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The following instructions and spreadsheets are to be used by ACF Regional Office staff for the purpose of calculating, or assisting in the calculation of, the disallowance of title IV-E funds identified as improper payments as a result of the on-site review of foster care case records. See attachments A - F.
The icons below will allow the user to work directly in the individual documents.
Attachment D: Workbook for Calculating the National Foster Care Error Rate for the Title IV-E Foster Care Program
These instructions are to be used in completing the Administrative Cost Disallowance Calculation Spreadsheet for the title IV-E foster care eligibility reviews on an individual case basis. In conjunction with the spreadsheet (attachment B), they provide guidance to Administration of Children and Families (ACF) Regional Office staff in calculating administrative cost disallowances on an individual case basis pursuant to findings resulting from initial primary, primary, and secondary reviews, as applicable. The disallowance calculation for a secondary review is also potentially subject to a further extrapolation procedure in accordance with applicable regulations. See attachment E for further information.
Attachment B is a protected Microsoft Excel file. It will allow entries only in the designated shaded areas. When entering the required information into the shaded areas, use the "TAB" key on your computer keyboard for easy access and input. The Federal fiscal year (FFY) of the period under review (PUR) determines the FFY of the Administrative Disallowance Calculation spreadsheet. Example: Review periods October 1, 2004, to March 31, 2005, and April 1, 2005, to September 30, 2005, are FFY 2005 and the spreadsheet with the file name "ADMDISALLOWCALFY05OMB" would be used. This calculation spreadsheet is updated annually in March to reflect new FFY Office of Management and Budget (OMB) deflator chart guidance, which is published at the end of January for the current FFY.
The ACF Regional Office must retain all documentation provided by the State for calculating maintenance and administrative cost disallowances as part of the review file. This includes the complete payment history for all sample cases.
STEPS TO COMPLETE CALCULATION SPREADSHEET
Enter the State's name, review period, and type of review (initial primary, primary, or secondary) at the top of the spreadsheet.
Step 1 - Determines the Current Year (CY) 12-month period for disallowance purposes. This includes the 6-month Adoption and Foster Care Analysis and Reporting System (AFCARS) review period (RP) and the 6-month AFCARS period immediately preceding the review period (Pre-RP). Quarters (Qtr) 3 and 4 will comprise the 6-month review period; and quarters 1 and 2 the 6 preceding months. For example, the review period is October 1, 2004, to March 31, 2005. Then, the quarters will be: Pre-RP Qtr 1 = April 1, 2004, to June 30, 2004; Pre-RP Qtr 2 = July 1, 2004, to September 30, 2004; RP Qtr 3 = October 1, 2004, to December 31, 2004; and RP Qtr 4 = January 1, 2005, to March 31, 2005.
Steps 2 and 3 - To obtain the data for Steps 2 and 3, refer to Part 1 of the four quarterly ACF-IV-E-1 foster care expenditure reports comprising the 12-month CY period defined in Step 1, or access the CY data through GATES.
Step 2 - Calculates the average monthly administrative cost for the CY defined in Step 1.
For Step 2(a), refer to column b (Federal Share) of the Current Quarter Expenditures on Part 1 of the Form ACF-IV-E-1 for Foster Care or GATES for each of the quarters in the CY. Enter the amounts on lines 5a. (Case Planning & Management) and 5e. (Other Administration). The formula will automatically add the quarters and divide by 12.
For Step 2(b), refer to column d (Federal Share) of the Prior Quarter Adjustments on Part 1 of the Form ACF-IV-E-1 for Foster Care or GATES for each of the quarters in the CY. Enter the amounts on lines 5a. (Case Planning & Management) and 5e. (Other Administration). The formula will automatically add the quarters and divide by 12.
The Average Monthly Admin Costs, 2(a) and Average Monthly Admin Adjustments, 2(b) also will be automatically added together.
Step 3 - Calculates the average monthly number of children for the CY 12-month period in Step 1. Refer to column b (Federal Share) of the Current Quarter Expenditures on Part 1 of the Form ACF-IV-E-1 for Foster Care or GATES for each of the quarters in the CY. Enter the numbers on line 4 (Avg Monthly No. of Children). The formula will automatically add the quarters and divide by 4.
Step 4 - For the average monthly administrative cost disallowance per child for the CY period, the formula will automatically divide the total of Step 2 by Step 3 (total average monthly administrative costs divided by average monthly number of children).
Step 5 - An administrative cost disallowance must be taken for each error case identified during the PUR beginning with the first month of ineligibility and continuing through the earlier date of the end of the on-site review or when the ineligibility ceases. (Exception: Per ACYF-CB-PI-02-08, States may continue to claim Federal financial participation (FFP) for the administrative costs associated with an otherwise title IV-E-eligible child placed in an unlicensed foster family home pending the issuance of a final rule.) The AFCARS period is based on paid claims during the month, not the month the service is provided. In months where no maintenance payment has been claimed, no administrative cost disallowance can be taken. Steps 5, 6, and 7 must be completed for each error case.
Determine the number of months for each error case in which administrative costs have been claimed. In most cases, this number will be the same as the number of months for which ineligible foster care maintenance payments were disallowed. Portions of a month should be rounded to the nearest month. Months with 15 or fewer days of ineligibility would be rounded down and months with 16 or greater days of ineligibility would be rounded up. (Example: 2 months and 15 days equals 2 months; 2 months and 16 days equals 3 months.)
In Step 5(a), enter the sample eligibility case review number, the case record number, the start and ending dates for the period of ineligibility, and (optional) the error reason numbers from the On-Site Review Instrument (these numbers correspond with the item numbers in the instrument).
In Step 5(b), enter the number of months of ineligible maintenance payments, the number of months of ineligible administrative costs and reasons for any difference between the two figures.
Distribute the number of months of ineligible administrative costs in Step 5(b) across each of the relevant FFYs listed in Step 6 column titled # OF ERROR MONTHS PER YEAR. Repeat this Step for all ineligible years on each error case, beginning with the first month of ineligibility and continuing through the earlier date of the end of the on-site review or when the ineligibility ceases. The FFY is October 1 to September 30. Therefore, October 1, 2004, to September 30, 2005, is FFY 2005. For example, if the error case was ineligible 21 months from July 1, 2003, to March 31, 2005, the entry would be 6 months for October 1, 2004, to September 30, 2005 (FFY2005), 12 months for October 1, 2003, to September 30, 2004 (FFY 2004), and 3 months for October 1, 2002, to September 30, 2003 (FFY 2003).
Any improper payments made after the end of the on-site review, resulting from cases identified during the PUR, are unallowable. The State must return the Federal share of funds received (maintenance and administrative costs) by making the appropriate adjustments on their IV-E-1 report, and cease claiming costs until (and if) the cases are determined eligible. These post on-site review costs should be identified separately in the final report sent to the State agency.
Step 6 - In determining the Total Adjusted Administrative Cost Disallowance for Error Cases per CY, columns FEDERAL FISCAL YEAR (FFY), OMB DEFLATOR CHART %, ADMIN COSTS DISALLOWANCE DEFLATION %, and # OF ERROR MONTHS PER YEAR will already be populated for all years identified in Step 5(b). Columns # MONTHS X (STEP 4 X % DEFLATION) = and TOTAL CUMULATIVE DISALLOW will automatically be calculated. The current FFY OMB Deflator Chart % will serve as the basis for deflating the administrative costs for each preceding 12-month period. The formula will divide each OMB Deflator Chart % by the current FFY OMB Deflator Chart % to obtain the Administrative Costs Disallowance Deflation % (Example for FFY 2004: 1.1180/1.1588 = 0.9648). The number of error months for the year will automatically be multiplied by the average monthly administrative cost per child (Step 4) and the Admin Costs % of Deflation, then entered in the # Months X (Step 4 Results X %) column. The formula also will automatically add the year total to the cumulative figure above in the Total Cumulative Disallow column. The last numeric figure in the TOTAL CUMULATIVE DISALLOW column is your Total Federal Share Adjusted Administrative Cost Disallowance for this error case. This is the amount of Foster Care Administrative Costs the ACF will disallow for this error case.
The OMB Deflator Chart source is located on the OMB portion of the White House Web site (http://www.whitehouse.gov/omb/budget/fy2006/pdf/hist.pdf) under the Historical Tables Budget of US Government for the Federal Fiscal Year (FFY) 2006 in Section 10, the Gross Domestic Product and Implicit Outlay Deflators, on Table 10.1, the Historical Tables 1940-2010 (where FFY 2000 equals 1.000), in the Column Other Grants (Federal Grants to State and Local Government). The FFY 2006 table contains the FFY 2004 actual amount and the FFY 2005 current estimate.
Step 7 - Enter the File Name. Save the file as "Adm Disallow Cal" plus the two letters of "State's Name," the "Sample Case Number" and ".xls" to your disk or CD. Print the spreadsheet for a hard copy record. This will minimize the amount of effort needed to make corrections, and reduce the amount of input time required.
Steps 5, 6, and 7 - Page 2 of the spreadsheet will need to be repeated for every error case.
MAINTENANCE PAYMENT DISALLOWANCES
These instructions provide guidance to the Administration of Children and Families (ACF) Regional Office in calculating maintenance payment disallowances for the title IV-E foster care eligibility reviews on an individual case basis pursuant to findings resulting from initial primary, primary, and secondary reviews, as applicable. A sample case must have at least one title IV-E maintenance payment during the period under review (PUR) in order to be included in the eligibility review. A maintenance payment disallowance must be taken for each error case identified during the PUR and for improper payments on non-error cases, beginning with the first month of ineligibility and continuing through the earlier of the end of the service month that immediately precedes the month of the on-site review or when the ineligibility ceases. The disallowance amounts are obtained from the payment history provided by the State for all sample cases for the applicable period(s) of ineligibility.
Any ineligible or improper payments made after the end of the on-site review, resulting from cases identified during the PUR, are unallowable. The State must return the Federal share of funds received (maintenance and administrative costs) by making the appropriate adjustments on their IV-E-1 report, and cease claiming cost until (and if) the cases are determined eligible. These post on-site review costs should be identified separately in the final report letter to the State.
States must provide a full payment history for each sample case with all necessary identifying information to the ACF in an electronic format (where possible) at least 30 days before the on-site review. If a State does not have the actual documentation or records of the title IV-E payments for early periods, then estimated amounts must be provided to the satisfaction of the ACF. The ACF is required by regulations to recover payment and related administrative costs for all periods of time that an error case is determined to be ineligible. Disallowances for States determined to be non-compliant in a secondary review also will be calculated through an extrapolation procedure applied to the period under review in accordance with applicable regulations.
The Regional Office must retain all documentation provided by the State for calculating maintenance and administrative cost disallowances as part of the review file. This includes the complete payment history for all sample cases.
The completion of Attachment D, using the Federal Financial Participation (FFP) dollar amount, will provide the information for calculating maintenance payment disallowances and the data needed to compute the national foster care error rate (refer to the below instructions for guidance).
NATIONAL FOSTER CARE ERROR RATE
The Improper Payments Information Act (IPIA) requires Federal agencies to address improper payments in all programs. In compliance with the IPIA and the Office of Management and Budget (OMB), the ACF must calculate a national foster care error rate for the title IV-E Foster Care Program on an annual basis.
The instructions provided in attachment C are to be used in completing the Workbook for Calculating the National Foster Care Error Rate (attachment D) for the PUR on all title IV-E foster care eligibility reviews. In conjunction with the workbook, the instructions provide guidance to the ACF Regional Office on entering the required FFP information on maintenance payments on every sample case for initial primary, primary, and secondary reviews, as applicable.
For a review case to count as a sample case, it must have at least one IV-E maintenance payment during the PUR. All sample cases must be listed on the case sheets whether the sample is eligible or an error.
The completion of attachment D serves several purposes by providing the information needed for the National Foster Care Error Rate, by calculating the maintenance payment disallowances on compliant initial primary, primary, and secondary reviews, and by providing the required data to the ACF statistician for the extrapolation of non-compliant secondary reviews.
The workbook contains a summary sheet and eight case sheets. The summary sheet automatically lists the totals of the each case sheet. The case sheets are numbered 1-25, 26-50, 51-75, 76-100, 101-125, 126-150, 151-175, and 176-200 to accommodate primary and secondary reviews and any over-sampling required. The sample case's information is directly input on the case sheets.
Attachment D is a protected Microsoft Excel file. It will allow entries only in the designated shaded areas. When entering the required information into the shaded areas, use the "TAB" key on your computer keyboard for easy access and input.
STEPS TO COMPLETE THE WORKBOOK
SUMMARY SHEET
Enter the State's name, the period under review (PUR), the State's Federal Medicaid Assistance Percentage (FMAP) Rate for the fiscal year in which the PUR is located, the type of review (initial primary, primary, or secondary), and the date of completion or the latest adjustment at the top of the worksheet. This information MUST be input on the Summary Sheet in the shaded areas to automatically populate all the case sheets. The FMAP Rate for the PUR fiscal year MUST be entered in a decimal format for the formulas to calculate the Federal Financial Participation (FFP) of the disallowance correctly. Example: The FMAP Rate 75.19% is entered 0.7519.
The summary sheet consists of cell formulas and links to the "Totals" line from each of the eight case sheets (example Sheet 1-25 Cases). When the sample case's data is entered on the appropriate case sheet, the columns of the summary sheet are automatically populated.
CASE SHEETS
The Item # column displays the count of the case in the review sample.
Step 1 - Enter the sample number of the case in the Sample Number column.
Step 2 - Enter the case status in the Case Status column. If the sample case is eligible, input a "P" for "pass" and an "F" for "failed" on error cases.
Step 3 - For the Period under Review, Total Monthly FFP Maintenance Payments on All Cases columns, enter by month the total computable maintenance payments amounts on all sample cases. The Total Dollars Claimed column will automatically add the 6 months' figures together for each case. The FFP Dollars Claimed column will automatically multiply the FMAP Rate by the Total Dollars Claimed column for each case to provide the 6-month FFP dollar claimed amount.
Step 4 - For the Period under Review, Ineligible and Improper Monthly Maintenance Payments columns, enter by month the total computable maintenance payments amounts on sample cases (as determined from the eligibility review of each case) that are ineligible payments on error cases and improper payments on non-error cases. The total ineligible amounts (hereafter referred to as "error dollars") apply only to the 6-month AFCARS period from which the sample was selected. The Total Error Dollars column will automatically add the 6 months' figures together on each case. The FFP Error Dollars column will automatically multiply the FMAP Rate by the Total Error Dollars column for each case to provide the 6-month FFP error dollar amount.
Step 5 - Enter the number of months that an administrative costs disallowance is required in the Error Cases Number of Ineligible Months of Administrative Costs column. Generally, the number of months that maintenance payment claimed will be the same as the number of ineligible months of administrative costs. Exception: Per ACYF-CB-PI-02-08, States may continue to claim FFP for the administrative costs associated with an otherwise title IV-E-eligible child placed in an unlicensed foster family home (pending the issuance of a final rule). Therefore, in this instance, the number of ineligible administrative costs months would be less the number of months maintenance payment claimed.The totals of all columns will automatically be added together and carried forward to the summary sheet.
Repeat Steps 1 through 3 for each of the sample cases in the eligibility review, as well as steps 4 and 5 for those sample cases that include an ineligible or improper payment.
Attachment D: Workbook for Calculating the National Foster Care Error Rate for the Title IV-E Foster Care Program
These instructions are to be used for calculating the extrapolated administrative costs and maintenance payment disallowances for the title IV-E foster care eligibility reviews for States found to be in non-compliance during a secondary review. This attachment provides guidance to the Administration for Children and Families (ACF) Regional Office on the information required by the ACF statistician to calculate these disallowances on the basis of extrapolation from the sample to the universe of claims paid during the duration of the Adoption and Foster Care Analysis Reporting System (AFCARS) reporting period. The extrapolated disallowances are based only on the 6 months of the period under review (PUR). The universe of claims is the Federal Financial Participation (FFP) share of allowable title IV-E foster care maintenance payments and administrative costs paid during the 6-month PUR.
For a review case to count as a sample case, the case must have at least one maintenance payment during the PUR. For those cases that were determined to be in error during the 6-month review period and also were ineligible before or after the PUR (until the end of the service month that immediately precedes the month of the on-site review), disallowances for the prior and post PUR will follow the methods outlined in attachments A, B, and C. Separate FFP disallowances for maintenance payments and administrative costs will be determined.
Any costs incurred for error cases made after the end of the on-site review, resulting from cases identified during the PUR, are unallowable. The State must return the Federal share of funds received (maintenance payments and administrative costs) by making the appropriate adjustments on their IV-E-1 report, and cease claiming costs until (and if) the cases are determined eligible. These post-review costs should be identified separately in the final report sent to the State agency.
The Regional Office must retain all documentation provided by the State for calculating maintenance payments and administrative cost disallowances as part of the review file. This includes the complete payment history for all sample cases.
Instructions for Extrapolated Maintenance Payments Disallowance (All calculations are computed using Microsoft Excel.)
Step 1 obtains the average Federal Financial Participation (FFP) maintenance payments ineligible amount (hereafter referred to as "error dollars") per case. The Regional Office must provide to the ACF statistician the total amount of FFP dollars for each case in the sample, on a monthly basis, from the 6-month State payment history. The statistician also requires the FFP dollars (as determined from the eligibility review of each case), on a monthly basis, for the ineligible amounts on error cases and for the improper payment amounts on non-error cases. The total error dollars apply only to the 6-month AFCARS period from which the sample was selected. The completion of attachment D, using the FFP dollar amount, will provide the information required for this step and the data needed to compute the national foster care error rate. (Refer to attachment C for guidance.) The average error dollars per case reviewed will be computed from this information. (Example: FFP total error dollars of $132,222.12 divided by 150 cases equals $881.48 average error dollars per case.)
Step 2 calculates the sample standard deviation of the FFP error dollars, which is determined from each of the sample cases error dollar amounts in Step 1. (From the Step 1 data, Excel's STDEV function computed a value of $1,942.49.)
Step 3 computes the standard error of the mean FFP error dollars by dividing the sample standard deviation of the FFP error dollars (Step 2) by the square root of the sample size, which will customarily be 150. (Example: $1,942.49 divided by ?150 is $158.57.)
Step 4 determines the sampling error, which is computed by multiplying the standard error of the mean (Step 3) by 1.645, the z-value for a 90 percent confidence interval estimate for the population mean. (Example: $158.57 multiplied by 1.645 is $260.85.) This z-value is used because the extrapolated disallowance is the lower limit of the 90 percent confidence interval estimate for the population total error dollars.
Step 5 computes the lower limit of the 90 percent confidence interval for the average FFP error dollars by subtracting the sampling error (Step 4) from the average FFP error dollars (Step 1). (Example: $881.48 minus $260.85 yields $620.63.)
Step 6 determines the total number of cases receiving at least one title IV-E maintenance payment during the 6-month AFCARS sampling period. This is done by counting all of the cases (not just the sample size) in the State's AFCARS submission that are coded "1" for data element 59. This element denotes cases where a title IV-E foster care payment is being paid on behalf of the child. If necessary, this total will be adjusted downward according to the number of erroneous codings, where a "1" was coded instead of a "0" by the State in its AFCARS submission for the PUR. (Example: the total number of title IV-E cases was estimated by multiplying 5,928 cases counted with a "1" coded for AFCARS data element 59 by 150, divided by 186 (reason - it took 186 cases coded as a "1" to yield a 150 actual cases coded as a "1"). Result: 5,928 cases multiplied by 150 equals 8,892, then divide this total by 186 which equals 4,781 cases.
Step 7 calculates the lower limit of the 90 percent confidence interval for the total FFP error dollars by multiplying the total from Step 6 (4,781) by the lower limit of the 90 percent confidence interval estimate for the average FFP error dollars (Step 5). (Example: 4,781 cases multiplied by $620.63 is $2,967,232.) This lower limit represents the extrapolated disallowance for the total FFP error dollars.
The ACF, therefore, can conclude that there is a 95 percent probability that the total FFP administrative cost error dollars are at least this amount, which is a rather conservative estimate.
Instructions for Extrapolated Administrative Cost Disallowance (All calculations are computed using Microsoft Excel.)
Step 1 obtains the average number of ineligible months per case. The Regional Office must provide to the ACF statistician, for the 6-month AFCARS PUR, the total number of ineligible months of administrative costs for each error case determined from the applicable Title IV-E Foster Care Eligibility Review Guide checklist. The completion of attachment D, Error Cases Number of Ineligible Months of Administrative Costs column, will provide the information required for this step and the data needed to compute the national foster care error rate. (Refer to attachment C for guidance.) The total figure is divided by the sample size (usually 150 cases) to yield the average number of ineligible months per case. (Example: 293 total months divided by 150 cases equals 1.95, the average number of ineligible months per case.)
Step 2 calculates the sample standard deviation of ineligible months, which is determined from each of the 150 ineligible months count in Step 1. (From the Step 1 data, Excel's STDEV function computed a value of 2.69.)
Step 3 computes the standard error of the mean number of ineligible months by dividing the sample standard deviation of the number of ineligible months (Step 2) by the square root of the sample size, which will customarily be 150. (Example: 2.69 divided by ?150 is 0.2196.)
Step 4 determines the sampling error, which is computed by multiplying the standard error of the mean (Step 3) by 1.645, the z-value for a 90 percent confidence interval estimate for the population mean. (Example: 0.2196 multiplied by 1.645 equals 0.36.) This z-value is used because the extrapolated disallowance is the lower limit of the 90 percent confidence interval estimate for the population total error months.
Step 5 computes the lower limit of the 90 percent confidence interval for the average number of ineligibility months by subtracting the sampling error (Step 4) from the average number of ineligibility months (Step 1). (Example: 1.95 minus 0.36 equals 1.59.)
Step 6 determines the total number of cases receiving at least one title IV-E maintenance payment during the 6-month AFCARS sampling period. This is done by counting all of the cases (not just the sample size) in the State's AFCARS submission that are coded "1" for data element 59. This element denotes cases where a title IV-E foster care payment is being paid on behalf of the child. If necessary, this total will be adjusted downward according to the number of erroneous codings, where a "1" was coded instead of a "0" by the State in its AFCARS submission for the PUR. (Example: the total number of title IV-E cases was estimated by multiplying 5,928 cases counted with a "1" coded for AFCARS data element 59 by 150, divided by 186 (reason - it took 186 cases coded as a ""1" to yield a 150 actual cases coded as a "1"). Result: 5,928 cases multiplied by 150 equals 8,892, then divide this total by 186 which equals 4,781 cases.
Step 7 calculates the lower limit of the 90 percent confidence interval for the total number of ineligibility months by multiplying the total from Step 6 (4,781 cases) by the lower limit of the 90 percent confidence interval estimate for the average number of ineligibility months (Step 5). (Example: 4,781 cases multiplied by 1.59 equal 7,602 months.)
Step 8 computes a weighted monthly administrative cost. The Regional Office should obtain from GATES or the ACFY-IV-E-1 form (Part 1) the following data for the two quarters comprising the 6-month AFCARS sampling period and the previous six quarters and provide this information to the ACF statistician by quarter for each of the eight quarters. (The completion of attachment F, using the FFP dollar amount, will provide the information required for this step.)
The FFP administrative costs reported in column (b) Federal Share of the Current Quarter Expenditures the amounts on lines 5a. (Case Planning & Management) and 5e. (Other Administration).
The FFP administrative costs reported in column (d) Federal Share of the Prior Quarter Adjustments the amounts listed on lines 5a. (Case Planning & Management) and 5e. (Other Administration).
The average monthly number of children from column (b) Federal Share of the Current Quarter Expenditures on line 4 (Avg Monthly No. of Children).
The weighted average monthly administrative cost is calculated by the ACF statistician using a Microsoft Excel spreadsheet. (The yield for this example is $310.51.)
Step 9 calculates the lower limit of the 90 percent confidence interval for the total FFP administrative cost error dollars by multiplying the lower limit of the 90 percent confidence interval for the total number of ineligibility months (Step 7) by the weighted monthly administrative cost computed in Step 8. (Example: 7,602 months multiplied by $310.51 yields a total of $2,360,497.) This computation provides the extrapolated disallowance for the total FFP administrative cost error dollars.
The ACF, therefore, can conclude that there is a 95 percent probability that the total FFP administrative cost error dollars are at least this amount, which is a rather conservative estimate.
