California Department of Social Services, DAB No. 868 (1987)

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