Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Appellate Division
SUBJECT: New York State Department of Social Services
DATE: August 24, 1994
Docket No. A-94-174
Decision No. 1492
DECISION
The New York State Department of Social Services (New York) appealed a
determination by the Administration for Children and Families (ACF)
disallowing $6,749,602 in federal financial participation claimed for
the quarter ended December 31, 1993 under title IV-E of the Social
Security Act (Act) for foster care maintenance payments. The payments
were made on behalf of children living in foster care placements with a
relative. ACF found that some of the children had been living with a
relative for more than six months prior to the initiation of the court
proceedings that determined that the child should be removed from a
prior home because the child's continuance in that home would be
contrary to the child's welfare. ACF concluded that the children were
ineligible for IV-E funding because they were not removed from the
contrary- to-the-welfare home as the result of a judicial determination,
as required by section 472(a)(1) of the Act. This conclusion was based
on ACF's interpretation of section 472(a)(1) as requiring the child's
physical removal from the contrary-to-the welfare home within six months
prior to the initiation of court proceedings.
The Board addressed this issue in New York State Dept. of Social
Services, DAB No. 1485 (1994), which decided several appeals of
disallowances relating to prior periods. The Board there concluded that
ACF's interpretation of section 472(a)(1) was a reasonable
interpretation, if not the only reasonable interpretation, of the
language of the statute as a whole. In addition, the Board found that
ACF's interpretation was supported by the legislative history of the
title IV-E program and furthers the goals of the program. The Board
also rejected New York's argument that ACF's interpretation constituted
a legislative rule which was invalid because it was not issued pursuant
to notice and comment rulemaking under the Administrative Procedure Act,
finding that it was instead an interpretative rule of which New York had
timely, actual notice. Finally, the Board rejected New York's argument
that it was improper for ACF to disallow a portion of the claims without
first deferring or auditing them. However, the Board upheld the
disallowances in principle only since, pursuant to the parties'
agreement, the Board had not yet considered arguments raised by New York
concerning how ACF calculated the disallowance.
New York stated in its notice of appeal that the issues in the instant
case were the same as those presented in DAB No. 1485. The Board
subsequently advised the parties that it appeared appropriate to issue a
summary decision in this case which upholds the disallowance based on
the rationale in DAB No. 1485, and to thereafter consolidate this case
with the earlier appeals for purposes of consideration of any
calculation issues. Neither party objected to proceeding in this
manner.
Conclusion
Accordingly, based on the analysis in DAB No. 1485, we conclude that ACF
properly found ineligible for IV-E funding children who were not
physically removed from home within six months prior to the initiation
of court proceedings resulting in a judicial determination that
continuation in the home was contrary to the child's welfare. We
therefore uphold the disallowance in principle. The Board will schedule
further proceedings to consider New York's arguments concerning the
calculation of the disallowance if New York so requests within 30 days
of its receipt of this decision.
______________________ Judith A. Ballard
_______________________ Cecilia Sparks Ford
________________________ Donald F. Garrett
Presiding Board Member