DEPARTMENTAL GRANT APPEALS BOARD
Department of Health and Human Services
SUBJECT: California Department of Social Services
Docket No. 86-243
Audit Control No. 50260-09
Decision No. 868
DATE: May 12, 1987
DECISION
The California Department of Social Services (California, State)
appealed
a disallowance by the Office of Refugee Resettlement (ORR,
Agency) of
$30,157,810, for payments to refugees residing in California,
for the period
April 1, 1981 through September 30, 1982. ORR later
reduced the
disallowance to $28,163,299.
In a Partial Decision on December 5, 1986 (No. 816), we decided all
but
one of the issues raised by the State's appeal. The remaining
issue,
addressed here, is whether ORR was wrong in rejecting the
State's
documentation of the eligibility for refugee assistance of
certain
recipients in Los Angeles County.
The State did not dispute that recipients were required to file a
monthly
report of income, resources, and other circumstances related to
eligibility
for assistance payments to refugees and, indeed, the State
specifically
acknowledged that this monthly report was a condition of
eligibility for such
assistance. The monthly report requirement derived
from the Aid to
Families with Dependent Children (AFDC) program and the
State adopted it for
the Refugee Resettlement program (RRP) administered
by ORR. Thus, we
conclude that ORR generally could disallow payments
where eligibility was not
documented by a monthly report. However, for
the period October 1, 1981
through September 30, 1982, we conclude that
ORR was bound by a "waiver,"
originating in the AFDC program, by which a
payment was allowable if made to
an otherwise eligible recipient who had
not filed the required monthly
report. Even during the waiver period,
the State had to provide
adequate alternative documentation filed within
six months of the month for
which eligibility had to be determined.
Based on these conclusions, we
examined the documentation offered by the
State and found that ORR had
correctly determined 37 of 73 payments to
be unallowable, but had erred with
regard to the remaining 36
payments.
.
Background
The Refugee Resettlement program administered by ORR is based on
the
Refugee Act of 1980 (Public Law 96-212), its predecessor
legislation,
and subsequent amendments not relevant here. Under the
program, cash
and other assistance and services to refugees were provided
under
alternative existing federally funded programs such as AFDC
and
Medicaid. If a refugee did not meet the eligibility requirements
under
such an alternative program, he or she was provided assistance
under
ORR's Refugee Cash Assistance and Refugee Medical Assistance
programs.
The states have the responsibility for determining eligibility under
the
Refugee Resettlement program, in accordance with federal
regulations.
An action transmittal issued by the Agency directed
that
"[r]ecertification and any other State eligibility reports shall
be
required for refugee assistance recipients at least as frequently as
for
AFDC recipients." SRS-AT-76-160, October 22, 1976; State's October
1985
submission, Exhibit 3, p. 7. The State agreed in its State Plan
for
Refugee Assistance and Services (1980) that "[p]rogram policies
and
standards for Refugee Cash Assistance will be the same as in the
AFDC
program . . . policies and standards contained in applicable
federal
Action Transmittals and Policy Memoranda will be observed in
state
administration of this program." State's October 1985
submission,
Exhibit 7, p. 25. The State implemented the Action
Transmittal by
adopting monthly reporting for refugee assistance as it had
for AFDC,
using a form designated CA-7. California Eligibility and
Assistance
Standards Manual 40.181.2; ORR's January 8, 1987 submission,
Exhibit 2.
AFDC regulations prior to October 1, 1981 gave states the choice of
a
prospective or a retrospective system for making eligibility
and
budgeting determinations. See 45 CFR 233.21(a) (1980). Under
the
retrospective system, which California chose, the State computed
the
assistance payment on the basis of actual income or circumstances
which
existed in a previous month, the "budget month." 45 CFR
233.21(b)(2).
On and after October 1, 1981, retrospective eligibility reporting
and
budgeting in AFDC became mandatory for all states, as a result of
the
Omnibus Budget Reconciliation Act of 1981 (OBRA) (Public Law
97-35,
Section 2315(a); 42 U.S.C. 602(a)(14)). OBRA amended the
Social
Security Act to mandate states 1) to require "as a condition to
the
continued receipt of . . . aid" a monthly report and 2) to take
"prompt
action to adjust the amount of assistance payable . . . on the basis
of
the information contained in the report (or upon the failure of
the
family to furnish a timely report) . . . ." Id. An AFDC
Action
Transmittal issued shortly after OBRA became effective instructed
states
which were implementing retrospective systems as a result of OBRA
that
for the period October 1, 1981 through September 30, 1982,
payment
errors such as the lack of a monthly report "will be recorded and
used
for management information purposes but will not be included
in
computations of payment error rates" in the AFDC Quality Control
system.
SSA-AT-81-38, November 20, 1981; ORR January 8, 1987 submission,
Exhibit
8. Later, this procedure was restored and applied also to
states which
had adopted retrospective systems prior to OBRA and the time
period was
extended through September 1985. Letter dated July 27, 1984
from the
Associate Commissioner for Family Assistance to Regional
Administrators;
ORR February 23, 1987 submission, Exhibit 12. Shortly
thereafter,
California was specifically advised by the Regional Administrator
of
Family Assistance:
After careful review, the Associate Commissioner for
Family
Assistance has determined that all state
monthly reporting systems
were sufficiently affected
by OBRA that all monthly reporting
errors for all
states should have been classified as implementation
errors. Because California had implemented a monthly
reporting
system prior to OBRA, the original waiver
was not applied to errors
caused by the issuance of
a payment without a monthly report on
file for the
corresponding budget month. As a result of
this
decision, all such existing errors will be
removed from the QC
error count and not counted for
the periods from October 1981
through September
1985.
Letter of August 3, 1984; State's submission of February 5,
1987,
Attachment E.
Procedural History
As noted above, on December 5, 1986, we issued a Partial Decision
(No.
816) in this case. The record in that part of the case is
incorporated
herein. In that decision, we upheld ORR's use and choice
of a
statistical sampling methodology to determine a disallowance,
but
deferred resolution of the issue of whether ORR correctly
determined
that 73 individual cases in a sample drawn from Los Angeles
County
payments were not allowable. ORR alleged that the payments were
not
allowable because the County did not have in the file for each
sample
payment a monthly report establishing the recipient's
eligibility. The
Board gave the parties an opportunity to develop the
record on that
issue.
To assist the parties in developing the record, the Board accompanied
the
Decision with a separate letter asking the parties to address
several
questions. The questions in part dealt with the issue of
whether lack
of the CA-7 monthly reporting form would have been
considered an error on
which a disallowance could be taken in the AFDC
program:
a. Does ORR dispute the State's position that lack of a
monthly
report would not have been a basis for a disallowance in
AFDC
during the audit period?
b. If so, on what does ORR base its position?
ORR and the State each submitted two responses. In deciding the
issue
of whether ORR correctly determined the 73 payments to be
unallowable,
based on these and earlier submissions of the parties, we found
that the
other questions had become irrelevant and therefore we do not
discuss
them in this Decision.
The_Responses
Initially, ORR responded that 1) lack of a monthly report would have
been
a basis for a disallowance in the AFDC program during the audit
period; and
2) the substitute documents and other evidence of
eligibility submitted by
the State in this case are not acceptable to
ORR. In an amended
response filed subsequently, ORR reported that for
that part of the audit
period October 1, 1981 through September 30, 1982
(and, beyond this case,
through September 30, 1985), monthly reporting
errors (i.e., payments not
supported by a monthly report) were to be
counted in the AFDC Quality Control
system as errors for management
purposes only, and were not included in the
calculation of a state's QC
error rate. Thus, monthly reporting errors
could not be the basis of a
disallowance in the AFDC program during the
period October 1, 1981
through September 30, 1982. ORR continued to
maintain that, despite the
AFDC waiver, monthly reporting errors could be a
basis for a
disallowance in the Refugee Resettlement program because ORR had
never
adopted the AFDC Quality Control system and because ORR had
not
specifically adopted the AFDC waiver of monthly reporting errors.
The
State contended that during the pre-OBRA period, the lack of a
monthly
report was treated as a "procedural" error, even though the
monthly
report requirement was a condition of eligibility, and thus the
payments
were allowable. The State argued that the post-OBRA payments
were
allowable because the AFDC waiver applied.
Discussion
1. The pre-OBRA period (April 1 - September 30, 1981)
ORR argued that the AFDC regulations authorized disallowances for
payments
to recipients whose eligibility was not documented by a monthly
report where
that report was required under federal and State law as a
condition of
eligibility during the period April 1, 1981 - September 30,
1981.
California specifically stated that it did not dispute that the
requirement
of a monthly report was a condition of eligibility of an
AFDC recipient and
even agreed that lack of a monthly report was a basis
for the State to
terminate a recipient's benefits. State's submissions
of February 5 and
March 17, 1987. California argued, nonetheless, that
during the period
in question, the State treated the lack of a monthly
report as a "procedural"
error which would not be the basis for a
disallowance. California
relied on the affidavit of a 20-year employee
who had been Chief of the
Policy and Procedure Unit of its Quality
Control Branch since 1982, and
allegedly supporting attachments.
The federal AFDC regulations cited by ORR define as a "case error"
a
payment to an ineligible. 45 CFR 205.40(a)(2). Federal and
State AFDC
regulations require notice to a recipient if termination of
benefits is
threatened. 45 CFR 206.10(c)(7); 45 CFR 233.28(a)(6);
California
Eligibility and Assistance Standards (EAS) Manual 40.181.2.
However,
federal AFDC regulations define a payment to an ineligible as a
payment
received when an individual was not eligible "even though the
State
agency had not made a finding of ineligibility . . . ." 45
CFR
205.40(a)(3). Thus, by definition, the lack of a monthly report is
a
case error even though the State might not have completed, or
even
commenced, the administrative process required prior to a
determination
of ineligibility because, as both parties agreed, a monthly
report was a
condition of eligibility.
The attachments to the affidavit of the State's witness included
two
documents dated prior to the period in question. State's February
1987
submission, Attachments A & B. The first is a December 1974
internal
State memorandum advising State regional managers that
incomplete
monthly reports will be considered "procedural" errors. The
memorandum
does not mention missing monthly reports. The second is an
April 1975
question-and-answer internal State memorandum to its Welfare
Program
Evaluation Branch. It describes a situation in which a
recipient did
not submit a monthly report and was given a "notice of
discontinuance"
but the county did not terminate assistance. The
question was whether
the State would treat the county's "failure to
discontinue" as
"procedural" or "determine the case ineligible" on the basis
of the
notice of discontinuance. The answer was: "procedural,"
but was given
in a circumstance where it appears there was still a
possibility that
the recipient might submit the monthly report. Both of
these documents
predated the August 1975 amendments to the AFDC regulations
which for
the first time defined "case error" and included payments made to
an
ineligible even though the State had not made a formal finding
after
notice and an opportunity to be heard. 45 CFR 205.40(b)(2)
(1975); 40
Fed. Reg. 32957 (August 5, 1975). Thus, the offered
documents do not
disprove that a payment in the absence of a monthly report
was a case
error during the period April 1, 1981 - September 30, 1981.
The State also submitted two documents dated February and March 1983
--
subsequent to the period in question. State's submission of
February
1987, Attachments C & D. The first, an internal State
memorandum to the
Chief of its Review and Evaluation Branch, refers to "past
QC review
procedures" which allegedly identified errors such as the lack of
a
monthly report "as procedural with no dollar impact" and notes
that
"[u]nder the new mandate [post-OBRA] nonreceipt of the CA 7 by the
CWD
[county welfare department] will now be identified by QC as a
regular
error, and will be counted when calculating the QC error rate. . .
."
The "past QC review procedures" are not identified by source in
the
memorandum and the only such documents produced by the State in
this
proceeding are the 1974 and 1975 memoranda discussed above (and which
we
find inconclusive). Thus, whatever this 1983 memorandum may
reveal
about the understanding of its author in 1983, it is not
convincing
proof that this was the State's understanding in 1981, much less
that
such understanding was soundly based or made known to federal
AFDC
officials.
The second 1983 document is an internal State memorandum from the
same
author to the AFDC-QC staff. It describes the following
procedural
change (retroactive to October 1982):
If the QC reviewer discovers that the required monthly
report
(CA-7) was not received and assistance was not terminated,
a
Regular Ineligibility Error Exists.
The changed procedure apparently superseded AFDC-QC review
procedures
issued in June 1981. These are not in the record, nor did
the State
describe them. Thus, we do not have an adequate basis to
evaluate the
stated change and find it to be of little, if any, probative
value in
discovering the State's procedure during the period in question.
The State's affiant concluded that "monthly reporting errors were
counted
as procedural only by State practice prior to October 1, 1981
(actually until
October 1, 1982) and by federal waiver for the remainder
of the April 1, 1981
through September 30, 1982 audit period."
(Emphasis added.) As
discussed above, we are not persuaded that the
State has proved by the
offered documentation that State, much less
federal, policy during the period
April 1, 1981 through September 30,
1981 was to treat the lack of a monthly
report as merely a "procedural"
error and not as a case error.
The affidavit offered by the State is flawed in that it purports to
prove
only what the State practice was during the period, not federal
policy.
It does not even purport to show that the State communicated
its alleged
practice to the federal AFDC program officials.
Thus, we find, in light of federal and State regulations and the
State's
admission that monthly reporting was a condition of eligibility,
that
for the period April 1, 1981 - September 30, 1981, a payment made in
the
absence of a monthly report was an error on which a disallowance
could
be based in the AFDC program, and, consequently, the
Refugee
Resettlement program.
2. The post-OBRA period (October 1, 1981 - September 30, 1982).
This brings us to the part of the period covered by the audit
following
the passage of OBRA. As noted above, at p. 2, OBRA made
monthly
reporting mandatory in AFDC, and thus the RRP. However, we also
noted
that in AFDC a waiver was granted so that even in states which
had
previously required monthly reporting, such as California, a payment
not
documented by a monthly report was allowable. The question here
was
whether the AFDC waiver applied to the RRP.
ORR argued that in California, as in other states which had
voluntarily
adopted a retrospective budgeting system, payments made in the
absence
of a monthly report continued to be errors which could be the basis
of a
disallowance in the Refugee Resettlement program. ORR contended
that
the AFDC waiver, which counted payments made in the absence of a
monthly
report as AFDC-QC errors for management purposes only and not in
a
state's AFDC-QC error rate, did not apply to the RRP because ORR did
not
employ the AFDC-QC system for disallowances and had not adopted the
AFDC
waiver. California argued in effect that if AFDC policies
pertaining to
eligibility apply in the Refugee Resettlement program, then
AFDC
policies regarding the treatment of errors as a basis for a
disallowance
should also apply.
Given that the waiver clearly applied in the AFDC program post-OBRA,
and
that the Refugee Resettlement program clearly was bound through
action
transmittals to apply AFDC's policies pertaining to eligibility
reports,
the issue becomes whether ORR was arbitrary in refusing to apply
the
AFDC waiver to the Refugee Resettlement program. We find that ORR
was,
because there is no reasonable basis for distinguishing this one
policy
from other applicable policies.
As we noted above, the State agreed with ORR's contention that the
monthly
report was a condition of eligibility in the AFDC, and thus the
Refugee
Resettlement, programs. We held that during the pre-OBRA
period, when
such a payment error could be the basis of a disallowance
in the AFDC
program, ORR could also disallow for such errors.
ORR cited as its primary authority for the disallowance, and we
accepted,
its Action Transmittal requiring eligibility reports and
determinations "at
least as frequently as for AFDC recipients."
SRS-AT-76-160, October 22,
1976. ORR has not pointed to any later
action transmittal or other
official issuance which required eligibility
reports and determinations more
frequently than AFDC in either the pre-
or post-OBRA periods. Thus,
during the pre-OBRA period, the frequency
of reporting required in AFDC
(i.e., monthly reporting) also applied to
the RRP and payments which were not
supported by a monthly report were
not allowable.
During the post-OBRA period, AFDC policy did not treat a payment which
was
not supported by a monthly report as not allowable. Such payments
were
errors "for management information purposes only" and were "not
included in
computations of the payment error rates." See Background
above at p.
2. Thus, in AFDC, the State was not required to document
eligibility on
a monthly basis in order to avoid a disallowance.
ORR described its 1976 Action Transmittal as interpreting the intent
of
Congress and the Secretary to make the eligibility requirements for
the
Refugee Resettlement program "reflect as much as possible
the
eligibility requirements for the . . . AFDC program." ORR December
1985
submission, p. 19. The application of the AFDC waiver to the RRP
is
consistent with this intent. Since the program requirements for
RRP
reflect those of AFDC, ORR could not validly disallow based solely
on
lack of a monthly report during the post-OBRA period.
ORR has pointed out that in our Partial Decision in this case we
stated
that the "RRP is not the AFDC program" in finding that ORR had
not
undertaken to set a tolerance level for payment errors. Decision
No.
816, p. 21. ORR argued that the AFDC waiver, like the tolerance
level,
was part of the AFDC Quality Control system and thus no more
applicable
to the RRP than a tolerance level.
We find ORR's analogy to be faulty. The Quality Control
system,
including the use of tolerance levels, is a means of computing
the
amount to be disallowed for certain types of errors. The AFDC
waiver
was not addressed to the computation of disallowances but rather to
the
recognition that orderly and reasonable implementation of the
monthly
reporting requirement under OBRA necessitated a temporary change in
the
way that the states were accountable for meeting that
requirement.
Neither party spoke to what similarities or differences there
may have
been between AFDC and RRP in the implementation of monthly
reporting
under OBRA, but a State program official attested to difficulties
which
Los Angeles County had with the large influx of refugees.
These
difficulties caused ORR to give Los Angeles County a grace period
to
implement the monthly reporting system, but the State official said
the
grace period was "not long enough," even though the State agreed to
it.
Transcript of April 17-18, 1986 Hearing, p. 194. Whether or
not
California actually experienced the kinds of difficulties which led
to
the waiver would not affect our finding because the waiver applied
to
all states and its applicability to California did not depend on
a
specific finding of implementation difficulties in that State.
Also,
the similarities between AFDC and RRP would indicate that the
AFDC
waiver, like other AFDC eligibility rules, did apply to RRP.
The
granting of the waiver was premised on difficulties in implementing
a
monthly reporting requirement common to both programs, not on
some
characteristic of the QC system peculiar to AFDC. The argument
that the
existence of the AFDC QC program invalidates application of the
AFDC
waiver to the refugee program presents a "distinction without
a
difference," in that ORR failed to show that the QC program gave rise
to
the waiver, or that the QC program and the waiver were in any other
way
substantially linked. Indeed, nothing in the record suggests that
AFDC
would not have implemented the waiver even without the QC program;
the
policies are simply independent and each stands on its own feet.
Thus, for the post-OBRA period, a payment made in the absence of a
monthly
report to a recipient whose eligibility was otherwise
appropriately
documented could not be a reasonable basis for a
disallowance.
3. Treatment of substitute documentation
The 73 Los Angeles County cases consisted of 34 from the pre-OBRA part
of
the period covered by the audit and 39 from the post-OBRA part.
Based on our
conclusions in Part 1 of this Decision, the standard that
we applied to the
pre-OBRA cases is that the documentation had to be a
CA-7 or an acceptable
substitute dating the determination of eligibility
as of the end of the
budget month, i.e., a monthly report. Based on our
conclusions in Part
2 of this Decision, for post-OBRA cases, we did not
apply a monthly reporting
requirement, but we held the State to the
standard of documenting eligibility
with a CA-7 or acceptable substitute
showing a determination of eligibility
at least as frequently as was
required in the AFDC program during that
period.
The State offered proof of the eligibility of the recipients in the
Los
Angeles County cases by the use of documents other than
CA-7's.
Although ORR agreed, for the purpose of this case, to consider
certain
types of documents as acceptable substitutes for the CA-7, it
contended
that none of the documentation in the 73 contested cases was
sufficient
to meet all of the requirements of the retrospective budgeting
and
eligibility system. ORR agreed to accept only documents which met
these
requirements:
(1) The CA-7 [or substitute] forms must be signed
and
submitted during the first eleven (11) days of the
month
prior to the payment month (i.e., the report month).
(2) The document must contain income, resource
and
circumstance information for the entire budget month.
ORR August 1986 Post-Hearing Brief, pp. 10-11.
ORR accepted AFDC eligibility forms CA-2 and CA-20 and Department
of
Agriculture Food Stamp Application form DFA 285-A as containing
the
necessary income, resource, and circumstance information, but
contended
that in the disputed cases the CA-2s, CA-20s, and DFA 285-As did
not
meet the requirements of timeliness. Id. at 31. ORR contended
that
inter-county transfer forms (ICT's), "interview notes" and
budget
print-outs offered by the State did not provide the
information
necessary to determine eligibility. Id. at 31, 33.
In its letter accompanying the Partial Decision, the Board noted that
in
addition to documentation of individual cases, the State had
supported
its argument in favor of eligibility with uncontradicted evidence
that
(1) periodic redeterminations of eligibility were made; (2)
recipients
were required to report any change in circumstances; (3) the
contested
individuals did not have any earned income which was reported by
the
employer; and (4) these cases were a type in which there
ordinarily
would not be any change in circumstances affecting
eligibility. The
State contended that if any eligibility-related
changes had been
reported, it would have been required to institute a
recoupment action.
There were no recoupment actions in these cases, and the
State argued
from this, the above-mentioned evidence, and individual
documentation
that the recipients were eligible.
ORR argued that eligibility had to be based on other types of income
as
well as earned income. The State did not dispute this. ORR
also
contended that the absence of recoupment actions was not an
adequate
substitute for reports documenting eligibility.
We concluded in our Partial Decision (p. 15) that the State must
document
eligibility. This means that the State must do more than show
that the
recipients reported no changes giving rise to recoupment
actions. If
recoupment were an adequate means of ensuring that payments
were made only to
eligible recipients, there would have been no need for
periodic
redeterminations of eligibility.
We examined the State's documentation to determine the allowability
of
payments in both the pre-OBRA and post-OBRA parts of the audit
period.
The results are that we sustained ORR's determination in 33 of the
34
pre-OBRA cases and in four of the 39 post-OBRA cases, and reversed
ORR
in 36 cases. The outcome of each case and our reasons are
discussed
here and set out in Appendices A and B to this Decision.
The pre-OBRA cases were those with payment months during the period
April
- September 1981. To be acceptable, the substitute documentation
had to
contain the necessary income, resource, and circumstance
information as of
the end of the budget month for each of the payment
months in question.
We found that, in general, the ICT's, interview
notes and other notes in the
record of eligibility activity, and budget
print-outs did not contain the
necessary information by themselves to
document eligibility.
We reversed ORR in Case No. 6032435. A State official testified at
the
hearing in Docket No. 85-159 that this case was identical to one
which
ORR had allowed. Transcript of April 17, p. 143. In Case
No. 6032435,
the payment month was September 1981, which meant that
eligibility had
to be documented as of the end of July 1981. The file
contained a DFA
285-A signed by the recipient on July 28, 1981, and a CA-20
signed
August 22, 1981. The State official said that ORR told him that
a CA-20
in the month prior to the payment month was adequate documentation
and
that the case allowed by ORR had only such a CA-20 and did not have
the
DFA 285-A as in Case No. 6032435. Id. at 142-144. Thus, Case
No.
6032435 was even better documented than the case allowed by ORR.
The
Presiding Board Member specifically invited ORR to cross examine
the
witness as to any differences between the two cases that might
explain
why ORR accepted one and not the other, but ORR did not cross examine
on
this point, nor did ORR explain the different treatment adequately
in
its subsequent briefs and oral argument. Id. at 142. Also, ORR
did not
cite any documentation showing that the recipient was not
eligible. We
find that ORR erred in rejecting this case because it did
not dispute
testimony that it had accepted a case with similar or
lesser
documentation and the documentation shows eligibility as of July
28
corroborated by a CA-20 on August 22.
In 25 other pre-OBRA cases, the substitute CA-2's, CA-20's, and
DFA
285-A's were for months other than the budget month and there were
no
other documents showing the necessary income, resource, and
circumstance
information as of the end of the budget month. Thus,
eligibility was
not properly documented and we find ORR correctly determined
these
payments unallowable. See Appendix A for further details.
In eight other pre-OBRA cases (Nos. 5669444, 5710004, 5829381,
5952220,
5971403, 6032598, 6053712, and 6091933), there was an
otherwise
acceptable CA-2, CA-20, or DFA 285-A signed by the recipient or
the
eligibility worker, or the worker's supervisor, or all three, on a
date
during the budget month prior to the end of the month, and no
other
documents showing the necessary income, resource, and
circumstance
information as of the end of the budget month. Thus,
eligibility was
not properly documented and we find ORR correctly determined
these
payments unallowable. See Appendix A for further details.
The post-OBRA cases were the ones with payment months during the
period
October 1, 1981 - September 30, 1982. As with the pre-OBRA
cases, we
conclude that the substitute documentation had to contain the
necessary
income, resource, and circumstance information as of a certain
date.
Because the monthly reporting requirement as a basis for a
disallowance
was waived for the AFDC and the RRP programs, the information
need not
be within two months of the payment month. However, even
though
noncompliance with the monthly reporting requirement could not be
the
basis for a payment error, the requirement that eligibility
be
reconsidered or redetermined "not less frequently than every 6 months
in
AFDC" (and consequently in RRP) was not waived and thus
noncompliance
with this requirement could be the basis for a payment
error
disallowance. See 45 CFR 206.10(a)(9)(iii). Accordingly, in
post-OBRA
cases the documentation of eligibility had to be based on a CA-20
or a
DFA 285-A dated no more than six months prior to or six months
following
the budget month, or on a CA-2 dated six months prior to the
budget
month. Unlike the CA-2, the CA-20 and DFA 285-A review the
six
preceding months and thus are acceptable whether they precede or
follow
the budget month. The substitute documentation for the post-OBRA
cases
need not report information as of the end of the month, six months
prior
to or following the budget month, because the six-month regulation
does
not specify any particular time of the month.
In four of the post-OBRA cases (Nos. 5727578, 5855165, 5935421,
and
6046724), we found that the substitute documentation did not contain
the
necessary information as of six months prior to, or, where there was
a
CA-20 or a DFA 285-A, six months following the budget month. In
Case
No. 5935421, where the budget month was November 1981 and the
cited
documentation consisted of a CA-2 in September 1980 and a
narrative
entry indicating that redetermination of eligibility was completed
in
April 1982, we found that the CA-2 was too old, the narrative entry
did
not specify the information on which it was based, and the
narrative
entry was too far removed in time from the CA-2. Thus,
eligibility was
not properly documented and in this and the other three
cases, we find
ORR properly determined these payments unallowable. See
Appendix B for
further details.
We reversed ORR in 35 post-OBRA cases. In six of these, eligibility
is
documented by both a CA-20 and a DFA 285-A filed within six months
of
the budget month (Nos. 5924097, 5945126, 5960387, 5968246, 6030822,
and
6121103). In the first three cases, one of the eligibility
documents
precedes the budget month by no more than six months and the
other
eligibility document follows the budget month by no more than
six
months. In two other cases, both the CA-20 and DFA 285-A precede
the
budget month by no more than six months. In the sixth case, the
CA-20
and DFA 285-A were filed in the month following the budget month.
See
Appendix B for further details. Thus, in these six cases
uncontradicted
proof of eligibility is shown by two acceptable alternatives
to a CA-7
filed within six months of the budget month, as required.
In 16 of the remaining 29 cases, a CA-20 or a DFA 285-A documents
the
eligibility of the recipient within the six months preceding or the
six
months following the budget month (Nos. 5704753, 5795270,
5849371,
5855958, 5947823, 5948062, 5977374, 5993911, 6059456, 6078524,
6079409,
6108524, 6117120, 6118673, 6159933, and 6163926). In five of
these 16,
the eligibility of the recipient is also documented by a CA-2
filed
within the six months preceding the budget month (Nos. 6078524,
6079409,
6117120, 6159933, and 6163926). See Appendix B for further
details.
Thus, in these 16 cases, uncontradicted proof of eligibility is
shown by
at least one and sometimes two acceptable alternatives to a CA-7
filed
within six months of the budget month, as required.
In the remaining 13 cases, a CA-2 documents the eligibility of
the
recipient within the six months preceding the budget month
(Nos.
6035909, 6045106, 6052415, 6059841, 6079850, 6088971, 6089175,
6095603,
6115994, 6125798, 6126388, 6149979, and 6164767). See Appendix
B for
further details. Thus, in these 13 cases, uncontradicted proof
of
eligibility is shown by an acceptable alternative to a CA-7 filed
within
six months of the budget month, as required.
In the 35 cases just discussed, we find that ORR erred in rejecting
the
documentation offered and we reverse ORR's determination.
Conclusion
For the reasons stated above, we uphold ORR's determination
of
unallowability in 37 of the 73 sample cases and reverse it in 36 of
the
cases. ORR should recalculate the disallowance in light of
this
Decision and Partial Decision No. 816.
_______________________________ Judith A. Ballard
________________________________ Donald F. Garrett
________________________________ Norval D. (John) Settle Presiding
Board