DEPARTMENTAL GRANT APPEALS BOARD
Department of Health and Human Services
SUBJECT: Ohio Department of Human Services
Docket No. 86-65
Audit Control No. 05-50274
Decision No. 858
DATE: April 8, 1987
DECISION
The Ohio Department of Human Services (State) appealed a deter-
mination
by the Office of Human Development Services (Agency),
disallowing
federal financial participation (FFP) in the amount of $772,758
claimed
under the Aid to Families with Dependent Children-Foster Care
(AFDC-FC)
program funded by Title IV-A of the Social Security Act
(Act). 1/
Based on an audit for the period July 1, 1979 through
September 30,
1982, the Agency found that the State improperly claimed
$761,013 FFP
for institutional foster care costs not documented as aid or
maintenance
expenses. The Agency found that, instead, the State claimed
social
services costs unallowable under Title IV-A. In addition, the
auditors
found that of the $761,013 claimed under Title IV-A, $253,643 had
also
been claimed as social services costs under Title XX. Finally,
the
Agency found that the State had claimed $11,745 FFP in AFDC-FC costs
for
children in unlicensed institutions.
The major issues raised by this appeal are (1) whether the costs which
the
State claimed under section 403(a)(1) of the Act as maintenance
costs, were,
in fact, social services costs unallowable under section
403(a)(3) of the
Act; (2) whether the 403(a)(3) prohibition against
federal reimbursement of
social services costs can be applied to claims
made under section 403(a)(1);
(3) whether the State may make duplicate
claims for costs under both Title
IV-A and Title XX; (4) whether the
Agency should be estopped from taking the
disallowance by its approval
of an amendment to the state plan which approved
"pass-through" costs;
and (5) whether the State made claims for FFP for
children in
institutions that were unlicensed.
Based on the reasons stated below, we conclude that the State
claimed
social services costs under section 403(a)(1). Moreover, we
conclude
that the claiming bar at section 403(a)(3) applies to these claims,
thus
rendering the social services costs unallowable under Title
IV-A.
However, we also conclude that it is likely that the State's claim
also
included some allowable maintenance costs. We uphold the
entire
$761,013 disallowance, subject to a possible reduction, based on
the
Agency's finding that it could not separate the allowable
maintenance
costs from the unallowable social services costs. We allow
the State an
opportunity to submit to the Agency its proposed method for
determining
its allowable Title IV-A maintenance costs claim within 30 days
of the
date of this decision. Further, we conclude that the State could
not
properly make duplicate claims under Title IV-A and Title XX. To
the
extent that the State makes a showing to the Agency that any of
these
costs are maintenance costs under Title IV-A, the State must reduce
any
Title XX claim made for those costs. We also conclude that the
State
has not shown that the Agency should be estopped from taking
a
disallowance. Finally, we conclude that the State has provided
evidence
of certification to show that one institution was licensed during
the
disallowance period. Therefore, we reverse, in part, the
disallowance
for unlicensed institutions.
I. Applicable Authority
Prior to October 1975, social services for AFDC-FC children were
claimed
by states as administrative costs under Title IV-A. Effective October
1,
1975, Pub. L. 93-647 established a new Title XX for financing
social
services for low-income children and families. Title IV-A
retained as
its primary purpose the provision of maintenance payments for
families
with dependent children. Pub. L. 93-647 included a provision
amending
section 403(a)(3) (the authority for paying states for
administrative
expenditures under IV-A) to prohibit FFP under Title IV-A
for
expenditures made in connection with any of the Title XX
services
described in the statutory provision defining the scope of Title
XX,
section 2002(a)(1) of the Act. 2/ Pub. L. 93-647 also imposed
a cap on
the amount of funding available to each state under Title XX.
During
the disallowance period, section 408(b) of the Act provided that aid
to
families with dependent children included payments for foster
care
provided in the foster family home of an individual or in a child
care
institution. The implementing regulation is found at 45 CFR
233.110.
Historically, the payments for aid to needy families with
children
described at section 403(a)(1) of the Act have been referred to
as
"maintenance payments." The pertinent section of 403(a)(1) provides,
in
part:
From the sums appropriated therefor, the
Secretary of the Treasury
shall pay to each
State which has an approved plan for aid and
services to needy families with children . . . (1) . . . an
amount
equal to the sum of the following
proportions of the total amounts
expended
during such quarter as aid to families with
dependent
children under the State plan. . .
.
Section 403(a)(1)(A)(i) provides that such aid be in the form of
money
payments.
Prior to, and during, the disallowance period, the Agency issued
Action
Transmittals (AT) for the purpose of clarifying the statute
and
implementing regulation concerning allowable and unallowable costs
under
Title IV-A, AFDC-FC. Of particular relevance to this case are
two
action transmittals, AT 78-21 and AT 81-18.
Action Transmittal 78-21, issued May 19, 1978, provides, in part:
Allowable costs for FFP under Title IV-A
include the costs of
personnel such as child
care staff, social workers, maintenance
and
food preparation workers, and other institution staff
whose
work assignments include functions that
keep the AFDC foster care
program operating on
a day-to-day basis, or that meet the child's
need for parenting, supervision, direction, protection,
emotional
support, and care. . . .
However, only those administrative and
operational costs which are attributed to and support the care
and
maintenance of a child in AFDC-FC are
allowable under the statute
and
regulation.
Action Transmittal 81-18, issued on June 24, 1981, provides, in part:
FFP under Title IV-A for AFDC-FC is limited to
the provision of
foster care maintenance
payments and related activities, e.g.,
determining initial and continuing eligibility, rate setting,
and
maintaining the case in payment
status. Section 403(a)(3), as
amended by
P.L. 93-647, prohibits FFP under title IV-A for
social
services described in Section 408(f),
including placing the child,
the cost of
developing, reviewing, supervising and monitoring
a
plan of care, as well as carrying out the
services provided for in
that plan of care
(e.g., drug and alcohol abuse counseling,
homemaker and chore services) and recruitment of foster
family
homes and institutions.
II. Social Services Costs
The Disallowance and Parties' Arguments
The Department of Health and Human Services (HHS) Office of
Inspector
General (OIG) conducted an audit of costs claimed by the State
for
institutional foster care of dependent children during the audit
period
noted above. Under this category of costs, the auditors
recommended a
disallowance of $1,381,148 ($761,013 FFP) because these costs
were not
documented by the State to be for aid or maintenance expenses.
The
audit report, at pages 7 through 10, provides a complete explanation
of
how the auditors reached the disallowance amount. However, the
Agency
in its brief provides a summary:
First, the auditors were auditing only
pass-through costs, i.e.,
costs of
institutional foster care for which the
counties
contracted to pay to institutions on
behalf of individual
children, minus the basic
state AFDC standard of need level. The
state negotiated with HHS to [claim FFP for pass-through
costs]
under Title IV-A as a foster care
maintenance payment. . . .
However, when
the auditors reviewed actual documentation on
the
pass-through costs, they concluded that a
substantial portion, if
not all, of the
pass-through costs constituted social services
costs, not costs for room, board, food, clothing and the
like,
i.e., they were not aid or maintenance
costs. To reach that
conclusion, the
auditors reviewed several sources of
documentation, one of which was contracts for services
between
some of the foster care institutions
and their respective counties
which provided
for two rates -- one for room and board and a
second, all-inclusive rate for social services, therapy, and
room
and board. The auditors for such
cases subtracted the room and
board rate from
the all-inclusive rate to obtain a figure for
social services costs. Agency brief, p. 3, n. 5.
Additionally, the auditors noted that:
Our detailed examination of . . . reported
payments by 10 CDHSs
(County Departments of
Human Services) to 10 institutions,
disclosed
. . . a duplicate claim of $460,332 ($253,643 FFP)
under
the Title XX Social Services
program. Audit report, p. 10.
The State made a number of arguments as to why this portion of
the
disallowance should be reversed. However, all the arguments focused
on
one central theme. The State maintained that the costs disallowed
by
the auditors were not social services costs governed by
section
403(a)(3) of the Act, but that the costs were actually maintenance
costs
claimed under section 403(a)(1) and as such are not barred by
the
statute. Further, the State appeared to argue that the guidance in
the
Action Transmittals only interpreted the definition of social
services
costs under section 403(a)(3) and did not apply to maintenance
costs
claimed under section 403(a)(1).
Further, the State maintained that the Board's previous decisions
dealing
with Title IV-A disallowances are not applicable to this case
because the
previous disallowances were made under section 403(a)(3).
3/ The State
argued that the Board in the previous decisions did not
even discuss
maintenance costs under section 403(a)(1). Moreover, to
support its
position that the disallowed costs were for maintenance
costs rather than
social services, the State provided an affidavit from
a management analyst in
the
Division of Family and Children's Services. State's appeal
file,
Exhibit E. 4/
Additionally, the State argued that the Board should apply the doctrine
of
equitable estoppel in this case. 5/ The State argued that
the
Agency approved both an amendment to its state plan, which
added
"pass-through" costs, and its cost reports for child care
institutions.
Moreover, the State argued that given
the Agency's unchanging policy in its Action Transmittals and the
clear
language of section 403(a)(3), which the State interprets as saying
only
costs claimed as social services are unallowable, the State had
no
reason to believe that HHS would later disallow costs claimed
as
maintenance. Finally, the State argued that it relied on
the
transmittals and the approval of its state plan to its detriment.
The
State argued that the present disallowance and the possibility of
future
disallowances represent a substantial money amount.
The Agency argued that the State has not presented any documen- tation
for
its contention that the costs claimed were in fact maintenance
costs.
The Agency maintained that the mere fact that the costs were
claimed under
section 403(a)(1) does not make them maintenance costs.
Moreover, the Agency
argued that the aid or maintenance required by
section 403(a)(1) can only be
cash payments, and that the State's claim
that services can be "maintenance
services" improperly confuses "aid"
and "services" in a manner not permitted
by the Act, the regulations, or
legislative history. The Agency pointed
out that social services costs,
unallowable under Title IV-A after 1975, were
always claimed as costs of
administration of the state plan, not as a
component of a maintenance
payment.
Further, the Agency argued that the Board's decisions, as noted above,
are
applicable to this case. The Agency maintained that the
Board's
decisions make clear that Public Law 96-272 did not leave it
any
discretion but instead mandated disallowances in cases such as this
one.
Although the Agency admitted that one distinction between the
previous
decisions and the present case is that this case involves
institutional
foster care, it argued that both section 408(b)(2) of the
Act and 45
CFR 233.110(a)(5) provide that, for children in an institution,
only the
same costs as for a foster child in a private foster home would
be
allowed. The Agency conceded that physical care of a child is
an
allowable cost under Title IV-A, even if performed by a social
worker.
It argued, however, that social services performed by that same
worker
are not allowable, and that the salaries of persons who performed
both
maintenance and service activities must therefore be allocated,
which
the State did not even try to do in this case. 45 CFR 232.30
(1976).
Finally, the Agency argued that it should not be equitably
estopped.
The Agency maintained that the Board implicitly rejected a
nearly
identical argument in New York State Department of Social
Services,
Decision No. 449, July 29, 1983. The Agency argued that
approval of
either a state plan or a cost allocation plan allocating costs
(now
being disallowed) to Title IV-A does not mean such costs are
allowable,
only that they are properly allocated.
Analysis
For the period covered by this disallowance, maintenance
payments
described at section 403(a)(1) of the Act are allowable costs
under
Title IV-A of the Act, and social services costs described at
section
403(a)(3) of the Act are unallowable Title IV-A costs. However,
the
State asserted that because it claimed the costs at issue under
section
403(a)(1) as maintenance payments, the claiming bar at section
403(a)(3)
does not apply to these claims. 6/ The Board has
rejected this
argument in a previous decision, and we affirm that decision in
this
case. In New York Department of Social Services, Decision No.
716,
January 7, 1986, we considered the question of whether the claiming
bar
at section 403(a)(3) of the Act could apply to a State's claims
even
though they were submitted under section 403(a)(1). In New York,
at p.
7, we concluded that interpreting the bar to apply regardless of how
a
state characterizes its claim is consistent with the legislative
history
of Public Law 93-647, which added the bar. We noted that the
House
Report which accompanied Pub. L. 93-647 provided:
Section 3(a)(3) amends section 403(a)(3) of
the Act to eliminate
federal matching under
part A of Title IV for expenditures for the
provision of services other than services required to be
included
in the State's WIN program and
services provided as emergency
assistance to
needy families. H.R. REP. No. 1490, 93rd Cong.,
2nd
Sess. 19 (1974). (emphasis
added)
Similarly, in this case, based on our past analyses of this issue and
our
review of the arguments in this appeal, we conclude that the
claiming bar of
403(a)(3) applied to the social services costs
regardless of how the State
characterized them when it submitted its
claims. To interpret the
claiming bar any other way would allow the
State to circumvent the intent of
the statute.
Further, we find that given the nature of the "pass-through"
claiming
process, as described in the audit report, supra, we are unable
to
determine what portion of the disallowed costs might be for
allowable
maintenance payments. In prior decisions, the Board has found
that a
grantee has the burden of documenting the allowability of its
claim.
See Indiana Department of Public Welfare, Decision No. 772,
August 7,
1986, and the decisions cited therein. Further, the Board has
found
that in order to claim costs under a grant program, the grantee
must
show that the costs are necessary and reasonable for the
administration
of the grant program and are allocable to the program.
Grantees are
required to make and retain records of expenditures, and support
these
records with source documentation. New York City Human
Resources
Administration, Decision No. 641, April 17, 1985.
The State has not in this case complied with the
documentation
requirement. However, since allowable maintenance costs
encompass more
that the costs of room and board, it is likely that the
disallowed
"pass-through" costs included both allowable maintenance costs
and
unallowable social services costs. 7/ However, the State did
not
provide the documentation to distinguish between the two. The
auditors
stated:
Visits to the counties disclosed that the
institutions and [the
State's county offices]
generally negotiate a contract for
comprehensive services with a break- out of charges by
service
codes. [State] Title XX
procedures provide service codes for an
all-
inclusive rate for social services including therapy and
room
and board, and a lower rate for social
services including therapy
but excluding room
and board. The difference between the
rates
represents the charge for foster care
maintenance, which is the
amount allowable
under Title IV-A FC. The institutions bill
the
[State's county offices] the negotiated
contract rates for all
services without regard
to the Federal program under which the
children are placed. The [county offices] then report the
total
payments made by the institutions on the
. . . report, rather than
only the maintenance
or foster care portion. We also found
that,
as a general rule, the [county offices]
did not maintain
accounting records to
identify payments by program. Audit
report,
p. 9.
Although the State provided one affidavit from one of its employees
(see
note 5, above), that affidavit only describes the State's policies;
it
does not provide the contemporaneous source documentation that the
Board
has held is required. See New York City Human Resources
Administration,
supra. Therefore, we uphold the Agency's
disallowance.
Furthermore, we reject the State's argument that since the Agency
approved
the amendment to its state plan which added "pass-through"
costs and the
State's cost reports for use by child care institutions,
all of the costs
claimed under the state plan are allowable. The State
made a conclusory
argument that the Agency should be estopped because
the Agency approved its
"state-plan." The State submitted a copy of an
amendment to its AFDC
State Plan, which approved the "pass-through"
concept. Additionally, the
State submitted blank copies of cost reports
that it provides to institutions
for allocation of costs. (State's
appeal file, Ex. B) The State has not
provided any evidence to show how
a general approval of an allowable
cost-charging concept could estop the
Agency from a disallowance in this
case. We have said that the Agency
must apply a policy where the
statute has mandated the result. New York
State Department of Social
Services, Decision No. 449, July 29, 1983.
Clearly, a state plan which
provided for claiming social services costs
under Title IV-A would be
contrary to the statute. Moreover, in any
event, we are not rejecting any
provision of the state plan which
provides for payment of maintenance costs
under Title IV-A. Instead, we
find that the State has not adequately
identified the allowable Title
IV-A maintenance costs, which would be
required by a valid state plan.
The approved State plan must be read together
with the applicable
statutory provision to authorize the "pass-through" costs
except to the
extent the State may attempt to claim FFP in unallowable social
services
costs by means of the use of the "pass-through" claim.
Consequently,
the State has not established that approval of its State
plan
constitutes the sort of affirmative misconduct by the Agency which
might
support the State's estoppel argument. See, also, n. 6 above.
Finally, we find that the State has not shown how duplicate claims
under
two federal programs could be allowed. The State said in its
response
to the audit report that as long as the charges are allowable, it
has
the option to charge either the Title XX or the Title IV-A program.
As
stated above, a grantee must show how its costs are allowable
and
allocable to the grant program. The Cost Principles for State and
Local
Governments, OMB Circular A-87, Attch. A, C. provides:
1. To be allowable under a grant
program, costs must meet the
following
criteria:
f.
Not be allocable to or included as a cost of any
other
federally financed program in either the current or a
prior
period.
Consequently, in light of the statutory bar, it is especially clear
in
this case that the State could not claim $253,643 of costs under
both
Title IV-A and Title XX. Not only is claiming costs twice
improper, it
is also clear from the applicable statute and regulation that
costs
claimed under Title IV-A must only be maintenance costs and all
social
services costs must be claimed under Title XX. These charges are
not,
in any event, interchangeable. Therefore, for purposes of the
costs in
this case, the State must show which costs, if any, are
maintenance
costs allowable under Title IV-A, and the State must delete these
costs
from its Title XX claim.
In its reply brief, the State requested that if the Board did not find
its
legal argument sufficient to set aside the disallowance, that it be
given the
opportunity to provide the Board with documentation which will
verify which
portions of the State's claims are allowable. Although we
find that the
auditors' method of calculating the disallowance based on
the
characterization of the costs in the contracts was reasonable, in
light of
the State's lack of documentation, we allow the State an
opportunity to
present an alternate method for calculating what portion
of these costs were
unallowable social services costs. The State
requested that the Board
permit it to use a random log time study, that
is already being used in Ohio
for the Title IV-E program, to calculate
the correct disallowance
amount. The Agency, in a telephone conference
call, also requested an
opportunity to comment on the State's proposal.
Therefore, the Board will
allow the State 30 days from the date of this
decision to present its
proposal to the Agency (or such longer time as
the Agency itself
allows). 8/ Also, to the extent that costs which
the State
documents as maintenance costs under Title IV-A were also
claimed under Title
XX, the State is obligated to reduce its Title XX
claim accordingly. If
the parties cannot agree on the methodology, the
State may return to the
Board on this issue only.
III. Unlicensed Institutions
Section 408(f) of the Act provides, in part:
For the purpose of this section . . . the term
"child-care
institution" means a nonprofit
private child-care institution
which is
licensed by the State in which it is situated or has
been
approved, by the agency of such State
responsible for licensing or
approval of
institutions of this type, as meeting the
standards
established for such licensing.
This section of the statute is implemented by 45 CFR 233.110(b)(1).
The auditors stated:
During the period July 1, 1979 through
September 30, 1982, [the
State's county
offices] claimed for reimbursement unallowable
Title IV-A pass-through supplement costs for children residing
in
unlicensed institutions. The State Agency
standard reimbursement
payments for the same
unlicensed periods were questioned in our
prior audit report (ACN 05-30250). Audit report, p.
14.
(emphasis added)
In its initial brief, the State alleged that once the
unlicensed
institutions have been identified, the facilities will be found to
have
been licensed, and even if the institutions in question prove not
to
have been licensed at the time care was provided, the
instant
disallowance should not be affirmed. The State maintained that
the
Board has recognized the doctrine of "equitable licensure" in
Illinois
Department of Public Aid, Decision No. 634, March 29, 1985.
9/ The
State argued that its situation is different than that of
Illinois,
where the Board upheld the disallowance on the grounds that
Illinois had
not implemented an equitable licensure policy for the period
covered by
the audit. In the present case, the State maintained that it
had a
equitable licensure policy, citing Ohio Revised Code 119.06. The
Agency
maintained in its response that the State's officials were informed
of
the identity of the unlicensed institutions, attempted to find
specific
documents showing valid licenses for each, but could not.
Audit report
appendix, p. 5. 10/
In its reply brief, the State submitted certificates for the
Bellefaire
institution for the periods August 1, 1980 through July 31, 1983;
and
for the Children's Aid Society for the periods July 22, 1978
through
August 31, 1983. Further, the State alleged that it could not
identify
a Stonegate facility, as listed by the Agency in its brief, in
Cuyahoga
County. The State submitted that it needed more information to
identify
Stonegate.
Based on the audit report, and the letter from the Director of the
Ohio
Department of Human Services, dated January 11, 1985, we are
persuaded
that the State had notice of the unlicensed institutions and an
adequate
opportunity to locate and produce their licenses. As noted in
the audit
report, the unlicensed periods for all these facilities were
questioned
in a prior audit. 11/ However, as discussed below,
despite many oppor-
tunities the State has only provided partial
documentation to support
its claim that the questioned institutions were
licensed. Moreover, even
if the State had an equitable licensure policy, it
has not shown how it
would apply to the facts in this case,
since it has not provided applications, licensing studies,
or
recommendations that licenses be issued as discussed in Illinois,
supra,
as evidence that the questioned institutions were in such an
equitable
licensure status.
The State submitted one-year certificates for the Bellefaire
institution
for August 1, 1980 through July 31, 1983. However, for the
December
1979 through July 1980 period previously questioned by the auditors
the
State submitted the certificate it had previously submitted for
the
August 1, 1980 through July 31, 1981 period. (State's appeal file,
exh.
k; State's reply, exh. 4) As a result, we must uphold the
disallowance
for the December 1979 through July 1980 period. Further,
it appears
from the audit report that only the December 1979 through July
1980
period for Bellefaire was ever at issue. The Agency should review
this
portion of the disallowance to assure that costs at Bellefaire
are
disallowed only for this period.
Although the State submitted that it could not identify a
Stonegate
facility in Cuyahoga County, it did admit that a Stonegate
facility
existed outside the State. However, the State did not submit
any
documentation on this facility. If the State had
submitted
documentation to show that a Stonegate facility was licensed during
the
disallowance period, it would have been acceptable absent any
further
information from the Agency.
Finally, we conclude that the State, in its reply brief,
submitted
certifications to document that the Children's Aid Society was in
fact
licensed for the entire disallowance period. The State presented
copies
of 5 yearly licensing certificates, for the period July 22, 1978
through
August 31, 1983, for the Children's Aid Society. Each
document
certified that the Children's Aid Society was licensed by the State
of
Ohio to conduct a residential care facility in accordance with
specific
sections of the Revised Ohio Code (code sections changed during
the
5-year period). Further, each document contained a license number
and
the name of the Department of Mental Health approving official.
State's
reply brief, exhs. 7-11. These are the same certificates that
the
Agency was prepared to accept as valid for Bellefaire (if the
correct
time period had been covered). Therefore, we reverse that portion of
the
disallowance for unlicensed institutions attributable to the
Children's
Aid Society, and direct the Agency to adjust the disallowance
consistent
with this decision.
Conclusion
Based on the foregoing, we affirm the $761,013 disallowed as
social
services costs unallowable under Title IV-A, subject to a
possible
reduction, as explained in this decision. Further, as to the
$11,745
disallowed for unlicensed institutions, we reverse that
portion
attributable to the Children's Aid Society and affirm the
remaining
portion.
________________________________
Cecilia
Sparks Ford
________________________________
Charles
E. Stratton
________________________________
Norval
D. (John) Settle Presiding Board Member
1. A new Title IV-E Foster Care and Adoption
Assistance Program was
added by section 101(a)(1) of Public Law 96-272,
effective October 1,
1980. The AFDC-FC program under Title IV-A was
repealed by section
101(a)(2) of that law, effective at the time a state plan
under IV-E
became effective, but no later than September 30, 1982. For
purposes of
this decision, however, the provisions of Title IV-A apply.
The new
program was implemented by the State effective October 1, 1982.
2. The pertinent section of Title XX describing the
services stated,
in part:
Services . . . include, but are not limited to,
child care
services, protective services for
children and adults, services for
children and
adults in foster care, services related to the
management and maintenance of the home, day care services
for
adults, transportation services, training and
related services,
employment services, information,
referral, and counseling
services, the preparation
and delivery of meals, health support
services and
appropriate combinations of services designed to
meet
the special needs of children . . .
3. In the Board's acknowledgment to the parties,
the Board stated:
In previous decisions (Joint Consideration:
Reimbursement of
Foster Care Services, June 30,
1982, Decision No. 337; New York
State Department of
Social Services, July 29, 1983, Decision No.
449;
and New York State Department of Social Services, July
16,
1984, Decision No. 552) the Board has held that
costs of social
services are unallowable under Title
IV-A. The parties are
requested to comment on
the applicability of these decisions to the
present
case.
We note that the U.S. District Court upheld the Board in appeals by
the
State of Oregon, in Decision No. 337, Oregon v. Heckler, Civ.
No.
83-1466 (D.C. Or., January 31, 1984), and the State of New York,
in
Decision Nos. 449, 552, and 614, New York v. Bowen, Civ. No.
84-3620
(D.C. D.C., November 21, 1986).
4. The affidavit stated, in pertinent part:
* * *
8. That care includes
providing shelter, food, clothing and
personal
items, recreation, education, transportation,
supervision,
counseling, general home nursing and
tutoring. It also includes
overseeing the child's
well-being, confer- ring with the county
case worker
and other activities analogous to those provided by
foster parents in foster homes.
9. The care provided by
Ohio's Title IV-A foster care
institutions does not
include the activities conducted by county
social
workers. Those individuals determine eligibility
and
develop the plan of care, place children in
institutions or foster
care homes, attempt to
ameliorate the conditions in the natural
family,
make contact with courts where necessary, and monitor
the
child's foster care in the institution.
* * *
5. In a previous Board decision, the Board has stated
that four
elements must be present to establish the defense of
estoppel: (1) the
party to be estopped must know the facts; (2) he must
intend that his
conduct shall be acted on or must so act that the party
asserting the
estoppel has a right to believe it is so intended; (3) the
latter must
be ignorant of the true facts; and (4) he must rely on the
former's
conduct to his injury. Montana Department of Social and
Rehabilitation
Services, Decision No. 171, April 30, 1980. Moreover, in
Shenandoah
Professional Standards Review Foundation, Decision No. 652, June
5,
1985, the Board relied on U.S. Supreme Court decisions which
indicated
that where a party asserts estopel against the federal government,
that
party must also show "affirmative misconduct" by the government.
See
Montana v. Kennedy, 366 U.S. 308 (1961); INS v. Hibi, 414 U.S.
5
(1973).
6. In response to the draft audit report, the State
argued that its
claims were proper under Title IV-A notwithstanding that the
payments
covered some "of the same activities called social services under
Title
XX." Appendix to Audit Report.
7. As the State pointed out, the Action Transmittals
issued by the
Agency recognize that maintenance payments encompass more than
room and
board. State's brief, p. 33. The Agency does not
disagree with the
State on this point, but rather stressed the need for the
State to
document any allowable costs. (With regard to the scope of
what is
covered by a maintenance payment under Title IV-A, see New York at
pp.
12-16.)
8. We note that the Board has approved the use of
valid statistical
sampling techniques in past decisions. See California
Department of
Social Services, Decision No. 816, December 5, 1986, and
decisions cited
therein. However, the Agency must approve any sampling
methodology
proposed by the State. We note that HHS auditors have
established
guidelines for sample size, variability, etc., which the State
might
wish to consult.
9. In Illinois the State argued that in situations
where an
institution was not licensed but: (1) an application had been
completed
and signed by the applicant; (2) a licensing study had been
performed
and reduced to writing which indicated approval of the applicant
as
meeting the licensing standards; and (3) the application had
been
submitted [to the State], along with the recommendation that a
license
be issued, which was signed by the licensing representative and
the
supervisor but no certificate of licensure had been issued, the
State
Department of Children and Family Services had extended an
"equitable
right to a license."
10. The letter from the Director of the Ohio
Department of Human
Services stated, in pertinent part:
The institutions in question were undoubtedly
licensed by a state
agency other than OHDS.
During the period of the audit, there were
organizational changes in names and responsibilities of
state
agencies. One of the institutions
represented in the audit as
being unlicensed,
Bellefaire, was in fact licensed by the
Department
of Mental Health and Mental Retardation (a copy of
that
license is attached). Complex research
will be necessary to
establish that licenses were in
effect, including contacting other
state agencies,
some of which are now defunct. As a result,
OHDS
will require more time to document
licensure. We are confident
that the
institutions were licensed.
11. The sole basis for disallowing institutions as
"unlicensed" was
that the State had presented only partial evidence to
document the
licensure status of the questioned