Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Appellate Division
SUBJECT: New York State Department
of Social Services
Docket No. A-95-175
Decision No. 1588
DATE: July 11, 1996
DECISION
The New York State Department of Social Services (New
York) appealed a determination by the Administration for
Children and Families (ACF) to disallow $388,590 claimed
under title IV-E of the Social Security Act (Act) as
foster care and adoption assistance administrative costs
for New York City for the quarter ended March 31, 1992.
Title IV-E provides federal financial assistance to
states for foster care maintenance payments and adoption
assistance payments on behalf of children who would
otherwise be eligible for title IV-A (Aid to Families
with Dependent Children) and for reimbursement at 50
percent of the total amount expended "as found necessary
by the Secretary for the provision of child placement
services and for the proper and efficient administration
of the State plan." Section 474(a) of the Act. ACF
determined that the costs claimed as foster care and
adoption assistance administrative costs for nurses
working at New York City Child Welfare Administration
(CWA) field offices and congregate care facilities did
not relate to any of the types of activities reimbursable
as title IV-E administration as set forth in 45 C.F.R.
1356.60(c)(2). ACF also relied as a basis for the
disallowance on its policy announcement, ACYF-PA-87-05,
dated October 27, 1987, which specifically emphasized
that title IV-E reimbursement was not available for the
costs of "services, investigations, or physical/mental
examinations or evaluations."
New York contended that the costs incurred for the
nurses' activities were allowable administrative costs of
the title IV-E program because the nurses performed
functions associated with the placement of a child and
the development of a child's case plan. New York
asserted that these activities are listed as examples of
allowable administrative costs under 45 C.F.R.
1356.60(c)(2). 1/
As discussed below, we conclude that the nurses'
activities were not activities which were necessary for
the proper and efficient administration of the title IV-E
state plan. Thus, we conclude that ACF's disallowance
determination was proper.
Statutory and Regulatory Background
Title IV-E was originally enacted as part of the Adoption
Assistance and Child Welfare Act of 1980, Public Law No.
96-272. This title authorizes appropriations to enable
states to provide, in appropriate cases, foster care and
adoption assistance for children with special needs to
children who would otherwise be eligible for benefits
under the Aid to Families with Dependent Children program
(AFDC) of title IV-A of the Act. Section 470 of the Act.
Because Congress wanted to encourage states to prevent
improper foster care placements and to ensure that
children remained in substitute care only when necessary,
it imposed conditions on the receipt of title IV-E
funding for foster care maintenance payments. First, the
state must make reasonable efforts prior to the placement
of a child in foster care to prevent or eliminate the
need for removal of the child from his home. Section
471(a)(15)(A) of the Act. Second, the removal must be
pursuant to a judicial determination with specific
findings concerning the child's welfare and reasonable
efforts or pursuant to a voluntary agreement. Section
472(a)(1). Third, each child in foster care must have a
case plan. Section 471(a)(16).
Section 474 of the Act establishes several categories of
title IV-E expenditures including foster care maintenance
payments, adoption assistance payments, training
expenses, and other administrative expenses.
Administrative expenses are authorized by section
474(a)(3)(C), which provides funding for expenditures
"found necessary by the Secretary for the provision of
child placement services and for the proper and efficient
administration of the State plan. . . ."
The regulations implementing title IV-E are codified at
45 C.F.R. Part 1356. Section 1356.60(c) concerns
allowable administrative costs. It provides for
reimbursement of state administrative expenses incurred
to fulfill the unique requirements of title IV-E (45
C.F.R. 1356.60(c)(1)) and identifies other activities
the costs of which are considered allowable IV-E
administrative costs (45 C.F.R. 1356.60(c)(2)). 2/ The
regulation, however, distinguishes those administrative
activities, such as eligibility determinations, case
reviews, placement, and referrals to services, for which
FFP is payable, and social services, which do not qualify
as administrative activities under title IV-E.
Factual Background
On its quarterly expenditure report submitted March 3,
1994, New York claimed as administrative costs of the
title IV-E program the costs of activities performed
during the period January 1 through March 31, 1992 by
nurses assigned to five field offices of the New York
City (NYC) Child Welfare Administration (CWA) and four
CWA congregate care facilities. As discussed below, the
nurses were placed in these facilities as a result of
court-approved settlements reached in litigation against
NYC. Of the costs claimed, $385,481 was claimed as
administrative costs for title IV-E foster care and
$3,109 was claimed as administrative costs for title IV-E
adoption assistance. 3/
In New York State, the foster care system is regulated
and supervised by the New York State Department of Social
Services and administered by the 58 local social services
districts (SSDs) within the State, of which NYC is one.
A SSD is "responsible for the welfare of children who are
in need of public assistance and care, support and
protection, residing or found in its territory, insofar
as not inconsistent with the jurisdiction of the family
court." New York State Social Services Law (SSL), 395;
New York Ex. 8. NYC is the only SSD that maintains
directly operated congregate care facilities (residential
facilities). NYC also is the only SSD that uses nurses
in field offices and congregate care facilities. 2/16/96
letter from New York at 2. Other SSDs rely solely on
child protective, preventive, and/or foster care casework
staff to accomplish the information gathering performed
by the nurses in NYC. Id.
The nurses are not employed by NYC or by the CWA.
Rather, the nurses are provided on a per diem basis
through a cooperative agreement between CWA and the New
York City Health and Hospitals Corporation, the municipal
corporation that owns and operates public hospitals in
NYC. New York Exhibit (Ex.) 4. During the relevant time
period, the cooperative agreement specified:
HHC [Health and Hospitals Corporation] agrees to
supply per diem registered nurses to perform medical
examinations of children awaiting foster care
placement at DSS/CWA Field Offices, Teen Centers and
ECS Nursery (Emergency Children Services). Such per
diem nurses will be provided through NRI [Nurse
Referrals, Inc., a subsidiary of HHC] and as such
are independent contractors, not employees of NRI,
HHC or the Department.
New York Ex. 4.
The CWA maintains and operates field offices in each of
the five boroughs of NYC. New York Br. at 3 and New York
Ex. 2, at 2. The field offices act as the entry point
for NYC's foster care system. The CWA field office staff
are responsible for supervising the foster care
placements of children under the care and custody of the
NYC Commissioner of Social Services. The field offices
are open during daytime business hours and an additional
field office in Manhattan is open evenings and weekends
for emergency services and placements. During the period
in dispute, nurses were placed in five of the six CWA
field offices; the CWA field office in Staten Island did
not have nurses. Id. and 2/19/96 letter from New York at
3. Although the cooperative agreement refers to medical
examinations, New York contended that the nurses at the
CWA field offices conducted "placement intake physical
(not medical) examinations," took medical histories for
each child within 24 hours of entry into the foster care
system, ensured that referrals for necessary medical
services were properly made, guarded against the spread
of contagious diseases, and supervised the proper
dispensing of prescribed medications. New York Ex. 2, at
3. The nurses accounted for their observations and
medical history data on a prescribed CWA form, called a
Nurse Triage Form. New York Ex. 2, at 3 and Ex. 5.
During the period at issue, nurses were also placed at
four of the over 40 congregate care facilities operated
by the CWA, through its Office of Congregate Care, where
children in the custody of the Commissioner and in need
of foster care were placed. 4/ New York Ex. 3; 2/16/96
letter from New York at 2; and New York Ex. 18. The
facilities to which nurses were assigned were: E. 229th
Street, the Bronx, which provides long-term foster care
placement for hard-to-place males; 650 Ashford Street,
Brooklyn, which provides foster care placements for
children with special needs, such as cerebral palsy and
autism; 740 Hegeman Street, Brooklyn, which provides
temporary residential placements for females in
anticipation of a more stable and appropriate foster care
placement elsewhere; and Market Street, Staten Island,
which provides long-term foster care placement for hard-
to-place females. New York Exs. 2 and 18. The two
locations in Brooklyn also served as intake locations.
New York stated that the postplacement activities of the
nurses at the congregate care facilities were to assist
CWA caseworkers' efforts to ensure safe and appropriate
foster care placements by "conducting follow-up
monitoring of pre-placement intake physical (not medical)
examinations," reviewing medical histories and taking any
additional medical history information, making referrals
for necessary medical services, ensuring that
comprehensive medical examinations by qualified health
care providers are complete, guarding against the spread
of contagious diseases, and supervising the proper
dispensing of prescribed medications. 5/ New York Ex. 3.
The court-approved settlements in Doe v. New York City
Department of Social Services, 670 F. Supp. 1145
(S.D.N.Y. 1987), (a first interim settlement and then a
second interim settlement agreement) required NYC to
provide for nurses at the NYC CWA field offices and
congregate care facilities. New York Ex. 19 (containing
parts of the approved settlements). Doe was a federal
class action suit against the Commissioner and the NYC
Department of Social Services brought on behalf of NYC
foster care children in the care and custody of the
Commissioner; it was not, however, related to New York's
administration of the title IV-E program. The suit
challenged the Department's practice of repeatedly
assigning children to foster care facilities on a night-
to-night basis pending more permanent placements. The
court found that some foster children in the
Commissioner's custody had been effectively homeless
while they awaited long-term foster care placement. Doe
at 1185. In many cases, children for whom foster care
placement was needed spent repeated days in the CWA field
offices coupled with repeated temporary overnight stays
at different facilities; thus, the court found that they
did not receive adequate shelter or appropriate treatment
while awaiting placement by the Commissioner and awarded
the preliminary injunctive relief sought. Prior to the
court's decision on the plaintiff children's right to
preliminary relief, however, the parties entered into a
"First Interim Stipulation and Order of Settlement." Doe
at 1148. The court described the interim settlement as
providing "a short-term solution to the inadequacies of
the "night-to-night" program" and "addressed the
inadequacy of the food, medical care, toilet facilities,
outdoor recreation, and education at the field offices."
Id. The first interim settlement stated that a full-time
nurse must be stationed at each SSD field office and
described the functions of the nurse, under the heading
"Medical care" as follows:
The nurse shall take a medical history and give an
intake physical examination to each child within 24
hours of the time he/she enters the foster care
system, unless the child is placed in a stable
placement sooner. The nurse shall also be
responsible for determining which children are on
medication and for ensuring that each child takes
his/her medication in conformity with the
prescription and for monitoring for any side effects
while the child is in the field office.
New York Ex. 19, at 3, 2.b.
The second interim stipulation and order of settlement
provided that children on overnight placements should be
provided certain care. In describing the "medical care"
these children are to receive, the settlement agreement
states as follows:
45. CWA shall continue to station a full-time
registered nurse in each field office at which class
members are cared for (except Staten Island and
Adams Street field offices), each teen center, and
each ECS office. Class members at the Staten Island
field office shall be transported to a local
hospital or clinic for their intake physical
examination. Class members at the Adams Street
field office shall be transported to the Bedford
Avenue field office for their intake physical
examinations.
46. The nurse shall take a medical history and give
an intake physical examination to each class member
within 24 hours of the time he/she enters the foster
care system and record the findings on a summary
medical form. The summary medical form shall also
contain medical information conveyed by the class
member's caseworker or the Division of Placement,
including, with respect to class members who have
been determined to be on medication, the dosage and
frequency called for by the prescription. The nurse
shall place the summary medical form in the medical
record of each class member. The nurse shall place
any subsequently obtained information in the medical
record and enter any additional pertinent findings
on the summary form. The nurse shall retain a copy
of the updated record in her files.
47. . . .The nurse shall place the report of the
full medical examination [required for each class
member within 10 days of entering foster care] in
each class member's medical record and shall enter
any additional pertinent findings on the summary
medical form.
The agreement further specifies procedures for CWA, the
nurses and any temporary facilities, to ensure that
children on overnight placements receive their proper
medications or are evaluated by a nurse if medications
are administered at an overnight or temporary placement,
so that the child's well being is adequately monitored
and so that a child does not suffer injury or harm
because medications were not administered or were
administered incorrectly. New York Ex. 19, Order of
Settlement dated 10/31/89, at 19-21.
New York stated that if nurses were not on-site at the
field offices and the congregate care facilities, the
activities for which the expenditures were made would
have been performed by a CWA caseworker or houseparent
staff (in the case of a congregate care facility). State
Exs. 2 and 3. No other SSD in New York uses nurses as
NYC does; rather, the other SSDs in New York rely solely
on child protective, preventive, and/or foster care
casework staff to gather, to the extent available and
accessible, relevant medical information for each child
in its foster care program. 2/16/96 letter from New York
at 2.
New York regulatory standards for foster care require the
designation of a case planner and a case manager for each
foster care case. 2/16/96 letter from New York. The
development of a case plan is the responsibility of the
CWA field office child protective caseworker initially
assigned to investigate and assess the case. Id. at 4.
This worker is the initial case planner and works with a
supervisor in deciding whether the circumstances warrant
emergency intervention or referral for judicial action
for removal from the home. Id. If intervention is
necessary, the caseworker develops the case plan and
works with a CWA Office of Placement Services placement
coordinator to find an appropriate placement from the
available foster care settings. Id. at 4 and 5.
Analysis
The costs of services of per diem nurses at New York
City CWA field offices and congregate care
facilities are not necessary for proper and
efficient administration of the title IV-E program.
New York argued that the preplacement screening
activities of nurses assigned to CWA field offices and
the postplacement activities of nurses assigned to CWA
congregate care facilities are "closely related" to the
listed allowable administrative activities set forth in
45 C.F.R. 1356.60(c)(2), and are thus themselves
allowable administrative activities. Specifically, New
York argued that the nurses' activities are part of
foster care placement and case plan development. New
York contended that the nurses' activities are essential
to ensure conformance with state plan mandates "for
reasonable standards related to foster care admissions
and safety outlined at 471(a)(10) of the Act and for
the development of case plans for each child." New York
Br. at 9. New York also stated that the preplacement
intake and postplacement monitoring activities performed
by the nurses are "designed to achieve the goal of
arranging for placement consistent with the best
interests and special needs of the child" pursuant to
475(5)(A) of the Act "while protecting the health and
safety of the foster care providers at the initial
placement setting." New York Br. at 10. New York
described these activities as conducted in advance of or
apart from the comprehensive medical examination which
must be performed by an appropriate health care provider
once a child has been placed in foster care. New York
also contended that the activities for which the costs
were claimed are non-medical and would otherwise be
performed by a CWA caseworker who does not generally
possess the health care and educational background of a
nurse. New York Reply Br. at 2.
The Board has considered at length in previous decisions
whether the costs of various activities are reimbursable
as administrative costs under title IV-E. Missouri Dept.
of Social Services, DAB No. 844 (1987), at 17; New York
State Dept. of Social Services, DAB No. 1428 (1993), at
10; and Illinois Dept. of Children and Family Services,
DAB No. 1530 (1995), at 26. The Board determined that
since 45 C.F.R. 1356.60(c)(2) lists examples of
allowable administrative cost activities, a state could
not reasonably conclude an activity to be one which had
been "found necessary by the Secretary . . . for the
proper and efficient administration" of title IV-E, as
required under section 474(a)(3)(C) of the Act, unless
the activity is one of the nine activities specifically
listed in the regulation or is closely related to one of
the listed activities. The Board then examined whether
the disputed activities were the same or different from
both the function and purpose of the allowable activities
listed in the regulation. DAB No. 1428, at 11; and DAB
No. 1530, at 26. The Board also rejected the States'
arguments that costs of certain unlisted activities
should be considered covered as allowable administrative
costs even if the activities were necessary to comply
with the mandates of title IV-E. The Board noted that
the disputed activities were "not unique to the title IV-
E program" and did "not further the specific limited
goals that program was designed to meet." DAB No. 1428,
at 14; DAB No. 1530, at 27. The fact that the Act
conditions the availability of title IV-E maintenance or
adoption assistance payments for children on a state
meeting certain requirements relating to child welfare
generally is not a basis for finding that funding is
available under title IV-E for any and all activities
related to these conditions; rather, a state obliges
itself to comply with certain requirements when it
voluntarily undertakes a title IV-E program. DAB No.
1530, at 30.
Moreover, the federal government may participate in
funding different types of child welfare programs, but
states retain primary responsibility for the safety and
welfare of the children who live within their
jurisdictions. In light of this fact, Congress did not
intend, in enacting title IV-E, that the federal
government would assume the responsibility for overall
funding of child welfare programs. DAB No. 1428, at 14,
citing staff of House Comm. on Ways and Means, 102d
Cong., 2d Sess., Overview of Entitlement Programs 839
(Comm. Print 1992); DAB No. 1530, at 30. Title IV-E,
therefore, is a program of limited purposes; its primary
component involves funding maintenance payments for
foster care children who would otherwise be eligible for
AFDC under title IV-A. Thus, title IV-E was never
intended to share in those costs incurred in carrying out
a state's fundamental responsibility to protect and
ensure the safety of its children and which would have
been incurred even if title IV-E did not exist.
Determining whether a particular activity is listed as
one of the regulatory examples of allowable
administrative costs or is closely related to a listed
activity requires an examination of the activity: what
the functions of the activity are, for what use or
purpose is the activity performed, and then whether the
activity is listed or closely related to a listed
activity. Below, we first examine the preplacement
activities of the nurses in CWA filed offices and discuss
why we conclude that those activities are not activities
both in function and purpose included in or closely
related to the listed allowable administrative activities
of "placement of a child" and "development of a case
plan." Finally, we examine the postplacement activities
of the nurses in CWA congregate care offices and discuss
why we conclude also that those activities are not
activities included in or closely related to the listed
allowable administrative activities of "placement of the
child" and "development of a case plan."
A. Preplacement activities of the nurses in CWA
field offices are not included in or closely related
to the activities specifically listed in 45 C.F.R.
1356.60(c)(2) as allowable administrative costs.
1. "Placement of a Child"
We are not persuaded by New York's contention that the
nurses' activities are costs incurred for "placement of a
child" which are appropriately considered as costs
related to the administration of title IV-E pursuant to
45 C.F.R. 1356.60(c)(2)(iii).
While New York contended that the nurses' activities were
part of the preplacement intake procedures, it
nevertheless very generally described their activities
and did not state exactly how the activities related to
placement of the child. New York Brief at 2 and 3, 10
and 11; Reply Brief at 2 and 4; New York Ex. 2 at 2 and
3. In response to the Board's request for further
information, New York explained that the use of nurses at
the field offices was a direct result of the Doe
litigation.
Both Doe settlement agreements specifically described the
nurses' activities as "medical care" and provided that
the nurses shall take a medical history and give an
"intake physical examination" to each child within 24
hours of the time the child enters the foster care
system. Ex. 19. The settlement agreements further
stated that the nurses are responsible for determining
which children are on medication and for ensuring that
for those children, the medication is appropriately
administered and monitored for side effects while a child
is in the care and custody of the NYC. Id. Nowhere in
the settlement agreements is there any indication that
the activities of the nurses relate to the placement of a
child in foster care or are necessary administrative
steps for such placement.
Reading Doe together with the settlements, we conclude
that nurses were mandated at the field office to
ameliorate the lack of proper care being given to
children in the custody of NYC who were not yet in stable
foster care placements, but were subject to repeated
temporary "overnight placements." Doe at 1148. The
court determined that prior to the interim settlement,
there had been no responsible oversight of the care and
welfare of children subject to overnight placements,
particularly of their health related needs or problems,
since New York regulations required only that a complete
medical examination be made within 30 days of placement
in a foster care home or institution. Consequently, if a
child was subject to repeated overnight stays, the
comprehensive medical exam was significantly delayed.
Children on medications, for example, might not receive
their proper medications or proper dosages or sick
children might not be noticed because no one foster
caregiver was responsible for these children. The
settlements, therefore, required nurses at the field
offices and established protocols to be followed by the
nurses at intake to ensure that all children entering the
foster care system under the care of the NYC were being
cared for and supervised properly while awaiting a stable
placement.
Although New York contended that the Doe settlements were
designed to establish a swift and efficient procedure to
place children promptly, we find that it was because NYC
was unable to make such prompt placements that the nurses
were mandated, as a remedial measure, to protect the
safety and welfare of the children in the custody of the
Commissioner until a placement could be made. Thus, the
primary purpose of the nurses' activities was to ensure
the safety and welfare of all children in the care and
custody of the New York City Commissioner of Social
Services, a fundamental responsibility of New York.
This is further evidenced by the Nurse Triage Form. A
review of this form, which is filled out by the nurses
for each child entering NYC's foster care system,
indicates that, besides the recording of a child's
prescriptions and doses, the form's completion requires
an examination of the child by the nurse, requiring
medical expertise. It requires what would appropriately
be considered a physical examination, as that term is
generally defined. 6/ The form also requires that upon
completion of the physical examination, the nurse
indicate whether any of the findings require immediate
medical attention on an emergency or an outpatient basis
or whether immediate medical evaluation is not necessary
and the child can await full assessment within 10 days.
The nurse must also check yes or no for whether the child
is "medically cleared." New York Exs. 7 and 25. Thus,
the nurses' examinations of children in the custody of
NYC within 24 hours of entry into the system ensured that
a child's medical condition was immediately assessed,
appropriate health care was provided, if necessary, and
that a child's medical condition would be monitored until
a placement was made. 7/ New York Ex. 2 at 3. The
evidence shows that the actual activities of the nurses
were performed were not for "placement of the child,"
but, rather, to protect children in the custody of New
York City until such time as an appropriate and stable
placement could be made. The activities were not
necessary in order to administer a title IV-E foster care
program properly and efficiently, but were necessary
because NYC had problems with timely placement of all
foster care children.
Other evidence also fails to support New York's
contention that these procedures were integral to
placement of the child. Initially, the only evidence
submitted of the nurses' preplacement activities and the
purpose of their functions was the statement of the
Assistant Deputy Commissioner for Quality Assurance of
the CWA, who has responsibility for overseeing the
activities of the nurses. She stated that "the nurses
contribute to the effort to make appropriate foster care
placements by conducting intake physical (not medical)
examinations and taking medical histories for each child
within 24 hours of entry in the foster care system." New
York Ex. 2 at 3. The Board specifically requested New
York to explain and provide documentation indicating how
the nurses' activities were used for placement. New York
responded that these activities facilitated the efforts
of and provided additional support to the NYC CWA child
protective caseworkers in developing case plans that
addressed the immediate needs of children. According to
New York, the information gathered by the nurses on the
nurse triage forms--
can be used by the CPS case worker as a basis for
initiating a referral for needed services . . . or
as a preliminary indication that placement can
proceed without complications. Further, this
information is shared with the Office of Placement
Services placement coordinator to determine
appropriate placements and is retained in the case
record.
2/16/96 letter from New York at 4. While these
statements indicate that the data gathered by the nurses
as a result of these examinations may be useful in
developing a case plan, there is certainly no indication
that this data was primarily developed for placement
purposes. The fact that the nurses were not required to
make an examination if the child was put in a stable
placement within the first 24 hours of entering the
foster care system demonstrates that the nurses'
activities were not primarily for the purpose of making
placements.
We also find it significant that NYC is the only SSD in
New York that had nurses in some of its field offices (no
nurses were assigned to the Staten Island field office);
New York indicated that all the other SSDs relied on
"child protective, preventive and/or foster care casework
staff to accomplish the information gathering performed
by the nurses in NYC." 2/16/96 letter from New York.
The record indicates, however, that the nurses'
activities amounted to more than just "information
gathering." In response to the Doe litigation, NYC
implemented an additional medical oversight activity at
an additional cost, unlike any other SSD. 3/6/96 letter
from New York. As ACF pointed out, the costs in dispute
here were not a substitute for the costs of the NYC CWA
caseworkers already allocated to and claimed as
administrative costs of placement of the child under
title IV-E.
Moreover, not even NYC incurs this additional cost at
every field office. In the Staten Island field office,
where no nurses were placed, the caseworker assigned to a
case brings the child to St. Vincent's Emergency Room for
the intake physical examination, which is performed by
either a physician or physician's assistant. New York
claimed these costs as medical costs, presumably under
title XIX of the Act (Medicaid), and not as title IV-E
administrative costs. 2/16/96 letter from New York at 4.
New York argued that the situation at Staten Island was
distinguishable from that at the other NYC field offices
because the intake physical examination at St. Vincent's
might be performed by a physician, who, unlike a nurse,
may render a medical diagnosis or prescribe medications.
New York, however, did not allege that a physician
assistant's examination would be distinguishable from
those done by the nurses, yet New York claimed costs for
physician assistant's examinations as medical and not IV-
E administrative costs. New York nevertheless admitted
that the fundamental activity and the purpose for which
the activity was to be used, whether performed by a nurse
in a field office or a physician or physician's assistant
in the Emergency Room, is not different. 2/16/96 letter
from New York. Consequently, the costs of providing
these same services to children in Staten Island for the
same program purpose were considered medical costs; New
York may not claim costs for the same activity and for
the same purpose as administrative costs just because
they were performed by nurses and described as non-
medical examinations. 8/
Based on the evidence in the record, including the terms
of the contract between CWA and the New York City Health
and Hospitals Corporation, the Doe decision, the specific
terms of the Doe settlements agreements, and the Nurse
Triage Form, we conclude that New York failed to
demonstrate that these activities were activities related
to "placement of a child" and therefore allowable as an
administrative costs pursuant to 45 C.F.R.
1356.60(c)(2)(iii). Thus, New York cannot properly shift
to title IV-E the costs incurred in carrying out the
state's fundamental responsibility for the safety and
welfare of its children.
2. "Development of the case plan"
New York alternatively contended that the activities of
the nurses in the CWA field offices were related to
"development of the case plan," which is listed as an
allowable administrative cost of title IV-E under 45
C.F.R. 1356.60(c)(2)(iv). New York essentially argued
that the health care data gathered by the nurses during
the nurses' examinations was necessary for the
development of a case plan in order to ensure that
children receive proper and appropriate care. New York
also argued that Congress left no doubt that the
collection of certain medical data was essential to a
comprehensive "case plan" pursuant to the definition of
"case plan" in section 475 of the Act.
There is no dispute here that the primary responsibility
in NYC for development of a child's case plan for title
IV-E purposes lies with the CWA case planner or case
manager, the costs of whose services are allowable title
IV-E costs. New York did not contend that the field
nurses have any direct responsibility for a child's case
planning or management. New York Ex. 20; 2/16/96 letter
from New York at 4 and 5. Rather, New York contended
that the information developed by the nurses in the
course of the intake examinations and documented on the
Nurse Triage Form is included in a child's case record,
is available to the caseworker developing the case plan,
and may be used by the caseworker as a basis for
initiating a referral for needed services, including a
referral for medical services. 2/16/96 letter from New
York at 4-6; 3/25/96 letter from New York at 5. However,
as pointed out by ACF, the costs in dispute here were not
incurred for case planning or management purposes.
Rather, the primary purpose for the nurses' activities
was as a remedial measure to protect the safety and
welfare of children in the custody of the Commissioner
until a suitable stable placement could be made and was
not for the development of the case plan. The activities
were at best then incidental to the case planning effort
of the caseworker, who might or might not review the data
gathered by the nurse in development of the case plan.
Moreover, it is significant that except for the
activities here, New York does not consider costs of
activities that result in such health-related data, and
which are costs in addition to the allowable costs of the
case planner or case manager, to be administrative costs
of the title IV-E program. For example, the costs of
procuring the same data in Staten Island are considered
medical costs and not administrative costs of title IV-E.
New York also contended that the costs of these
activities are appropriately considered administrative
costs of title IV-E for development of the case plan
because "the information gathered is essential to satisfy
the case plan provision of title IV-E," section 475(1).
2/16/96 letter from New York at 5. Section 475(1) of the
Act defines the term "case plan" as a written document
containing certain information regarding the placement of
a child and which includes a plan assuring that a child
receives proper care. The statute further states that
the plan should include, "[t]o the extent available and
accessible, the health and education records of the
child." Section 475(1)(C) of the Act (emphasis added).
However, it is clear from this language that states are
required to include these records only if they are
available and accessible. Certainly, the statute does
not mandate that states create health records or that the
costs of activities that result in such records be
reimbursed as title IV-E costs. As ACF pointed out, this
statutory provision also requires the case plan to
include, to the extent accessible and available,
education records of a child, including the child's grade
level performance and school record, yet New York does
not and clearly could not include the costs of developing
such educational records, as administrative costs of the
title IV-E program.
We therefore conclude that the costs of the nurses'
activities were not costs of or related to "the
development of the case plan" under 45 C.F.R.
1356.60(c)(2)(iv) and are not allowable as administrative
costs of the title IV-E program.
B. Postplacement activities of the nurses in CWA
congregate care facilities are not included in or
closely related to the activities specifically
listed in 45 C.F.R. 1356.60(c)(2) as allowable
administrative costs.
New York also claimed that the costs of nurses'
activities at four congregate care facilities operated by
NYC were allowable administrative costs for "placement of
a child" and "development of a case plan" pursuant to 45
C.F.R. 1356.60(c)(2)(iii) and (iv). Although we
specifically asked New York to describe the activities of
the nurses at both the field offices and the congregate
care facilities, the description of what New York
contended were "postplacement activities" of the nurses
at the four congregate care facilities was vague. New
York indicated that two of the congregate care facilities
served as intake locations and the nurses at those
facilities provided the same kind of intake
physical/mental examination as the nurses stationed at
the field offices. New York Ex. 18. New York explained
that while the assessments and the data gathered from
them do not constitute a medical exam, the nurses are
able to obtain necessary medical history data previously
not provided and to assess a child's apparent medical
and/or specialized service needs while at the facility,
thereby facilitating the caseworker's efforts to make
referrals for needed services. Id. at 3. The triage
forms prepared by the nurses become part of the case
record and are available for consideration by the CWA
case manager or case planner assigned to the case. Id.
The other two facilities provided long-term foster care
settings to foster children, particularly hard-to-place
children. New York did not indicate what particular
activities the nurses performed at these two locations
other than alleging that "the use of the nurses in the
congregate care facilities aids CWA efforts to meet
federal placement requirements, meet the New York State
regulatory standards, and to address NYC's unique needs
for prompt, efficient action to respond to the influx of
needy NYC children removed from home," and that this use
is responsive to the court-approved remedy in Doe. New
York Ex. 18 at 2 and Ex. 19. Moreover, the affidavit
submitted by New York regarding the nurses' activities
did not specify that the nurses' activities included
making assessments or gathering data at the non-intake
congregate care facilities. See New York Ex. 18.
The information submitted was not adequate to show that
the nurses' activities at these four congregate care
facilities were related to either "placement of a child"
or "development of the case plan" under 45 C.F.R.
1356.60(c)(2)(iii) or (iv). First, since New York has
presented no evidence to indicate that the activities of
the nurses in the congregate care facilities were
fundamentally different from the activities performed by
the nurses in the CWA field offices, we find no basis to
conclude that the activities when performed
"postplacement" are any more allowable as administrative
costs of the title IV-E program. Thus, for the same
reasons as we found above, we conclude that the
activities in question do not constitute allowable
administrative expenditures.
Moreover, throughout this appeal, New York described the
nurses' activities in the congregate care facilities as
"postplacement" activities as opposed to the
"preplacement activities" performed in the field offices.
9/ This distinction indicates that a decision had been
made for "placement of the child" at one of these four
congregate care facilities and that a case plan has
already developed for the child. Thus, New York's own
characterization of these activities undermines its
argument that they were administrative activities
necessary for "placement of a child" or for "development
of the case plan" since those actions had already been
taken.
Conclusion
For the forgoing reasons, we conclude that ACF correctly
found that these claims fell outside the scope of
permissible administrative costs available under the
title IV-E program. Accordingly, we sustain the
disallowance determination in full.
_____________________________
Judith A. Ballard
_____________________________
Donald F. Garrett
_____________________________
Cecilia Sparks Ford
Presiding Board Member
1. Costs for administrative activities of the type at
issue here "must be allocated to title IV-E, State foster
care and other State/federal programs in such a manner as
to assure that each participating program is charged its
proportionate share of the costs." New York Exhibit 7,
ACYF-PA-87-05; New York Dept. of Social Services, DAB No.
1428 (1993) at 6; and Illinois Dept. of Children and
Family Services, DAB No. 1530 (1995). Moreover, section
1356.60(c)(2) limits reimbursement to costs that are
"necessary" for the administration of the foster care
program. Thus, allowable costs of title IV-E
administrative activities, other than for determining and
redetermining eligibility, are limited to activities for
"those individuals the State reasonably views as
candidates for title IV-E foster care maintenance
payments." The candidacy issue does not appear, however,
to be an issue in this case because New York asserted its
claim covered only children who qualified as candidates
for title IV-E.
2. The full text of section 1356.60(c)(1)-(3) is as
follows:
(c) Federal matching funds for
other State and local
administrative expenditures for
foster care and adoption assistance
under title IV-E. Federal
financial participation is
available at the rate of fifty
percent (50%) for administrative
expenditures necessary for the
proper and efficient administration
of the title IV-E State plan. The
State's cost allocation plan shall
identify which costs are allocated
and claimed under this program.
(1) The determination and
redetermination of eligibility,
fair hearings and appeals, rate
setting and other costs directly
related only to the administration
of the foster care program under
this part are deemed allowable
administrative costs under this
paragraph. They may not be claimed
under any other section or Federal
program.
(2) The following are examples of
allowable administrative costs
necessary for the administration of
the foster care program:
(i) Referral to services;
(ii) Preparation for and
participation in judicial
determinations;
(iii) Placement of the child;
(iv) Development of the case plan;
(v) Case reviews;
(vi) Case management and
supervision;
(vii) Recruitment and licensing of
foster homes and
institutions;
(viii) Rate setting;
(ix) A proportionate share of
related agency overhead.
(3) Allowable administrative costs
do not include the costs of social
services provided to the child and
the child's family or foster family
which provide counseling or
treatment to ameliorate or remedy
personal problems, behaviors or
home conditions.
3. New York did not present any argument or evidence
to distinguish the adoption assistance administrative
costs from the foster care administrative costs.
4. The CWA directly maintains and operates a variety
of group homes, group residences, and agency-operated
boarding homes, commonly referred to as congregate care
facilities.
5. New York explained that the preplacement and
postplacement activities of the nurses were rendered on
behalf of children who have been placed in the care and
custody of the New York City Commissioner of Social
Services, "long after the children have become candidates
for title IV-E foster care." New York Reply Brief at 2.
ACF did not dispute this assertion.
6. Webster's New Collegiate dictionary defines
"physical examination" as "an examination of the bodily
functions and condition of an individual." The Nurse
Triage Form requires the nurse do the following: take a
child's blood pressure and pulse; examine the skin;
examine a child's head, eyes, ears, nose and throat;
examine a child's chest for shortness of breath,
wheezing, congestion, labored breathing, tenderness of
the ribs and back, irregular heart beat, and for
tachycardia; examine a child's abdomen for such things as
tenderness or rigidness, and for bowel sounds; examine a
child's extremities for range of motion, tenderness,
swelling of joints; and examine a child for any
genito/urinary/rectal problems, such as observed blood in
the urine.
7. The function and purpose of the nurses' activities
to assess, treat, and monitor the health needs of a child
who may be subject to the overnight placement program is
further supported by the terms of the second settlement
agreement. Under the terms of that agreement, a copy of
the Nurse Triage Form is sent with each child to each
overnight placement and that facility must record on the
form any medical information regarding the child relevant
to that stay, such as the dosages of medications, the
time of day any medications were administered and the
effects of any medications administered. New York Ex.
19. The form is returned with the child to the field
office after the overnight placement. Within two hours
of arrival at the field office, the nurse is required to
review the medical form and interview or examine, if
necessary, any child who is on medication or whose
medical form contains any medical information recorded
during the previous night's placement. This procedure
makes sure a child's health is effectively supervised and
monitored each time an overnight placement is made and
the child is returned to the field office.
8. New York also argued that ACF's reliance on the
1987 policy announcement failed to afford New York proper
notice under both the Administrative Procedure Act and
prior Board precedent. We have previously determined
that this policy announcement constitutes an
interpretative rule which did not need to be published to
be effective. New York Dept. of Social Services, DAB No.
1428 (1993). ACF's 1987 policy announcement expressly
stated that the costs of "physical/mental examinations or
evaluations" are not allowable administrative costs for
"referral to services" under 45 C.F.R.
1356.60(c)(2)(i). It also emphasized that 45 C.F.R.
1356.60(c)(3) specifically provided that "costs that are
not reimbursable [as administrative costs] under title
IV-E . . . include those costs incurred for social
services which provide treatment to the child . . .
Examples of non-reimbursable services include . . .
physical or mental examinations. . . ." ACYF-PA-87-05
(1987). Contrary to what New York argued, this language
provided adequate notice that the costs of the nurses
activities here were not reimbursable title IV-E
administrative costs.
9. New York indicated that the two facilities that
served as "intake facilities" provided temporary foster
care placements "in anticipation of a more stable
placement elsewhere in the congregate care network" while
the other two facilities provided "needed foster care
placements for children with exceptional needs requiring
enhanced oversight." 2/16/96 letter from New York at 2.