DEPARTMENTAL GRANT APPEALS BOARD
Department of Health and Human Services
SUBJECT: Connecticut Department of Children and Youth Services
Docket No. 87-213
Decision No. 952
DATE: May 3, 1988
DECISION
The Connecticut Department of Human Resources (State) appealed
a
determination by the Administration for Children, Youth and
Families,
Office of Human Development Services (Agency, ACYF) that the State
was
ineligible for $727,925 advanced to the State for fiscal year (FY)
1985
under section 427 of title IV-B of the Social Security Act (Act).
It
also appealed the disallowance by OHDS of $722,433 claimed by the
State
for FY 1985 under title IV- E of the Act. The title IV-E
disallowance
was based on the Agency's finding that the State failed to
comply with
the requirements of section 427, and thus is appropriately
considered
together with the determination of ineligibility for section 427
funds.
Section 427 of the Act provides that a state may receive additional
funds
for child welfare services, beyond the amount available under 420
of the Act,
if the state meets certain requirements for protecting
children in foster
care. ACYF initially approved Connecticut's request
for additional
funds for FY 1985 based on a written certification by the
State that it met
the requirements of section 427. Subsequently, ACYF
performed a
compliance review to validate the State's
self-certification. ACYF evaluated
the State's compliance on two levels:
whether the State had established
policies and procedures for
implementing the section 427 requirements and
whether these policies and
procedures were operational.
ACYF determined that the State had policies and procedures
for
implementing the section 427 requirements; however, after surveying
a
sample of foster care case records, ACYF found that the
requirements
were not actually met in a sufficient number of cases to
constitute
compliance. ACYF required a 90% rate of compliance in order
for the
State to be found eligible for section 427 funds; different
rates
applied depending on the number of years a state had participated in
the
section 427 program (in this case, five years).
The State challenged the review process used by ACYF on a number
of
different grounds and also contested the findings in individual
sample
cases. For the reasons stated below, we uphold the compliance
review
process used by the Agency. We also uphold the Agency's findings
in a
sufficient number of individual cases to determine that the State
did
not achieve the 90% rate of compliance required by the
Agency.
Accordingly, we sustain the Agency's determination that the State
was
ineligible for the section 427 funds. However, we remand the appeal
of
the title IV-E disallowance to the Agency to determine the amount
of
title IV-E funds which was claimed for children who were in
fact
afforded the foster care protections and to reduce the disallowance
to
that extent.
Applicable Law
As one of the conditions for the receipt of additional child
welfare
funds, section 427(a)(2)(B) requires that a state have implemented
and
be operating to the satisfaction of the Secretary--
A case review system (as defined in
section 475(5)) for each
child receiving
foster care under the supervision of the State.
.
. .
Section 475(5) provides that--
The term "case review system" means a
procedure for assuring
that--
(A)
each child has a case plan designed to
achieve
placement in the least
restrictive (most family like) setting
available and in close proximity to the parents' home,
consistent
with the best interest and
special needs of the child,
(B)
the status of each child is reviewed periodically
but
no less frequently than once every
six months by either a court
or by
administrative review (as defined in paragraph (6))
in
order to determine the continuing
necessity for and
appropriateness of the
placement, the extent of compliance with
the case plan, and the extent of progress which has been
made
toward alleviating or mitigating
the causes necessitating
placement in
foster care, and to project a likely date by
which
the child may be returned to the
home or placed for adoption or
legal
guardianship, and
(C)
with respect to each such child, procedural
safeguards
will be applied, among other
things, to assure each child in
foster
care under the supervision of the State of a
dispositional
hearing to be held, in a
family or juvenile court or another
court (including a tribal court) of competent jurisdiction, or
by
an administrative body appointed or
approved by the court, no
later than
eighteen months after the original placement
(and
periodically thereafter during the
continuation of foster care),
which
hearing shall determine the future status of the
child
(including, but not limited to,
whether the child should be
returned to
the parent, should be continued in foster care for
a
specified period, should be placed for
adoption, or should
(because of the
child's special needs or circumstances)
be
continued in foster care on a
permanent or long-term basis); and
procedural safeguards shall also be applied with respect
to
parental rights pertaining to the
removal of the child from the
home of
his parents, to a change in the child's placement, and
to
any determination affecting
visitation privileges of parents.
HCFA's Sampling Method Was Not Defective.
In order to determine a state's rate of compliance in individual
cases,
ACYF used a special type of sampling procedure known as
"sequential
sampling." In this type of sampling, although a sample of a
fixed size
is drawn, all of the cases in the sample may not be
reviewed. Instead,
the number of cases reviewed is determined during
the course of the case
review based on the results in individual cases.
A "decision table"
prescribes how many cases of the number sampled at each
point must have
been out of compliance, or "failed," in order to conclude
without
further review that a state is ineligible for section 427 funds, as
well
as how many cases must have "passed" in order to conclude
without
further review that a state is eligible for section 427 funds.
Here, the State used a computer program for generating random numbers
to
draw a sample of 250 case records which was arranged in a random
reading
sequence. ACYF changed the reading sequence by reordering the
first 163
cases using a table of random digits and proceeded to review the
163
cases in this new order. ACYF found that eight of the first 13
cases
were not in compliance with the section 427 requirements, and, based
on
the decision table, concluded that the State did not meet the
90%
compliance standard. 1/
During the course of the proceedings before the Board, however, the
State
provided additional information to ACYF based on which ACYF
determined that
three of the eight failed cases (in the first 13 cases
reviewed) were in fact
in compliance. Since, under the decision table,
there was no longer a
sufficient number of failed cases to conclude that
the State did not meet the
90% compliance standard, nor was there a
sufficient number of cases in
compliance to determine that the State did
meet that standard, ACYF continued
its case review and thereafter issued
a new determination of
ineligibility. The cases were kept in the same
sequence as in ACYF's
first review.
The State argued that the methodology used to conduct the case review
was
defective because ACYF reordered the cases when they were already
arranged in
a random reading sequence. It contended that ACYF failed to
comply with
its own program instruction (PI 86-03), which provided that
the random sample
should be ordered by using a table of random numbers
unless a state selected
the sample using its capacity for random digit
generation, which would
automatically place the case records in a random
reading sequence. The
State also contended that since ACYF did not
document how it used the table
of random numbers to reorder the cases,
ACYF's reading sequence was invalid.
2/ The State further contended that
any reordering of a sample which was
already arranged in a random
reading sequence resulted in an invalid random
sequence. Finally, the
State pointed out that only one of the first 13
cases reviewed by ACYF
was in the first 13 cases in the State's random
reading sequence, so
that a different result might have been reached if the
cases had been
reviewed in that order.
We conclude that the methodology used to conduct the case review was
not
defective. The State's argument that the methodology used did
not
comply with Agency policy is not persuasive. Although PI 86-03 did
not
require ACYF to reorder cases which were already arranged in a
random
reading sequence, there is nothing in that document which would
preclude
ACYF from doing so. Moreover, ACYF stated that it used a table of
random
numbers to reorder the case records. This is precisely the
methodology
specified by the program instruction for application in most
situations.
PI 86-03 simply provided that where a state has used random
digit
generation to select a sample, it is unnecessary to put the cases in
a
random reading sequence by using a table of random numbers (since
a
random reading sequence has already been achieved). However, this
did
not create an entitlement to a case review in a sequence established
by
random digit generation.
The State's position that the new reading sequence was invalid because
it
reordered an already random sequence and because ACYF did not
document how it
used the random number table is also without merit.
Once the case records
were ordered in a random reading sequence by the
State, a reordering by ACYF
would not logically alter the randomness of
the sequence unless it was done
with some bias, such as sorting the
records by type. 3/ An expert for
the Agency likened reordering a
random sequence to "taking a scrambled egg
and trying to put it back
together again. It's impossible. Once . . .
in random order, it's near
impossible to put it back into any sequence that
had any meaning in
relation to the outcome or even the record."
Transcript of February 24,
1988 telephone conference, p. 8, statement of Dr.
Gershenson. We
therefore conclude that ACYF placed the case records in
a valid random
reading sequence.
The State asserted, however, that if the cases had been reviewed in
a
different sequence, there was a possibility that the State might
have
been found to meet the compliance standard. As the Agency pointed
out,
however, this possibility was extremely remote. The fundamental
point
is that all random reading sequences are equally valid
statistically.
See Declaration of Charles P. Gershenson, Agency's appeal
file, Ex. 5,
p. 3. The expert for the Agency calculated the possibility
of a
different outcome from a change in sequence based on the assumption
that
there were 77 failed cases in the entire sample as one in a
million.
Id. at 4. Thus, as long as the cases remained in a random
reading
sequence, it would be extremely unlikely that a change in sequence
would
cause a change in result. 4/ Moreover, the Agency here
continued
reviewing cases well after the State had reached the rejection
number
(i.e., the number of failed cases necessary to find the State
ineligible
in relation to the number of cases reviewed). The subsequent
reviews
clearly confirm the Agency's conclusion that the State had
failed. The
rejection number for the first 76 cases reviewed was 17,
yet the Board
here upholds findings of 30 failed cases.
Accordingly, the State's argument that the sampling methodology
was
defective has no merit.
The 90% Compliance Standard Was Not Arbitrary, Capricious or an Abuse
of
Discretion.
Fiscal year 1985 was the fifth consecutive year that the State
received
section 427 funds, and the third year that the State's compliance
with
the section 427 requirements was reviewed. The compliance
standards
applied to the FY 1982 and FY 1983 reviews were 66% and
80%,
respectively. The 90% compliance standard for triennial reviews
(the
third review, which followed two unreviewed years) was
officially
announced by ACYF after the start of FY 1985 (in PI 85-2, dated
January
29, 1985). The State argued that it had no notice of the 90%
standard
and that retroactive application of the standard was thus improper.
The
State further argued that the 90% standard applied in FY 1985
was
invalid because it was not promulgated as a rule following notice
and
comment rulemaking. Finally, the State argued that the 90% level
of
compliance had no empirical basis and was too high. However,
as
discussed below, we conclude that the application of the 90%
compliance
standard here was permissible.
The question whether this type of compliance standard is a rule
required
to be promulgated through notice and comment rulemaking was
addressed by
the Board in Maryland Dept. of Human Resources, DGAB No. 706
(1985). At
issue in that case was the 80% compliance standard used by
the Agency
for second year reviews and set out in PI 82-06. In finding
that the
compliance standard was not a legislative rule subject to the notice
and
comment provisions of the Administrative Procedure Act, the Board
stated
in part:
The compliance standard indicated in the
program instruction is
not intended as a
standard having future effect on the actions
of
the public. See the definition
of "rule" above; see also
[citations
omitted]. As the court noted in King v. Lynch, 550
F.
Supp. 325 (D. Mass. 1982), the
statutory requirements govern how
the
states are to conduct their case review systems and this
is
not changed by the fact that the
Secretary has discretion to
accept less
than perfect compliance. Thus, the
program
instruction is not a mandate
that states comply in 80% of their
cases, but indicates that, even if a state has failed to
actually
meet the statutory requirements
in all cases, OHDS may still find
the
state's operation to be satisfactory.
(DGAB No. 706, p. 10) 5/ Similarly, the 90% compliance standard did
not
change the statutory requirements; it was merely the level of
compliance
which the Secretary decided as an administrative matter to enforce
in
triennial reviews. 6/ The 90% standard was therefore not a rule
for
which notice and comment rulemaking was required or for which
an
empirical basis must be established.
Moreover, it is clear that retroactive application of the standard was
not
prejudicial to the State. (We assume for purposes of responding to
the
State's argument that the State had no notice of the 90%
compliance
standard.) To argue that the State was harmed by the lack of
notice
would be to admit that the State never intended to fully comply with
the
statutory requirements, but had aimed instead for the 80% level
of
compliance required in the prior review. Such an approach would
be
inconsistent with the certification submitted by the State for FY
1985
that it met the requirements of section 427. 7/ Finally, we note
that
even if the 80% compliance standard were applied, it is not clear
that
the State would have passed the individual case review. The
Agency's
review of 163 records suggested that the State's failure rate
was
between 37 and 57 percent with a 99 percent level of
confidence.
Declaration of Charles P. Gershenson, Agency's appeal file,
Ex. 5, p.
6. The Board here reversed only 4 cases out of 34 failed
cases through
case #76. Thus, the State's objection to retroactive
application of the
90% standard may not have any practical significance.
The State argued, however, that the language of section 427(a)(2)(B)
which
provides that a state is ineligible for section 427 funds unless
it "has
implemented and is operating to the satisfaction of the
Secretary" a case
review system means that the statute does not require
100% compliance.
The Board has previously considered this language, and
has consistently held
that, at most, it gives the Secretary discretion
to waive minor violations of
the statutory requirements for full
compliance in "each case." Wyoming
Dept. of Health and Social Services,
DGAB No. 554 (1984); Arkansas Dept. of
Human Services, DGAB No. 553
(1984); Vermont Dept. of Social and
Rehabilitation Services, DGAB No.
546 (1984); Ohio Dept. of Public Welfare,
DGAB No. 472 (1983). The
State did not make any showing why the Board
should now interpret this
language as giving the Secretary authority to
determine that the statute
itself requires less than full compliance in all
foster care cases.
Accordingly, we conclude that ACYF's application of the 90%
compliance
standard was not arbitrary, capricious or an abuse of
discretion.
ACYF Was Authorized to Recoup All Additional Funds Awarded Pursuant
to
Section 427 for Failure to Comply with the Requirements of That
Section
in All Cases.
The State argued that the sanctions imposed by the Agency here--
requiring
the refund of all section 427 funds for FY 1985 and
disallowing all title
IV-E funds expended during that fiscal year--were
not authorized by the
Act. With respect to the section 427 funds, the
State asserted that the
only remedy available to ACYF is to declare a
state ineligible for future
title IV-B funds until a state has
implemented and is properly operating its
case review system. (The
State submitted an affidavit to prove that it
was now in full compliance
with the section 427 requirements, so that this
remedy was not
required.) The State contended that the legislative history of
section
427 "specified that a State that failed a section 427 review would
have
its IV-B funds reduced "beginning with the succeeding fiscal year. .
.
unless and until it had implemented the protections and procedures'
for
the required case review system." State's brief dated June 2, 1987,
p.
58, quoting from H. Conf. Rep. No. 900 at 57 (emphasis added).
However, the language in the conference report on which the State
relied
is taken out of context. The language is intended to describe
the part
of section 427(b) of the Act which provides:
If, for each of any two consecutive
fiscal years after the fiscal
year 1979,
there is appropriated under section 620 of this
title
a sum equal to $266,000,000, each
State's allotment amount for
any fiscal
year after such two consecutive fiscal years shall
be
reduced to an amount equal to its
allotment amount for the fiscal
year
1979, unless such State--
* * *
(2) has implemented and is operating the
program and systems
specified in
subsection (a)(2) of this section.
The conference report quoted by the State states, more fully, that
"when
Federal IV-B appropriations have equalled the authorized maximum of
$266
million for two consecutive years, a State would have its IV-B
funds
reduced, beginning with the succeeding fiscal year, to the share of
$56
million it received in fiscal year 1979. . . ." This means
that title
IV-B funds are to be reduced to FY 1979 levels (for states which
have
not implemented the section 427 protections) beginning in the
fiscal
year after title IV-B appropriations have equalled $266 million for
two
consecutive years. For earlier fiscal years, section 427(a)
provides
that a state which has not implemented the section 427 protections
shall
not be eligible for more than the amount of its allotment had
the
appropriation been $141 million. A reduction in section 427 funds
would
not take place only if, in these earlier years, the appropriation
was
$141 million or less.
Thus, the phrase "beginning with the succeeding fiscal year" does not
have
the meaning attributed to it by the State. In context, it merely
means
that the reduction to the state's allotment under a $56
million
appropriation, as opposed to a reduction to a state's allotment under
a
$141 million appropriation, takes place beginning with the fiscal
year
following two consecutive fiscal years in which there has been
an
appropriation of $266 million. Accordingly, the State's argument
that
the Agency may only withhold section 427 funds prospectively has
no
merit.
ACYF Was Authorized to Recover Title IV-E Funds Representing Payments
to
Children Not Afforded the Section 427 Protections.
The State also took the position that the Secretary was not authorized
to
recover previously paid title IV-E funds for failure to implement the
section
427 protections. The State argued that section 471(b) of the
Act
authorized the Secretary only to reduce "further" title IV-E
payments, and,
moreover, that such a reduction must be based on a
finding that there was a
"substantial failure" to comply with section
427. The State asserted
that there was no substantial failure to comply
in its case.
We agree that section 471(b) authorizes only a prospective sanction
for
substantial failure to comply with the title IV-E requirement for a
case
review system, which is also a requirement of section 427.
However,
nothing in section 471(b) states or implies that this is the
exclusive
remedy for non-compliance. Under section 471(a), in order to be
eligible
for title IV-E payments, a state must have an approved plan which
meets
certain requirements. In particular, section 471(a)(16) requires
that a
state's title IV-E plan "provide for a case review system which
meets
the requirements described in section 475(5)(B) with respect to each .
.
. child [receiving foster care maintenance payments]." Where such
a
child is not afforded the procedural protections provided for in
section
475(5)(B), the payments made to that child are not claimed pursuant
to
the state plan and a disallowance is appropriate.
However, it appears that in this case, ACYF disallowed all funds
claimed
under title IV-E for fiscal year 1985. The Agency's April 14,
1987
determination states:
Because Connecticut is ineligible to
receive funds subject to
section 427
requirements, the State is also ineligible to
receive
the amount claimed under title
IV-E for Voluntary Foster Care. .
. .
The amount previously awarded under title IV-E,
$722,433,
will be recovered in a grant
award. . . .
State's appeal file, Ex. B. Since it is clear from the record that
the
State implemented the section 427 protections for at least some of
the
children in foster care, there is no basis for disallowing the
entire
amount claimed under title IV-E. Accordingly, we remand this part of
the
appeal to the Agency to determine the amount of title IV-E funds
which
was claimed for children who were afforded the foster care
protections.
The Agency should issue a revised disallowance which does not
include
payments made for these children. The State may appeal this
revised
disallowance to the Board pursuant to 45 C.F.R. Part 16.
Individual Case Review
As noted previously, in the first case record review, ACYF found the
State
ineligible after reviewing only 13 cases since at that point eight
cases had
been found out of compliance. At that time, however, ACYF
had
informally reviewed the entire sample of 163 case records, finding
77
cases out of compliance. It subsequently reversed its findings
with
respect to three of the failed cases in the first 13 based on
additional
information provided by the State. In granting ACYF's
request for a
stay of proceedings in the appeal so that it could continue its
review,
the Presiding Board Member permitted the Agency to provide
detailed
findings regarding the remaining 74 cases failed in the informal
review
as well as to identify the current basis for the disallowance.
Letter
to parties dated August 11, 1987. ACYF later stated that it
had
determined in its review that all but one of the 74 cases
failed.
However, ACYF provided detailed findings only for the 34 failed
cases
found through case #76. 8/
The State argued that ACYF violated the Board's ruling in
providing
detailed findings for only some of the allegedly failed cases and
in not
specifying what cases it was relying on for its determination
of
ineligibility. ACYF indicated following its second case review
that,
according to the decision table, it could have found the
State
ineligible after reviewing only 23 cases, since at that point,
nine
cases had been found out of compliance. However, ACYF also
identified
the number of cases through case #76 and through case #163 which
had
failed. 9/ The State contended that the appropriate response to
ACYF's
failure to develop the record properly would be to find the
State
eligible for the section 427 funds based on the Agency's review of
the
first 13 cases, which the Agency agreed was not sufficient to find
the
State ineligible. To do otherwise, the State asserted, would
sanction
ACYF's "blatant violation" of the Board's ruling and permit
a
continuation of the Agency's "baseless harassment" of the State.
State's
brief dated October 7, 1987, p. 12.
We find that the action suggested by the State is not warranted. The
Board
did not direct the Agency to provide detailed findings for all 74
failed
cases. In its ruling, the Board merely noted that the Agency had
agreed
to provide the detailed findings as part of its further review of
the case
records. Such agreement was not required by any Agency policy
or
procedure. The Agency was only required to provide detailed findings
up
to the point at which the State entered the reject zone. The
State
entered this zone when it failed nine cases through case #23.
The
Agency, however, provided detailed findings through case #76, where
the
State had failed 34 cases and the rejection number was 17. Thus,
the
Agency's decision not to provide detailed findings for all 163 cases
was
clearly within its discretion legally and makes sense from
an
administrative perspective given the substantial number of failed
cases
above the rejection number at case #76. 10/
Below, we review the findings with respect to the 32 contested
cases
through case #76 for which ACYF provided detailed findings and
reverse
ACYF's findings in only four cases. This means that there were
30
failed cases at case #76, including the two cases which the
State
conceded. Since the rejection number at case #76 is 17, there
were more
than enough failed cases at that point to find the State
ineligible.
The Agency's reference to various points at which its review
could have
stopped does not make the current disallowance defective.
Since at case
#76, the State had substantially more than the rejection
number
specified in the decision table, it is irrelevant whether the
Agency's
position was that its finding of ineligibility should be based on
the
review of the first 23 cases, of all 163 cases allegedly reviewed, or
on
something in-between.
We note, moreover, that the Agency's second review of the case
records,
following the Agency's determination that it could not sustain
its
finding of ineligibility based on its review of the first 13
case
records, does not constitute "harassment" of the State. It is
standard
operating procedure for the Agency to conduct a second review under
such
circumstances. Indeed, under its sequential sampling procedure,
the
Agency had no choice but to do so since there were neither
enough
acceptable cases to support a finding of eligibility nor enough
failed
cases to support a finding of ineligibility once the Agency
reversed
some of its initial findings. Whether it might be more
cost-effective
to formally review a larger number of records in the initial
review to
minimize the likelihood of a second review is a policy matter which
the
Board is not called upon to decide.
The State argued for reversal of ACYF's findings on several
grounds,
discussed separately below. The cases affected by each
argument are
indicated, with a case listed more than once if
applicable. The last
section includes miscellaneous arguments based on
the facts in each
case.
I. Lack of periodicity. [Case numbers 7, 10, 11, 23,
27, 36, 45, 51,
55, and 69]
The State argued that ACYF improperly found periodic reviews
and
dispositional hearings untimely for FY 1985 based on the absence of
a
review within the last six months plus 30 days of fiscal year 1984 or
a
hearing within the 18 months plus 30 days preceding FY 1985.
ACYF
failed such cases on the ground that, absent the earlier review
or
hearing, it could not determine whether the first review or
hearing
conducted in FY 1985 was timely. ACYF referred to this as a
failure to
establish "periodicity." The Act requires that periodic
reviews be
conducted "at least once every six months" and that
dispositional
hearings be held 18 months after placement and
"periodically
thereafter." The State's procedures provided for hearings
every 18
months. ACYF stated that the 30 days added on to the six- and
18-month
periods represented a grace period.
The State argued that since the triennial review was for FY 1985,
"the
only reasonable interpretation of the Act would be to assess whether
the
required reviews took place" during this fiscal year. State's
brief
dated June 2, 1987, p. 24. It noted that, in each case, the
requirement
of at least two periodic reviews within six months of each other
was
satisfied during FY 1985, and that a dispositional hearing was
held
during that fiscal year. The State further contended that in
retrospect
the children in question were not harmed by the failure to comply
in FY
1984 and earlier. It asserted that it was thus arbitrary and
capricious
for ACYF to fail the State in FY 1985 for acts that were required
to be
taken, but were not, in prior years.
We conclude that ACYF properly exercised its discretion in finding
the
cases out of compliance for failure to establish periodicity. That
the
Act contains specific requirements as to the timing of periodic
reviews
and dispositional hearings is clear. There is no way to
determine
whether the first review held in FY 1985 was timely without knowing
when
in FY 1984 the last review took place. Similarly, it is not
possible to
determine whether a hearing was due in FY 1985, and if so when,
without
knowing when the last hearing was held. If each year were
evaluated
without regard to past performance, then up to six months could be
added
to the six months the Act allows between periodic reviews, and
a
dispositional hearing might never be held. For example, the State
could
wait until March 30, 1985 to conduct a periodic review even if
no
periodic review was conducted in the last six months of FY 1984.
This
not only violates the specific requirements of the Act with respect
to
the timing of periodic reviews and dispositional hearings, but
also
frustrates congressional intent to prevent foster care "drift."
Thus,
although funds are separately appropriated for each fiscal year,
the
section 427 protections cannot be implemented if each fiscal year
is
viewed separately in evaluating a state's performance. 11/
The State contended that there was no foster care drift under
the
circumstances of individual cases in question. However, the fact
that
the statutory goal of preventing foster care drift may have been met
in
an individual case where the periodic review or dispositional
hearing
was late is not relevant since Congress chose to measure compliance
with
its goals in another way. See Wyoming Dept. of Health and
Social
Services, supra.
II. Exemption from dispositional hearing. [Case numbers 22,
24, 25,
38, 53, 55, 69, and 75]
The State argued that ACYF improperly failed cases in which there was
no
dispositional hearing or the dispositional hearing was late,
alleging
that the children were exempt from the dispositional hearing
requirement
under 45 C.F.R. 1356.21(e) (1983). That regulation provides
that--
(1) For those children who are placed in a
court sanctioned
permanent foster family home
placement with a specific care giver,
no
subsequent dispositional hearings are required during
the
continuation of that specific permanent
placement. If the foster
care placement
of such a child is subsequently changed, the
child
is again entitled to dispositional
hearings.
(2) For those children who are free for
adoption and are placed
in adoptive homes
pending the finalization of the adoption, no
subsequent dispositional hearings are required during
the
continuation of that placement. If
such a child is not adopted
within a
reasonable time after placement, the child is
again
entitled to dispositional hearings.
(Emphasis added.) ACYF did not dispute that dispositional hearings
were
not required for children in a court sanctioned permanent foster
family
home placement with a specific care giver or children in adoptive
homes
pending the finalization of the adoption. However, it asserted
that the
children in question here did not fall into either category.
We
conclude that in all cases but case #38, there was no basis
for
exemption from the requirement for a dispositional hearing. We
first
describe the facts of each case and then explain our reasoning.
In case #22, the court, after a hearing on 1/14/75, denied a petition
for
revocation of the child's commitment to the State. The record on
which its
determination was based included a study by the Department of
Children and
Youth Services (DCYS) which referred by name to the foster
family with whom
the child was placed. The child remained with the same
foster family
through FY 1985.
In case #24, there was an order terminating parental rights (TPR order)
on
9/21/76. A treatment plan dated 10/18/84 stated that the case plan
goal
was adoption but that the family with whom the child was living had
made no
commitment to adopt. The treatment plan referred to the
placement as
"therapeutic" or "specialized" foster care. The child
remained with
this family until 6/85.
In case #25, the child was committed to the State by court order
dated
6/15/78. The State's petition for commitment stated that the
child was
residing with a named foster family. The child remained with
this
family through FY 1985.
In case #38, parental rights were terminated on 12/20/83. On
6/30/84,
the child was placed with a family following completion of an
adoption
home study of that family. Treatment plans in 1984 and 1985
referred to
the situation as an "adoptive placement" or to the "adoptive
home," and
the child was adopted by the family on 7/2/86.
In case #53, the court ordered the child committed to the State.
The
State's petition for commitment stated that the child was living with
a
named foster parent. Later treatment plans for the child indicated
that
this was intended to be the child's permanent placement. The
child
remained with this individual through FY 1985.
In case #55, parental rights were terminated on 10/25/85 based on a
study
by DCYS which stated that adoption by the foster mother with whom
the child
had been living was planned. The child was adopted by this
individual
in 1987.
In case #69, the child was committed to the State on 12/8/77. The
child
remained with the same foster care family with whom he was living at
the
time of commitment until 8/26/85. In 10/85, he was placed with
his
grandmother, who became his legal guardian in 1986.
In case #75, the child was committed to the State on 3/2/76. The
record
on which the order of commitment was based stated that the child
was
living with a named foster parent. The child remained with
this
individual through FY 1985.
We find that none of these children was exempt from a
dispositional
hearing pursuant to 45 C.F.R. 1356.21(e) except case #38.
The criterion
to be applied to determine whether a child is in a court
sanctioned
permanent placement with a specified caregiver is clear from
the
preamble to the regulation, (as well as from the regulation
itself),
which states:
. . . the Department has concluded that under
two specific
circumstances a subsequent
disposition [sic] hearing is not
necessary. The first circumstance is when a court has
determined
that the child should remain
permanently in foster care with a
specified
foster family.
43 Fed. Reg. 23109 (1983) (emphasis added). The fact that the court
may
have known when it committed the child to the State (case #25, #53
and
#75), or continued the child's commitment (case #22), that the child
was
living with a particular foster family does not mean that the
court
determined that this was appropriate as a permanent placement. In
case
#69, it appears from the record that the court was not even aware of
the
child's specific placement, since the petition of neglect merely
states
that the child was living with "[a] licensed foster mother."
State's
appeal file, Ex. 69-1. 12/
The preamble to the regulation further states:
The second circumstance is a child who is
placed in a home
awaiting the finalization of
his adoption. To the extent that
this
child is free for adoption, placed in an approved home
for
the purpose of adoption and the child's
case plan goal is
adoption, a subsequent
dispositional hearing is not required,
assuming the child is adopted within a reasonable time
after
placement.
Id. In case #24, although the case plan goal was adoption, the
child's
placement with the family with whom he resided until 6/85 was not
made
for the purpose of adoption. 13/ In any event, this cannot
be
considered an adoptive placement which exempted the child from
any
dispositional hearing in FY 1985, since a hearing could have been
held
between 6/85 and the end of the fiscal year. In case #38, the child
was
free for adoption by virtue of the TPR order issued in 1983, the
case
plan goal was adoption, and the child was placed with the family for
the
purpose of adoption. ACYF asserted nevertheless that this was not
an
adoptive placement since the periodic reviews themselves "did not
note
progress toward adoption in a specified home." Agency's
supplemental
appeal file, Ex. 5, Case #38. However, there is no
apparent reason why
the criteria for an adoptive placement under the
regulation could not be
met even if the periodic reviews may have been
inadequate in this
respect. Thus, no dispositional hearing was required
in this case. In
case #55, the TPR order was not issued until FY
1986. Thus, a
dispositional hearing was still due in FY 1985.
III. Exemption from periodic review. [Case numbers 9,
11, 12, 33,
43, 46, 48, 49, 51,
66, 69, and 71]
The State argued that ACYF improperly failed these cases based on
the
absence or lateness of periodic reviews although the children were
in
court sanctioned permanent foster care placements with a
specified
caregiver or in adoptive placements pending finalization of the
adoption
within the meaning of 45 C.F.R. 1356.21(e). The State
asserted that
while this regulation "provides an exception only for the
conduct of
dispositional hearings in cases of permanent foster or
adoptive
placement, the regulation has been interpreted as applying to
the
conduct of periodic reviews." Appellant's brief dated June 2, 1987,
pp.
32-33. The State cited in this respect Maryland Dept. of
Human
Resources, supra.
The State's reliance on Maryland is misplaced. That decision
involved
reviews of Maryland's performance in FY 1982 and 1983. The
regulation in
question here was not promulgated in final form until May 1983,
well
into FY 1983. Thus, the question presented was whether, in the
absence
of any regulations, Maryland could reasonably interpret the
periodic
review requirement in the statute to not apply to children in
permanent
placements. Maryland, pp. 4, 13-14. Indeed, ACYF had
specifically said
it would apply reasonable state interpretations in the
absence of
regulatory interpretations. Any statements made by the Board
in that
decision must be viewed in this context.
Here, however, there was a regulation in place which stated a
general
requirement for dispositional hearings but further provided that
the
requirement did not apply under two specific circumstances.
Another
section of the regulation (45 C.F.R. 1356.21(c)) referred to
the
statutory requirement for periodic reviews but did not include
a
similar exception. Thus, the regulation does not permit an
inference
that periodic reviews were excused under the same, or
similar,
circumstances specified for dispositional hearings. Since the
Board is
bound by all applicable laws and regulations, 45 C.F.R. 16.14,
we
conclude that the absence or lateness of periodic reviews could not
be
excused in these cases on the ground that the children were in
permanent
foster care or adoptive placements.
Even assuming that children in permanent or adoptive placements
were
exempt from periodic reviews, the children in case numbers 12, 33,
43,
46, 48, 49, 66, 69, and 71 were not in such placements. 14/ In
case
#12, the State admitted that there was no TPR order until
11/20/85,
after the close of FY 1985. This was not an adoptive
placement under
the criteria discussed in section II. above since the child
was not free
for adoption. ACYF found that the placement in case #71 was not
an
adoptive placement on the ground that the TPR order dated 10/27/83
was
appealed on 12/9/83 and vacated on 1/1/86. ACYF stated that
its
policies provided that a placement could not be considered pre-
adoptive
pending the appeal of a TPR order. We agree that this was not
an
adoptive placement on the ground that the child was not free
for
adoption after the TPR order was appealed. In the remaining
cases
identified above, the State relied on a court order committing the
child
to the State or extending the child's commitment as showing that
the
child was in a permanent placement. However, as discussed earlier,
this
is not a determination by the court that the child's placement at
that
time was appropriate as a permanent placement..IV.
Miscellaneous.
[Case numbers 18, 20, 27, 52, 57, 58, 71, 74 and 76]
The State contended with respect to case #10 that there was
no
dispositional hearing between 3/1/83 and 10/1/84 to
establish
periodicity for the hearing on 11/28/84 because of
extenuating
circumstances (i.e., the State, wishing to consider the cases of
four
siblings together, filed one petition of neglect for all four, and
was
required to locate three fathers for the proceeding). However,
this
Board has previously held that the waiver of minor violations is
a
matter of Agency discretion. Arkansas Dept. of Human Services, supra,
p.
7. We see no reason to conclude that the Agency abused its
discretion
in declining to excuse the absence of a prior hearing on the
basis
argued by the State.
ACYF failed case #18 on the ground that the periodic review held on
1/7/85
was untimely. The prior review was held on 5/16/84, more than
six
months plus 30 days earlier. The State contended that a
dispositional
hearing held on 12/31/84 should be considered a timely
periodic review.
The 12/31/84 hearing was more than two weeks late,
even with the 30-day grace
period, however. We conclude that the Agency
did not abuse its
discretion in refusing to excuse this further delay.
Moreover, there was no
in-court hearing on 12/31/84; rather, this was
the date on which the court
approved a report on the child's status
submitted by DCYS. As noted by
the Board in Virginia Dept. of Social
Services, DGAB No. 596 (1984), there is
a substantial question whether a
paper review by a court can properly be
considered a dispositional
hearing (which can then be substituted for a
periodic review). We need
not decide this issue here, however, since
the 12/31/84 hearing was
clearly untimely.
ACYF failed case #20 on the ground that a periodic review held
12/10/85
was untimely, the prior review having been held on 3/27/85.
The State
argued that since the deadline for the review was 10/27/85--six
months
plus 30 days after the prior review--the timeliness of the review
was
not an issue in FY 1985, which ended on 9/30/85. We agree with
the
State that the case was in compliance in FY 1985. Since ACYF as
a
matter of policy gave states a 30-day grace period for
conducting
periodic reviews, it could not withdraw that grace period in
this
instance.
ACYF failed case #27 on the ground that there had been no periodic
review
between 3/1/84 and 10/1/84 which would have established
periodicity for the
first periodic review in FY 1985, held on 3/15/85.
The State contended that
periodic reviews were held on 3/6/84 and
9/13/84. ACYF took the
position that the document establishing that the
3/6/84 review was held (Ex.
27-3 of the State's appeal file) should not
be considered because it was not
in the child's case record when ACYF
conducted the second case record review
on August 31, 1987. It also
objected on the same grounds to
documentation of a periodic review held
on 9/18/85 (Ex. 27-8 of the State's
appeal file). Since ACYF had not
previously questioned whether the
9/18/85 periodic review was held, it
may have intended to object to
documentation of the 9/13/84 periodic
review (Ex. 27-5 of State's appeal
file), which would have established
periodicity for the 3/15/85 review.
In either case, we conclude that there is no basis for ACYF's
objection.
The State submitted the documents in question to the Board and
the
Agency with its brief dated December 7, 1987. In an affidavit,
an
attorney employed by the law firm representing the State stated that
she
obtained the documents submitted with that brief from case
files
provided by DCYS in response to her request to see the same files
which
ACYF had reviewed. Affidavit of Eileen P. Shannon dated January
19,
1988. Ms. Shannon further stated that she had no reason to believe
that
any additional documents relating to FY 1985 were placed in the
files
after the August review by ACYF. Absent any evidence to the
contrary,
we conclude that the documents were in fact in case record #27
during
the August review. Thus, Exhibit 27-5 is properly used to
establish
periodicity for the first FY 1985 periodic review in that case
and
Exhibit 27-8 is properly used to show that the State conducted a
second
timely periodic review in the case. 15/ Accordingly, ACYF should
have
found that this case complied with the section 427 requirements.
ACYF failed case #52 on the grounds that there was no
dispositional
hearing since FY 1982 and that the second periodic review held
in FY
1985 was untimely. The State contended that a hearing was held
on
6/26/84. However, the document referred to by the State in support
of
this contention (Ex. 52-1 of the State's appeal file) is merely a
letter
from DCYS dated 6/26/84 forwarding to the court a report on the
child's
status in response to the court's request. Absent any evidence
that a
hearing was held on that date, ACYF's determination that this case
was
out of compliance must be upheld. Furthermore, the State
acknowledged
that the periodic review held on 9/24/85 was late, albeit by
only three
days taking into account the 30-day grace period. We do not
find that
the Agency abused its discretion in not waiving this further
delay.
ACYF failed case #57 on the ground that there was no dispositional
hearing
held since FY 1983. The State contended that a dispositional
hearing
was held on 9/9/84. The State's documentation establishes that
this was the
date on which the court received a report on the child's
status from DCYS in
response to the court's request. The court approved
the report on
9/17/84; however, the court at the same time raised
several questions
regarding the child's status which DCYS was required
to answer in an "amended
written report" due on 12/26/84. Even
assuming that a paper
review by the court can properly be considered a
dispositional hearing, we
conclude that the court's review and approval
of the report did not
constitute a dispositional hearing. Section
475(5)(C) of the Act
specifies that the purpose of a dispositional
hearing is to "determine the
future status of the child." Here,
however, the court indicated that it
did not have sufficient information
regarding the child's status and thus
could not make a meaningful
determination regarding the child's status at the
time it approved the
report. Accordingly, ACYF properly found this case out
of compliance.
ACYF failed case #58 on the ground that the periodic review held
on
2/15/85 was more than six months plus 30 days after the
child's
placement in foster care on 6/21/84. The State contended that
a
10/23/84 hearing which resulted in the child's commitment to the
State
could be considered a timely periodic review. ACYF argued that if
this
dispositional hearing was substituted for a periodic review, the
next
review on 8/15/85 would be untimely. This overlooks the
uncontroverted
fact that a periodic review was held on 2/15/85. No
reason appears why
more than two periodic hearings may not be held within a
single fiscal
year as long as there is no more than six months (plus 30 days)
between
any two consecutive reviews and periodicity has been established for
the
first review. Accordingly, ACYF should have found that this
case
complied with the section 427 requirements.
ACYF failed case #71 on the ground that there were no periodic
reviews
after 6/28/84. The State contended that various court hearings
could be
considered timely periodic reviews. However, there is no
evidence in
the record of the hearing alleged to have been held on
9/13/84. The
documents relied on by the State (Ex. 71-6 and 71-7 of the
State's
appeal file) are merely social worker's reports captioned
"Judicial
Review for the Superior Court for Juvenile Matters"--the first
dated
9/12/84 and apparently submitted to the court on 9/13/84 and the
second
undated. The next hearing--on 3/12/85--was untimely even if
it
constituted a periodic review. Accordingly, ACYF properly found
this
case out of compliance.
ACYF failed case #74 on the ground that the periodic review held
on
8/14/85 was more than six months plus 30 days after the
child's
placement on 8/17/84. The State contended that there were
hearings on
12/14/84 and 1/22/85, either of which constituted a timely
periodic
review. The State's documentation includes a notice issued by
the court
on 12/18/84 of a "continued neglect trial" on 1/22/85.
State's appeal
file, Ex. 74-6. However, there is no evidence that this trial,
or
hearing, was in fact held. There is also no direct evidence of
a
hearing on 12/14/84. Even if a hearing was held on 12/14/84, and
that
hearing was properly substituted for a periodic review, the
periodic
review on 8/14/85 would be untimely. Accordingly, ACYF
properly found
this case out of compliance.
ACYF failed case #76 on the ground that the periodic review held
on
3/21/85 was more than six months plus 30 days after the prior review
on
8/10/84. It took the position that a "family care review" conducted
on
10/25/84 at the foster care institution where the child resided did
not
meet the statutory requirements for a periodic review. Section
475(5)(B)
requires that a child's status be reviewed periodically "by either
a
court or by administrative review. . . ." "Administrative review"
is
defined in section 475(6) as "a review open to the participation of
the
parents of the child, conducted by a panel of appropriate persons
at
least one of whom is not responsible for the case management of, or
the
delivery of services to, either the child or the parents who are
the
subject of the review." The family care review report (Ex. 76-3 of
the
State's appeal file) states that "[t]he Family Care Review is a
meeting
of our treatment staff, the funding or referring source, the parents
of
the child, and at times, the child in residence. The purpose of
this
review is to evaluate progress made and to plan for the future."
The
State's evidence inadequate is to show this was an administrative
review
since the evidence does not show that the review panel included
anyone
who was not responsible for the case management or delivery of
services
to the child or parents. Accordingly, ACYF properly found this
case out
of compliance.
Conclusion
For the foregoing reasons, we sustain ACYF's determination that the
State
was ineligible for FY 1985 section 427 funds but remand the appeal
with
respect to the title IV-E disallowance to permit ACYF to determine
the amount
claimed for children who were afforded the section 427
protections, and to
reduce the disallowance accordingly (see pp. 11-12).
________________________________ Judith
A.
Ballard
________________________________
Cecilia
Sparks Ford
________________________________ Donald
F.
Garrett Presiding Board Member
1. The State argued that the Agency "acted
arbitrarily and
capriciously by basing its determination on only thirteen
case files out
of the approximately 2,300 children in foster care who met the
review
criteria." State's brief dated June 2, 1987, p. 13. This
argument was
apparently based on the observation of an expert for the State
that
sequential sampling permits "a less accurate estimation of the
findings"
than would be obtained using a standard sampling technique.
Affidavit
of Walter Pawelkiewicz, Ph.D., State's Appeal file, Ex. H, p.
2.
However, the purpose of the Agency's sequential sampling methodology
is
merely to determine with near certainty whether more than 10% of
the
State's records are unacceptable, not to estimate the actual
failure
rate with any particular degree of certainty. See Declaration
of
Charles P. Gershenson, Agency's appeal file, Ex. 5, pp. 5-6.
Moreover,
as discussed later, there were substantially more failed cases than
the
number required by the decision table to determine that the State
was
ineligible.
Finally, the State's argument was made when the Agency's finding
of
ineligibility was based on a review of only 13 cases, while,
as
explained later, our conclusion that the State was ineligible is
based
on a review of the first 76 cases in the sample. Thus, even if
the
State were correct that the accuracy of the decision table
increases
with the number of cases reviewed (a proposition that the State
failed
to establish), the facts on which the State's objection to the use
of
sequential sampling was based have changed.
2. The table of random numbers which ACYF stated it
used, at Ex. 3
of the Agency's supplemental appeal file, is one of many
available
tables.
3. The State indicated that it had no reason to
believe that the
Agency deliberately biased the review, (nor did it allege
that it had
any reason to suspect that ACYF, which routinely used a random
number
table in its section 427 reviews, made some error in how it used
the
table here). Indeed, since ACYF reordered the cases before it
started
the review, it clearly did not do so with the knowledge that
reordering
the cases in some manner might have a less favorable outcome for
the
State.
4. The State took the position that the statements
made by Dr.
Gershenson should not be considered by the Board because they
were
predicated on Agency findings which were not supported by the
record.
However, the precise number of non-complying cases found by the
Agency
is irrelevant; the point is that one random sequence is as likely
to
yield the same result as another.
5. In Maryland, the Board also found that, in
establishing the 80%
compliance standard, ACYF was merely instructing
regional staff on how
they should measure states' performance, and that the
Commissioner of
ACYF retained discretion to find a state's case review
system
satisfactory even if the state did not meet the 80% standard.
The Board
concluded that since the compliance standard was not intended as
a
binding norm, it was not a legislative rule subject to notice
and
comment rulemaking requirements. The 90% compliance standard may
not
have been applied by ACYF in the same way here, however, since an
August
13, 1986 letter from the Commissioner, ACYF, to the State stated that
".
. . the level of acceptable cases in a triennial review . . . has
been
established by the Secretary to be ninety percent." State's brief
dated
June 7, 1987, p. 54, quoting State's appeal file, Exh. J.
6. The Agency asserted that the 90% compliance
standard for
triennial reviews was reasonable because of the states'
increased
experience in the section 427 program. Agency's brief dated
October 5,
1987, p. 10. Fiscal year 1985 was the State's fifth year
of
participation in the section 427 program.
7. The State cited case law requiring a weighing of
interests in
order to determine whether retroactive application of a rule
or
guideline is permissible. The State, however, did not establish
any
compelling interest justifying prior notice in this instance. While
it
might have been desirable here for the Agency to have kept the
State
apprised of the details of its program administration, including
its
intent to apply a 90% standard in enforcing the requirements of
section
427, this interest is clearly outweighed by the Agency's interest
in
assuring that all children in foster care were afforded the
protections
required by section 427.
8. These findings pertained to the three "major"
safeguards required
by section 427: a case plan, a periodic review, and
a dispositional
hearing. The Agency also stated that certain "minor"
safeguards were
not met in some of the failed cases. Since the Agency did not
identify
the minor safeguards allegedly not present in each case, however,
the
cases cannot properly be found out of compliance on that basis.
9. The rejection number is 17 at case #76 and 30 at case #163.
10. The Agency contended that, although detailed
findings for all
failed cases were not part of the record before the Board,
the State
knew from its participation in the review why each case was
failed. We
need not address this issue since there is ample basis on
the record
before us to find the State ineligible.
11. Since the FY 1985 review was a triennial review,
meaning that
the year most recently reviewed was FY 1982, the State was not
penalized
twice for its failure to hold the periodic review or
dispositional
hearing which was due prior to FY 1985. We do not here
reach the
question whether a case could properly be failed for lack of
periodicity
where the case was in effect failed on the same basis in two
successive
years.
12. The State asserted that "ACYF has found that a
permanent foster
family home placement with a specific care giver is court
sanctioned
where the court has knowledge that a child is in a foster home
with a
particular family, and approves the continuation of that
placement.
ACYF File at Attachment 3, Case Sample #51." State's brief
dated
December 7, 1987, pp. 17-18, n. 12. The document
cited by the State
states that "the child was in either a court specified
foster permanent
home or a pre- adoptive placement. . ." and that therefore
no
dispositional hearings were required. However, it does not contain
the
specific finding alleged by the State. Moreover, the specific
findings
in several other cases make it abundantly clear that this is not
ACYF's
position. (See Agency's supplemental appeal file, Ex. 5, case
#18, #22,
#33, #48, #49 and #55.)
13. The State asserted that "ACYF considers a
placement to be
pre-adoptive if there is evidence that parental rights have
been
terminated and a goal has been identified to pursue adoption by
a
specific, designated family." State's brief dated December 7, 1987,
p.
18, n. 12. This characterization of ACYF's position, for which
the
State offered no support, omits a third criterion clearly required
by
the regulation--that the child have actually been placed in the home
of
the family which intends to adopt him or her. In any event, case
#24
does not meet the criteria articulated by the State since there
was
never a goal to pursue adoption by the family in question.
14. ACYF asserted that the placement in case #9 was
not pre-
adoptive because there was no TPR. However, the record
includes a TPR
order dated 3/20/84. State's appeal file, Exhibit 9-5
(submitted with
State's brief dated June 2, 1987). ACYF did not dispute
that case #11
involved a pre-adoptive placement nor that there was a
pre-adoptive
placement in case #51 during the time that a periodic review
to
establish periodicity should have been held.
15. In view of our conclusion that the documents were in
the case
record during the August review, we need not decide whether
documents
added to the case record subsequent to that date could properly
be
considered in determining whether the case was in compliance with
the
requirements of section