercised
its discretion in a reasonable manner.
We are not persuaded, moreover, that any of the extenuating
circumstances noted by the State justified waiving the applicable time
limits. The State asserted that it failed (8) to hold a dispositional
hearing in case 34 because a petition for guardianship was pending.
However, as discussed above, we see no reason why the filing of such a
petition should toll the time for holding a dispositional hearing. The
State also alleged that, although case 78 was two months late, the total
number of reviews actually held in that case exceeded the number
required by law. However, the fact that some reviews may have been held
more frequently than required, either prior or subsequent to a delayed
review, would not eliminate the possible detrimental effect on a foster
care child of a long period without any review of his situation. (It
also appears that the dispositional hearing in case 78 was delayed
longer than the two months indicated by the State. (Agency Exhibit E))
Finally, the State alleged that in case 156 the court held a hearing two
and one-half months after the due date despite the fact that a hearing
was requested well in advance of the due date. In our view, however,
the court's failure to set a hearing when requested is not properly
considered in determining whether the State complied with the Act. It
is implicit in Section 427 that states must provide the resources
necessary to implement the required safeguards and insure that courts
understand their role in implementing these safeguards. To recognize a
court's lack of resources or diligence as an excuse for non-compliance
would defeat the purpose of the statute.
Case Record Review -- Universe Sampled
The State also challenged the Agency's finding of ineligibility on
the ground that the universe from which the sample of cases was drawn
skewed the results of the case review. As noted previously, the sample
was drawn from those cases involving children who entered foster care
prior to April 1, 1982 and who were still in foster care as of September
30, 1982. Thus, all cases selected for review involved children in
foster care for at least six months during fiscal year 1982 who remained
in foster care through the end of the fiscal year. (Agency's brief
dated May 23, 1984, p. 8; Confirmation of telephone conference call,
dated June 12, 1984, p. 4) The State argued that excluding cases in
foster care less than six months from the universe sampled was unfair
since short-term foster care cases were less likely than long-term
foster care cases to be found non-complying. The State alleged that
this exclusion possibly resulted in the Agency's finding a
disproportionately higher percentage of non-complying cases than it
would have if the sample had been drawn from the (9) entire foster care
caseload. (We assume that, in referring to the entire foster care
caseload, the State intended only those children in foster care "under
the supervision of the State," within the meaning of the Act.) The State
argued that since section 427 funding was used to benefit the entire
foster care caseload, that was the appropriate universe from which to
draw the sample. (State's brief dated February 21, 1984, pp. 11-12)
The Agency agreed that long-term foster care cases were more likely
to be found non-complying. The Agency asserted, however, that since it
was charged with assuring compliance with the section 427 safeguards,
cases reviewed should involve only children in foster care long enough
to have been entitled to the safeguards. (Agency's brief dated May 23,
1984, pp. 6-8) The Agency stated that the universe was limited to
children in foster care at least six months since six months was the
point at which the section 427 protections, specifically, the
requirement for a periodic review, become operative. The Agency further
stated that it was also able to review cases of that age for compliance
with the requirement for a case plan, although no time period is
specified in the Act for meeting that requirement. (Confirmation of
telephone conference call, dated June 12, 1984, p. 4)
The State asserted, however, that under State law, the case plan was
required within 30 days after the child enters foster care, and argued
that under the Agency's rationale, the universe should have included all
cases at least 30 days old. The State noted that Agency's program
instruction PI-82-06 permitted states which required periodic reviews
more frequently than every six months to include such cases in the case
record sample, although such cases would be less than six months old,
and argued that the situation presented here was analogous. (State's
Supplementary Documentation dated June 7, 1984, pp. 2-3)
We are not persuaded that the Agency improperly limited the universe
of cases to be reviewed to cases involving children in foster care for
at least six months during fiscal year 1982. /7/ The purpose of the
case record review was to (10) verify that states had implemented the
section 427 safeguards. The Act requires that states be operating "to
the satisfaction of the Secretary" a case review system "for each
child
in foster care. . . ." The Agency could have therefore required
compliance with the applicable safeguards in 100% of a state's foster
care caseload for fiscal year 1982, with some leeway for minor
violations. The Agency instead selected only a portion of the caseload
for review and required compliance with the applicable safeguards in
only 80% of the cases reviewed. /8/ We see no reason why the Agency
should have been required to draw a sample from the entire caseload.
Furthermore, the criteria used to select the sample were reasonable.
By including only those cases which were at least six months old, the
Agency was able to verify compliance with the greatest number of
safeguards for the sample size. This was thus an efficient way of
carrying out the Agency's mandate to assure that the State was operating
a case review system which complied with the requirements of the Act.
The fact that states which required periodic reviews more frequently
than every six months were permitted to expand their sample to include
some cases open less than six months does not justify expanding the
sample here on the basis thawt the State required case plans within 30
days since that would not permit the Agency to monitor compliance with
the periodic review requirement in the short-term cases.
Constitutionality of Requirement for Dispositional Hearing
The State also argued that the requirement in section 427 for a
dispositional hearing was unconstitutional both on its (11) face and, in
the case of children with respect to whom parental rights had been
terminated, as applied to the State. To the extent that the case record
review relied on an invalid requirement, that would render the results
of the case record review invalid. The State asserted that, in order to
delegate a judicial function to a non-judicial body, the judicial
authority which delegates the function must retain authority to review
any adjudicatory action of the non-judicial body. The State argued that
since, under section 475(5)(C), a court would have no further authority
after appointing an administrative body to conduct dispositional
hearings, the delegation was an unconstitutional violation of the
doctrine of separation of powers and violated the due process rights of
the persons involved as well. /9/ (State's brief dated February 21,
1984, pp. 3-4; State's reply brief dated April 11, 1984, p. 2) In
addition, the State argued that the Act was unconstitutional as applied
to the State since the Act assumes the existence of a court with
jurisdiction of general custody matters which can either hold
dispositional hearings itself or delegate the authority to do so to an
appropriate administrative body. Arkansas law does not provide for any
such court in the case of children with respect to whom parental rights
have been terminated. (State's brief dated February 21, 1984, pp. 4-6)
Since the Board is bound by all applicable laws and regulations (45
CFR 16.14), it appears to be outside the (12) scope of the Board's
authority to reverse an Agency determination on the basis that the
controlling statute is unconstitutional.
We are not persuaded, in any event, by the State's argument that the
requirement for a dispositional hearing is unconstitutional. The State
acknowledged that since the Act allows the court to retain the authority
to conduct dispositional hearings, this would cure the alleged
unconstitutionality of the Act's provision for delegating judicial
authority to hold such hearings (were it not for the State's other
objection discussed below). (State's brief dated February 21, 1984, p.
3) Moreover, the fact that State law does not provide for a court with
the necessary jurisdiction to conduct dispositional hearings for
children with respect to whom parental rights have been terminated does
not render the requirement for such hearings unconstitutional. The Act
does not require as a matter of federal law that a state establish
courts which can hold dispositional hearings; it merely conditions
eligibility for federal financial assistance--which a state may choose
to forgo--on the existence of such courts. Thus, the fact that a state
may be precluded by its own laws from complying with this condition for
federal funding is not a sufficient ground to invalidate that condition
if it is otherwise unobjectionable. (See State of North Carolina Ex.
Rel. Morrow v. Califano, 445 F. Supp. 532 (E.D. N.C. 1977), aff'd per
curiam, 435 U.S. 962 (1978))
Notice to State of Standards for Review
The State also argued that it did not have adequate notice of the
standards for reviewing compliance with section 427. It asserted that
the sole prior notice available to it regarding the fiscal year 1982
review was the Act itself, and that the Act "does not clearly spell out
the standards which formed the basis of the . . ." findings of
non-compliance. The State quoted in this connection a letter in which
the Assistant Secretary for Human Development Services stated that "in
conducting the reviews we found that the statute was not sufficiently
clear in all its aspects." (State's brief dated February 21, 1984, pp.
8-11) However, the State did not point to nor do we see any ambiguity in
the statutory requirements for periodic reviews and dispositional
hearings which we find were violated here. Accordingly, we find that
the State had adequate notice of the applicable law. /10/
(13) Unequal Enforcement of Section 427 Requirements
The State also argued that the Agency did not enforce the section 427
requirements in the same manner with respect to all states. (State's
brief dated February 21, 1984, pp. 11, 16-17) The same argument was
raised in Vermont Department of Social and Rehabilitation Services,
Decision No. 546, June 27, 1984. Pursuant to 45 CFR 16.21( a), the
Board has incorporated the briefing and documentation presented in that
appeal regarding the issue of unequal enforcement into the record for
this appeal. (Board's letter dated May 1, 1984) The rationale for the
Board's ruling on this issue in Decision No. 546 applies here as well.
There, the Board held that, even assuming that the State was treated
differently from other states, that fact would have no impact on the
appeal. The Board stated that where reversing the Agency's
determination would be in conflict with the statute under any reasonable
reading, the Agency's alleged failure to enforce the statute
consistently would be insufficient as a basis for reversal. Since the
statutory requirement at issue in that case was clear, the Board
declined to consider the issue further. (Decision No. 546 at p. 9) As
noted previously, we see no ambiguity in the statutory requirements at
issue as applied in the instant case. Accordingly, the State's
allegation of unequal enforcement does not provide a basis for reversing
the Agency's determination that the State was ineligible for section 427
funds for fiscal year 1982.
Conclusion
For the foregoing reasons, we find that the State failed to comply
with the applicable requirements for dispositional hearings and periodic
reviews in 80% of the cases sampled. Accordingly, we sustain the
Agency's determination that the State was ineligible for $890,680 in
section 427 funds in fiscal year 1982. /1/ The additional funds are a
proportional share of the amount appropriated for title IV-B
which exceeds $141,000,000. The amount in dispute in this case also
includes title IV-E funds transferred to title IV-B and subject to the
requirements of section 427(a) under section 474(c) of title IV-E.
/2/ A case record review for fiscal year 1982 was conducted only in
those states which had less than an 80% level of compliance in fiscal
year 1981. States which complied in less than 80% but at least 66% of
sampled cases were found "conditionally" eligible in fiscal year 1981.
(Agency Exhibit H, (PI 82-06, Attachment E), p. 1) /3/ The
State's submissions refer to the following cases: 8, 10, 23, 24, 30,
34, 40, 41, 44, 46, 65, 73, 78, 85, 87, 103, 123, 125, 146, 148, 151,
156, 159, and 166. All except case 123, which is addressed in the
State's Supplementary Documentation dated June 21, 1984, are discussed
in the State's February 21, 1984 brief. /4/ A finding of
non-compliance in any particular case would not necessarily render the
State ineligible for funding, however, as long as the State complied
with all applicable requirements in at least 80% of the cases sampled.
/5/ Cases 10, 46, 125, 146, and 159 involved delays in periodic reviews.
Cases 34, 78, and 156 involved delays in dispositional hearings.
(Agency Exhibit E) /6/ Although the Agency's brief itself does
not indicate that a 30-day "grace period" was given for periodic
reviews, Agency Exhibit E shows that this was the case. /7/ The
State did not contend that it was improper for the Agency to include
only cases which were still open at the end of the fiscal year. It
appears in any event that this limitation is justified on the basis,
discussed below, that the Agency had reasonable discretion in choosing
the cases to be reviewed. /8/ The wording of Agency program
instruction PI-82-06 regarding the cases to be reviewed is not entirely
free from ambiguity. However, read as a whole, PI-82-06 clearly
indicates that the sample is to be drawn from a limited class of cases
and that eligibility for funding will be determined based on compliance
in a specified percentage of the sampled cases. Moreover, that the
standard may have been inartfully articulated would not affect the
Agency's discretion in this matter since the State did not allege that
it relied on PI-82-06 (dated June 3, 1982) in implementing the
requirements of section 427 and since essentially the same standard was
used for all states. /9/ The State also argued that since the
Act failed to provide for a proper delegation of judicial authority to
conduct dispositional hearings, periodic reviews conducted by the State
without court appointment or approval of the State as the administrative
body to conduct dispositional hearings should nevertheless be considered
as dispositional hearings. (State's brief dated February 21, 1984, p.
16) However, the alleged unconstitutionality of the Act's provisions for
delegation of judicial authority does not authorize the State to rewrite
the statute to fit its needs. Since the provision for court appointment
or approval of an administrative body cannot be excised from the statute
without disrupting the entire statutory scheme, we see no basis for
considering reviews held by the State without court appointment or
approval to be in compliance with section 427. /10/ Any ambiguity in
the application of these requirements in contexts not considered here is
of course irrelevant. (See Vermont Department of Social and
Rehabilitation Services, Decision No. 546, June 27, 1984, p. 7)
NOVEMBER 14, 1984