Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Appellate Division
SUBJECT: New York
State
DATE: July 21, 1993 Department of
Social
Services Docket Nos. 91-98, 91-99 A-92-045,
A-92-187,
A-92-188, A-92-228,
A-93-116 Decision No. 1428
DECISION
The New York State Department of Social Services (New York) appealed
a
series of disallowances by the Administration for Children and
Families
(ACF) under title IV-E of the Social Security Act. 1/ Title
IV-E funds
foster care maintenance payments on behalf of children who
would
otherwise be eligible for title IV-A (Aid to Families with
Dependent
Children). New York here claimed reimbursement for title
IV-E
administrative costs pursuant to a proposed amendment to its
cost
allocation plan (CAP). While the disallowances were pending,
the
Department of Health and Human Services (HHS) Division of
Cost
Allocation (DCA) partially disapproved the CAP amendment. New York
then
appealed DCA's determination to the Board as well (docketed as DAB
No.
A-92-228). This decision encompasses both New York's appeal of
ACF's
disallowances and its appeal of DCA's partial disapproval of its
CAP
amendment.
The CAP amendment at issue covers costs incurred for the activities
of
Child Protective Services (CPS) workers who provide services to
children
for whom there is reasonable cause to suspect abuse or
maltreatment.
With its CAP amendment, New York sought reimbursement for ten
categories
of activities performed by CPS workers. DCA determined that
four of the
activities were not allowable title IV-E activities under the
applicable
regulations. As to the remaining six activities, DCA
determined that
they were allocable to title IV-E only if they were performed
on behalf
of children who were candidates for title IV-E. DCA deferred
to ACF for
a determination as to which children should be considered
candidates.
ACF consistently maintained in the disallowances and before the
Board
that only activities performed on behalf of candidates as documented
in
a manner consistent with its policy announcement, ACYF-PA-87-05,
would
be allowable and that New York could not consider all children for
whom
there was reasonable cause to suspect abuse or maltreatment to
be
candidates for title IV-E.
We conclude that DCA and ACF's positions are fully consistent with
title
IV-E, its implementing regulations, and ACYF-PA-87-05. New
York's
position, on the other hand, is inconsistent with the
applicable
authorities and unreasonable in light of the purposes of the
IV-E
program. As discussed in the three sections of our analysis:
o The four activities disapproved by DCA are not
allowable
title IV-E activities because they are not identified in
the
regulations as allowable administrative activities and are
not
activities which are unique to title IV-E or which further
its
specific, limited purposes.
o As to the six activities DCA approved, the standard which
New
York used to determine which children were candidates for
title
IV-E services is not consistent with title IV-E, the
regulations
and ACYF-PA-87-05.
o None of the ten activities are part of New York's title
IV-E
eligibility determination process.
The administrative activities for which New York seeks reimbursement
in
this appeal contrast sharply with the limited purposes of title
IV-E.
The activities include those taken at the first stages of a child
abuse
prevention system: investigating, assessing, and documenting
the
circumstances of the child. Further, the vast majority of children
for
whom these activities are performed will never be placed in foster
care
and almost two-thirds will be found not to have been abused
or
maltreated. Thus, New York seeks reimbursement for activities
which
precede any determination that a child may have to be placed in
foster
care and which are undertaken on behalf of many children who
are
ultimately determined to be at no risk of foster care.
Below we review the CAP process, title IV-E, and the factual background
of
this case. We then explain why we uphold DCA's determination
concerning
New York's CAP amendment and why we uphold ACF's
disallowances in
principle. ACF agreed that, in the event the Board
upheld its
disallowances, it would be willing to reduce the
disallowances by the amount
of costs that New York can document in a
manner consistent with DCA's
decision and the requirements of applicable
authorities including
ACYF-PA-87-05. We therefore remand this case to
ACF to make that
determination.
The Cost Allocation Plan Process
A state participating in the various public assistance programs under
the
Act, including title IV-E, is required to make determinations as to
the
amount of commonly incurred expenditures, such as staff time, that
are
attributable to each program that the state administers. A state
is
required to submit a plan for cost allocation to the Director, DCA,
in
the appropriate HHS regional office. 45 C.F.R. . 95.507(a).
This cost
allocation plan is defined as "a narrative description of the
procedures
that the State agency will use in identifying, measuring, and
allocating
all State agency costs incurred in support of all programs
administered
by the State agency." 45 C.F.R. . 95.505. The CAP
must contain
sufficient information to permit the DCA Director to make an
informed
judgment on the correctness and fairness of the state's procedures
for
identifying, measuring, and allocating all costs to each of the
programs
administered by the state agency. 45 C.F.R. .
95.507(a)(4).
Amendments to a CAP must be submitted to DCA (45 C.F.R. . 95.509), and,
if
DCA disapproves the amendment, a state may seek reconsideration of
the DCA
decision by the HHS Regional Director, 45 C.F.R. . 75.5. A
Regional
Director's negative determination may be appealed to the Board.
45 C.F.R. .
75.6(c). Pending DCA's action on an amendment, a state may
claim
federal financial participation (FFP) pursuant to the amendment
unless
otherwise advised by DCA. 45 C.F.R. . 95.517. . Title IV-E
Title IV-E, originally enacted by the Adoption Assistance and
Child
Welfare Act of 1980, Public Law No. 96-272, authorizes appropriations
to
enable states "to provide, in appropriate cases, foster care . . .
for
children who otherwise would be eligible for assistance" under a
state's
title IV-A program. 2/ 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 the following conditions on the
receipt
of title IV-E 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). 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 administrative
expenses. As
to administrative expenses, section 474(a)(3)(C) provides
funding for
expenditures "found necessary by the Secretary . . . for the
proper and
efficient administration of the State plan . . . ."
ACF's regulations implementing title IV-E are codified at 45 C.F.R.
Part
1356 (1983). Section 1356.60(c) concerns allowable
administrative
costs. 3/ It provides for reimbursement of state
administrative
expenses incurred to fulfill the unique requirements of title
IV-E. For
example, section 1356.60(c)(2) provides for reimbursement for
referral
to services, preparation for and participation in
judicial
determinations, and development of the case plan.
Additionally, the
regulations recognize that the state must engage in a range
of
administrative activities customarily required by maintenance
payment
programs. Therefore, sections 1356.60(c)(1) and (2)
provide
reimbursement for eligibility determinations, case management
and
supervision, and case reviews.
ACF provided guidance to states concerning title IV-E
administrative
expenses in ACYF-PA-87-05 (which was issued in 1987).
ACF Exhibit (Ex.)
1. ACYF-PA-87-05 identifies two main categories of
title IV-E
administrative costs: costs for eligibility determinations and
other
allowable costs. ACYF-PA-87-05 provides that the costs of
determining
and redetermining eligibility are reimbursable even for
negative
eligibility determinations. As to other allowable costs,
ACYF-PA-87-05
states that FFP is available for the administrative costs
listed at 45
C.F.R. . 1356.60(c) but is limited to "those individuals the
State
reasonably views as candidates for title IV-E foster care
maintenance
payments." (Emphasis added.) It also sets forth ways
in which a state
can document that a child is a candidate for title IV-E.
Factual Background
On March 28, 1989, New York submitted a proposed amendment to its CAP
to
DCA. With this amendment, New York sought to claim under title
IV-E
certain administrative costs incurred for protective services.
The CAP amendment concerned the activities performed by State
employees
responsible for investigating complaints of child abuse or
maltreatment.
In New York, such complaints are first received by the State
Central
Registry of Child Abuse and Maltreatment (SCR) and are screened
by
trained SCR personnel. If the SCR interviewer determines there
is
reasonable cause to suspect abuse or maltreatment as defined by 18
New
York Code of Rules and Regulations (N.Y.C.R.R.) . 432.1(a) and (b),
the
interviewer prepares an SCR report which is immediately transmitted
to
the Child Protective Services (CPS) unit of the appropriate Local
Social
Services District. The responsibilities of a CPS unit are set
forth in
18 N.Y.C.R.R . 432.2. New York Ex. 1. They include
receiving suspected
abuse reports; commencing an investigation of the report
within 24 hours
of receipt; determining, within 90 days (within 60 days as of
January 1,
1992), whether the report is "indicated" or "unfounded"; 4/ taking
a
child into protective custody; providing or arranging for other
services
to the family or child; placing a child in foster care; initiating
a
family court proceeding; and either operating as the primary
service
provider in preventive services or foster care cases or monitoring
such
cases.
With this CAP amendment, New York is seeking to recover costs incurred
for
certain activities of CPS workers. The CAP does not involve New
York's
costs for the activities of its SCR workers.
New York proposed to allocate these costs to title IV-E pursuant to
a
Random Moment Study (RMS) which measures the amount of time CPS
workers
spend performing different activities. 5/ The activities for
which New
York sought reimbursement were divided into ten categories of
activities
typically performed by CPS workers. New York took the
position that all
children who were subject to an SCR report and who had not
been
determined to be ineligible for title IV-E should be
considered
candidates for title IV-E. New York's CAP amendment
allocated all costs
of the ten activities performed by CPS workers on behalf
of such
children to title IV-E. (The CAP amendment also sought to
allocate
costs which were not reimbursable under title IV-E to the
Emergency
Assistance to Families (EAF) program under title IV-A of the
Act. DCA
has not yet made a determination as to the EAF portion of the
CAP
amendment.)
Pending DCA's action on the amendment, New York claimed
these
administrative expenses pursuant to its proposed amendment. See
45
C.F.R. . 95.517. ACF disallowed New York's claims even though New
York
had a pending CAP amendment because ACF concluded that the
claims
covered costs for activities that were clearly unallowable under
the
program. Additionally, ACF concluded New York could not
reasonably
categorize all children subject to an SCR report as candidates for
title
IV-E. While ACF acknowledged that New York's claims may
include
allowable expenses as well, it maintained that, from the data
supplied
by New York, it could not identify what portion of the claims
was
allowable. New York appealed these disallowances to the Board.
On February 5, 1992, DCA issued its decision on New York's
proposed
amendment. New York Ex. 25. DCA determined that four of
the ten
categories of activities performed by CPS workers were not
allowable
administrative expenses under title IV-E: processing State
Central
Registry forms; determining the nature, extent, and cause of
injuries;
risk assessment; and arranging for other services. DCA
determined that
the remaining six categories involved the type of activity
that would be
allowable under the regulations for those children considered
candidates
for title IV-E. These six categories were: arranging
for foster care;
supervisory consultation/conference; family court
proceedings; preparing
and maintaining Welfare Management System (WMS)/Child
Care Review
Service (CCRS) documentation; preparing and maintaining case
record
documentation; and case management/monitoring services. New
York
appealed DCA's decision to the HHS Region II Director. New York
Ex. 26.
On July 23, 1992, the Regional Director affirmed DCA's
decision. New
York appealed the Regional Director's decision to the
Board.
The Board consolidated the CAP amendment appeal with New York's appeals
of
ACF's disallowances of the claims New York made pursuant to the
CAP
amendment. During Board proceedings, ACF and DCA have
consistently
stated that only those costs recognized by the approved CAP
would be
allowable administrative costs under title IV-E. Further,
although ACF
asked us to uphold the disallowances, it has agreed to reduce
the
disallowances to the extent that New York can document the claims in
a
manner consistent with the approved CAP and with ACYF-PA-87-05.
See
Letter from Counsel for Respondents dated February 21, 1992.
Analysis
Below, we discuss our conclusions that (1) DCA reasonably determined
that
four of New York's RMS activity categories involved costs which are
not
allowable as title IV-E administrative expenses; (2) as to the six
allowable
categories, New York could not reasonably categorize all
children subject to
an SCR report as candidates for title IV-E; and (3)
the costs associated with
all ten categories of the RMS were not
allowable under 45 C.F.R. .
1356.60(c)(1) as costs of determining
eligibility for title IV-E. We
conclude that ACF and DCA's positions
with respect to these issues are fully
supported by the Act, the
regulations, and applicable policy guidance.
The positions are also
entirely consistent with the purposes behind the title
IV-E program.
New York's position, on the other hand, is inconsistent with
the
applicable authorities and unreasonable in light of the limited
purposes
of the IV-E program. .
1. Four of New York's RMS activity
categories are not reimbursable
under title IV-E for any children.
DCA determined that the following activities performed by the CPS
workers
were not reimbursable as title IV-E administrative expenses. 6/
01. Processing SCR Forms. Activities attributable
to
processing State Central Register report forms.
Includes
receiving, assigning, and/or completing forms--both initial
and
subsequent reports.
02. Determining Nature, Extent, and Cause of
Injuries.
Activities attributable to reviewing allegations of child
abuse,
neglect, and/or maltreatment. Includes assessment of
the
nature, extent, and cause of conditions that constitute abuse
or
maltreatment.
03. Risk Assessment. An evaluation of the environment of
the
child named in the report and any other children in the home
and
a determination of the risk to such children if they continue
to
remain in the existing home environment. Includes foster
care
case planning activities.
05. Arranging for Other Services. Activities attributable
to
determining other (than placement) service needs
and
identifying, utilizing, and coordinating services available
in
the community or provided by the local district to assist in
the
amelioration of personal problems, behavior or home
conditions.
Includes case planning activities for other services.
In reaching this conclusion, DCA relied on 45 C.F.R. .
1356.60(c)(2),
which sets forth examples of allowable administrative
expenses. It
provides in pertinent part:
(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;
* * *
DCA argued that the costs of these four disputed CAP activities
were
unallowable because they were neither listed in the regulation
as
allowable costs nor closely related to a listed allowable cost.
New York argued that the costs of these activities were allowable
because
(1) the activities were part of its eligibility determination
process and (2)
the activities were necessary to comply with the
mandates of title IV-E,
i.e., that the state make reasonable efforts to
prevent the removal of the
child, that the state develop a case plan for
each child, and that the state
obtain judicial determinations that
continuation in the home would be
contrary to the welfare of the child.
Also, as to "arranging for other
services," New York argued that this
activity was essentially the same as the
activity of "referral to
services" listed in 45 C.F.R. .
1356.60(c)(2)(i).
We conclude that New York's arguments lack merit for several
reasons.
First, these activities are not specifically listed in 45 C.F.R.
.
1356.60(c) as allowable costs, nor are they closely related to a
listed
activity. Second, the activities are not unique to the title
IV-E
program and do not further the specific, limited purposes of the
title
IV-E program. Third, as discussed in the last section of the
decision,
these activities are not part of New York's eligibility
determination
process for title IV-E.
The regulation at 45 C.F.R. . 1356.60(c)(2) lists nine examples
of
allowable administrative costs. Unless an activity is
specifically
listed or is closely related to a listed cost, New York could
not
reasonably consider 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. See Missouri Dept. of Social Services, DAB No.
844, at 17
(1987). New York's activity categories of determining the
nature,
extent and cause of injuries; risk assessment; processing
investigation
forms; and arranging for other services are not identified in
section
1356.60(c)(2) as allowable administrative costs, nor are they
closely
related to activities that are identified in the regulation.
Thus, New
York could not reasonably consider any of the disputed activities
to be
reimbursable under the regulations.
New York's disputed activities differ in both function and purpose
from
the activities listed in section 1356.60(c)(2). Two of the
disputed
activities (determining the nature, extent and cause of injuries;
and
risk assessment) necessarily occur at the initial stages of
an
investigation of alleged abuse or maltreatment. Their function is
to
gather and assess information concerning possible abuse or
maltreatment
and the need for foster care placement. In contrast to
those
activities, section 1356.60(c) lists activities which the state
must
engage in after its investigation and risk assessment. 7/
Their
function is to assist children who have been placed in foster care
or
who have been identified as candidates for foster care.
The activity of processing SCR forms involves documenting the
worker's
investigation and ultimate determination in New York's child
abuse
tracking system. The activity most closely related to maintenance
of
documentation listed in 45 C.F.R. . 1356(c)(2)(iv) is "development
of
the case plan." The primary function of a foster care case plan is
to
ensure that children are not needlessly removed to or needlessly held
in
foster care. In contrast, the primary function of an SCR form is
to
allow New York to operate a central tracking system on abused
or
neglected children. 8/ DCA approved the type of documentation
activity
listed in 45 C.F.R. . 1356.60(c)(2)(iv) by approving two other
CAP
amendment categories, i.e., maintenance of WMS/CCRS documentation
and
maintenance of case record documentation).
While New York argued that "arranging for other services" was
equivalent
to "referral to services," as listed in section 1356.60(c)(2)(i),
we
conclude that ACF reasonably distinguished between "arranging for"
and
"referring to" services. As pointed out by ACF, "arranging"
and
"referring" are two different activities. Transcript (Tr.) of
hearing
conducted March 4, 1993 in this appeal at 158-159; 183-188.
Referring
could reasonably be read as limited to providing information to
the
individual so that the individual can obtain the services.
Arranging
for services might reasonably involve many different kinds of
activities
on behalf of an individual. At its broader reaches,
"arranging" for
social services could become a social service in
itself. Expanding
"referring" to the types of activities that could be
considered
"arranging" would open the program up to a variety of expenses
that are
difficult to define and that exceed the parameters of a referral.
9/
A review of the CAP amendment description of "arranging" supports
DCA's
conclusion that the CPS workers are engaged in more than
simply
providing information to individuals. The CAP amendment
describes this
category as "Activities attributable to determining other
(than
placement) service needs and identifying, utilizing, and
coordinating
services . . . ." Further, in cases in which the CPS
workers are the
primary service providers, 18 N.Y.C.R.R. . 432.2(b)(4)(viii)
charges CPS
workers with "identifying, utilizing and coordinating other
services"
and mandates that the CPS workers "shall ensure that the
roles,
responsibilities and tasks of all service providers are clearly
defined
and that the established plan of service is being implemented."
These
functions clearly go beyond what would ordinarily be thought of as
a
"referral." 10/
Accordingly, we conclude that funding for these four categories
of
activities is clearly not authorized by section 1356.60(c). New
York
also argued, however, that the activities should be covered because
they
were necessary to comply with the mandates of title IV-E, i.e., that
the
state make reasonable efforts to prevent the removal of the child,
that
the state develop a case plan for each child, and that the state
obtain
judicial determinations that continuation in the home would be
contrary
to the welfare of the child. New York asserted that the
information,
risk assessment, and documentation generated by these activities
were
the basis for the worker's decision about removal and the basis for
the
case plan if the child was removed. New York argued that
these
activities therefore constituted the necessary developmental
foundation
for reasonable preventive efforts, for an effective case plan, and
for
ensuring that children were removed from their homes only
when
continuation in the home was contrary to their welfare.
We reject New York's arguments on program purpose because we conclude
that
the disputed activities are not unique to the title IV-E program
and do not
further the specific limited goals that program was designed
to meet.
Our specific reasons are as follows:
o While the federal government participates in funding
many
different types of child welfare programs, states retain
primary
responsibility for the safety and welfare of the children
who
live within their jurisdictions. Staff of House Comm. on
Ways
and Means, 102d Cong., 2d Sess., Overview of
Entitlement
Programs 839 (Comm. Print 1992). To that end, states
fund and
administer a range of child welfare services including
child
abuse reporting systems, child abuse investigation
systems,
protective services, preventive services, foster care,
and
adoption services.
o Title IV-E is a program of limited purposes; its
primary
component involves funding maintenance payments for children
in
foster care who would otherwise be eligible under title
IV-A.
It is at the far end of a continuum of government programs
which
seek to ensure that children are not abused or maltreated.
11/
New York did not identify any authority to indicate
that
Congress intended title IV-E to participate in the costs of
the
initial stages of a state's child abuse prevention system,
i.e.,
the process of identifying children who had been subjected
to
abuse or maltreatment. These activities are integral to
New
York's child welfare services system and would have
occurred
even if title IV-E did not exist.
o The disposition statistics on SCR reports indicate how
remote
these activities are from the purpose of title IV-E.
The
overwhelming majority of children on whose behalf New
York
conducts SCR investigations are never placed in foster care
and
approximately two-thirds of the SCR reports are determined to
be
unfounded, i.e., the worker determines that there is no
credible
evidence that abuse or maltreatment exists. (See the
discussion
of the SCR report disposition statistics at page 20-22 of
our
decision.)
o The title IV-E regulations limit FFP primarily to costs
which
are incurred after a decision has been made that the
child
should be placed in foster care. For example, preparation
for
and participation in judicial determinations; placement of
the
child; development of the foster care case plan; case
reviews;
case management and supervision (all listed in the
regulations
as allowable title IV-E activities) are all activities that
are
related to placement in foster care. Had ACF considered
initial
investigative activities to be part of title IV-E, they
would
presumably have been identified in the regulations.
Accordingly, we conclude that DCA properly determined that these
four
categories of activities were not allowable administrative expenses
and
should not be allocated to title IV-E under the CAP. While, as
we
indicated in footnotes 7 and 10, there may be discrete activities
within
two categories that perhaps may be allowable under
section
1356.60(c)(2), New York here proposed categories of activities in
its
RMS system that were either clearly over broad or
completely
unauthorized. In a previous Board decision, which New York
cited
extensively in this appeal, we emphasized that descriptions of
allowable
title IV-E administrative activities in a state's CAP must be as
clear
and as detailed as necessary to ensure that only those
activities
authorized by regulation are allocated to the IV-E program.
See
Missouri, DAB No. 844, at 14-19.
2. The remaining six categories at issue here are
allowable
under title IV-E only if performed on behalf of title
IV-E
candidates. Moreover, New York could not reasonably
consider
all children who are the subject of an SCR report to
be
candidates.
DCA determined that, for those children considered candidates for
title
IV-E, six of the RMS categories involved allowable
administrative
activities under title IV-E. As to the question of which
children
should be considered candidates, DCA deferred to ACF. Relying
on
ACYF-PA-87-05, ACF concluded that an SCR report did not
constitute
documentation of title IV-E candidacy under ACYF-PA-87-05, and New
York
could not reasonably consider all children who were the subject of
an
SCR report as candidates.
The six categories of activities which DCA approved if performed on
behalf
of title IV-E candidates were:
04. Arranging for foster care. Activities attributable
to
removing the child from his home and making arrangement
for
placement--both emergency and non-emergency care.
Includes
discussion with parents, agencies, and foster parents
regarding
the need for and availability of placement.
06. Supervisory consultation/conference.
Activities
attributable to supervisory review of child protective
service
worker case work decisions. Activities can include
worker
participation in supervisory/case management reviews of
case
service plans.
07. Family Court Proceedings. Activities related to
Family
Court proceedings including preparing Court petitions,
other
documents, and Court-ordered studies and participating in
Court
proceedings.
08. Preparing and Maintaining WMS/CCRS [Welfare
Management
System/Child Care Review Service] documentation.
Activities
attributable to the preparation and maintenance of
applications,
authorizations or any other WMS/CCRS required
documentation.
09. Preparing and maintaining case record
documentation.
Activities attributable to the preparation and
maintenance of
case record documentation (other than Code 08).
Includes
preparation and maintenance of UCR forms, progress notes,
memos,
letters or other documentation pertaining to the case.
10. Case management/monitoring services. Activities which
are
attributable to the management/monitoring of services
provided
to or on behalf of protected children when the worker is not
the
primary service provider for the case. Activities include
steps
taken by the case manager/monitor to insure that the
case
service plans are adequately established and implemented
in
accordance with service requirements.
New York argued the definition of candidate set forth in ACYF-PA-87-05
was
contrary to the Act and the regulations as interpreted in Missouri,
and
excluded activities a state must engage in whether or not these
children
become title IV-E recipients. As an alternative to the
candidacy
standards set forth in ACYF-PA-87-05, New York took the
position that every
child who is the subject of an SCR report and who
has not been determined to
be ineligible for title IV-E is a candidate.
In support of its position, New York presented at the hearing in
this
appeal extensive evidence concerning its SCR system and the
training
given SCR screeners. Under this system, an SCR report is
not
transmitted to a local district CPS for investigation unless an
SCR
interviewer determines that there is reasonable cause to suspect
abuse
or maltreatment of a child. Further, the majority of SCR reports
are
filed by "mandated reporters," i.e., teachers, doctors, and others
who
are trained to recognize and required by law to report suspicions
of
child abuse. New York's position was that any child for whom there
is
reasonable cause to suspect abuse or maltreatment is at risk
of
placement in foster care. Therefore, New York argued that it
could
reasonably view these children as candidates for title IV-E and
that
costs incurred for protective services provided to such children
should
be title IV-E administrative expenses whether or not the
children
satisfied the candidate documentation standards set forth
in
ACYF-PA-87-05.
We conclude that ACF properly determined that an SCR report did
not
constitute documentation that a child was a candidate for title
IV-E
assistance as specified in ACYF-PA-87-05 and was not, in any event,
a
reasonable basis upon which to allocate all of these costs to
title
IV-E. Below, we explain ACYF-PA-87-05's standards for
documenting
candidacy. We then discuss why such standards are
consistent with the
Act, the regulations and the Missouri decision and why
New York's
position that all SCR report children are candidates is
unreasonable.
We also discuss why New York is bound by ACYF-PA-87-05 although
it was
not promulgated as a regulation.
As noted previously, section 474(a)(3)(c) of the Act
authorizes
administrative expenses "as found necessary by the Secretary . . .
for
the proper and efficient administration of the [title IV-E] State
plan."
(Emphasis added.) The regulations at 45 C.F.R. . 1356.60(c) set
forth a
series of administrative activities which are allowable title
IV-E
costs. Both the Act and the regulation are silent as to the
population
of children on whose behalf administrative activities are to
be
reimbursed. Originally in its administration of the program, ACF
took
the position in PA-ACYF-85-01 that these activities were
reimbursable
only for children who were placed in foster care and qualified
for title
IV-E benefits. In ACYF-PA-87-05, ACF expanded the population
of
children for whom a state could claim administrative expenses to
include
"candidates" for title IV-E. . In ACYF-PA-87-05, ACF described
the
following "acceptable methods of documentation indicating a child is
a
candidate for foster care benefits":
(1) a defined case plan which clearly indicates that,
absent
effective preventive services, foster care is the
planned
arrangement for the child,
(2) an eligibility determination form which has been
completed
to establish the child's eligibility under title IV-E, or
(3) evidence of court proceedings in relation to the removal
of
the child from the home, in the form of a petition to the
court,
a court order or a transcript of the court's proceedings.
The methods of documenting candidacy in ACYF-PA-87-05 involve
activities
which occur at a point when the state has initiated efforts to
actually
remove a child from his or her home or at the point the state has
made a
decision that the child should be placed in foster care
unless
preventive services are effective. 12/
For the following reasons, we conclude that ACF's definition of
a
"candidate" is clearly a reasonable interpretation of the
regulations
and title IV-E, and is also consistent with the fundamental
requirement
of allocability that applies to public assistance programs such
as title
IV-E.
Since the title IV-E regulations identify allowable
administrative
activities but do not identify the population of children for
whom a
state may claim these activities, the policy announcement interprets
the
scope of the regulations and serves as guidance for the type of
costs
the Secretary has determined would be "necessary" for the proper
and
efficient administration of the program. The scope of
allowable
administrative expenses must be determined in light of title
IV-E's
basic purpose: to fund maintenance payments for title IV-A
eligible
children who have to be placed in foster care. ACF's
restriction of
allowable expenses to children whom a state is trying to place
in foster
care or who a state concludes should be placed in foster care
absent
effective preventive services is consistent with title IV-E's
limited
purpose.
Moreover, the specific activities identified in the regulations
as
allowable are activities which typically occur after a state has made
a
determination that a child has been abused and maltreated and is at
risk
of being placed in foster care. Thus, ACYF-PA-87-05's focus on
children
whom the state has determined need to be placed in foster care
absent
effective preventive services reasonably coincides with the nature
of
the activities identified in the regulations.
ACYF-PA-87-05 is also a reasonable implementation of the
fundamental
requirement in public assistance programs that administrative
costs
charged to the program be allocable to the program. Office
of
Management and Budget (OMB) Circular A-87, Attachment A, C.1.a.
states
that only costs which are allocable to a grant are allowable charges
to
that grant. Moreover, "a cost is allocable to a particular
cost
objective to the extent of the benefits received by such
objective."
(OMB Circular A-87 is expressly made applicable to grants to
state and
local governments by 45 C.F.R. . 74.171.) As we discussed
above, the
definition of candidacy in the policy announcement is consistent
with
the limited purposes of the IV-E program and promotes the funding
of
costs that are directly related to program objectives.
New York's
position, on the other hand, violates the requirement of
allocability
because it would result in the funding of costs that are not
directly
related to program objectives. New York argued that all
children who
are the subject of an SCR report should be presumed to be at
risk of
foster care and hence should be considered program candidates until
the
CPS worker determines otherwise. That position is clearly at odds
with
the purposes of title IV-E. The primary purpose of the IV-E
program is
to provide assistance payments on behalf of children in foster
care who
would otherwise be eligible for title IV-A. In fulfilling this
primary
purpose, states are required to undertake certain
administrative
activities as a means of qualifying children for
payments. The policy
announcement provides funding for these activities
when they are
provided for children who may reasonably be viewed as being at
serious
risk of foster care placement. In contrast, the function of an
SCR
report is to precipitate an investigation into allegations of
child
abuse or maltreatment. The fact that a child is the subject of an
SCR
report falls far short of establishing that the child is at serious
risk
of placement in foster care and thus of becoming eligible for
IV-E
assistance.
New York's own statistics demonstrate that the fact that a child is
the
subject of an SCR report does not necessarily mean that such a child
is
at serious risk of placement in foster care.
o About two-thirds of SCR reports receive
"unfounded"
determinations after the CPS investigation. This
means that the
CPS worker determined that there was no credible
evidence that
abuse or maltreatment of the child existed. For
example, in
calendar year 1991, 31.7% of the SCR reports were
determined by
CPS units to be indicated but 68.3% were determined to
be
unfounded. Similarly, in calendar year 1990, 34.2%
were
indicated but 65.8% were unfounded. New York Enclosure C
for
submission of April 27, 1993.
o New York estimated that only slightly over half "of
the
estimated total number of children under 18 years of age
in
`indicated' CPS cases entered either the foster care
or
preventive services program via child protective
activities
provided on behalf of children named in SCR reports" during
the
calendar years of 1989, 1990, and 1991. Affidavit of April
23,
1993 of Larry G. Brown, Director, Performance Monitoring
and
Analysis Unit, at 6 (emphasis added).
o New York did not discuss what percent of the children
with
indicated determinations went into foster care as opposed to
the
preventive services program. However, from the figures New
York
provided in this case, it appears that in 1991 approximately
21%
of children in indicated SCR reports were actually placed
in
foster care. 13/
Thus, the disparity between the number of children subject to SCR
reports
and the number of children placed in a preventive services or
foster care
program is substantial: only about a third of the SCR
reports are indicated
and only 50% of the children in the indicated
reports enter a preventive
services or foster care program. Further,
the gulf between the number
of children subject to SCR reports and the
number who are ultimately placed
in foster care is even wider. Using
the figures for 1991 provided in
this case, only approximately 6.7% of
children named in SCR reports are
actually placed in foster care (21% of
the 31.7% of indicated cases) and only
a subset of these children will
be determined eligible for title IV-E.
Accordingly, we conclude that New York's definition of candidate
is
clearly over broad and would violate the fundamental requirement
of
allocability that applies to the IV-E program. New York's
position
would cause the program to fund activities on behalf of a much
larger
group of children than could reasonably be viewed as program
candidates
at the time the activities were provided. ACYF-PA-87-05
would enable
New York to receive funding for a subset of these children who
are at
serious risk of foster care placement at the time they received
the
activities.
We also reject New York's argument that ACYF-PA-87-05 misinterpreted
the
regulations because it misapplied the concept of candidate as set
forth
in Missouri. In Missouri, the Board concluded that, since the
purpose
of many of the administrative activities was to prevent
unnecessary
foster care placements, states were entitled to reimbursement
for
allowable administrative activities performed on behalf of
candidates
for title IV-E whether or not the candidates ultimately received
title
IV-E benefits. However, Missouri cannot be read to support
the
proposition that protective services activities performed on behalf
of
children for whom there is reasonable cause to suspect abuse
or
maltreatment are reimbursable. Rather, Missouri looked to
activities
required by the Act which a state performs "in anticipation
of
qualifying an otherwise eligible child for foster care
benefits,"
concluding that these limited activities were reimbursable.
Missouri,
DAB No. 844, at 8. As the circumstances discussed by the
Board in
Missouri indicated, the activities described in the Missouri
CAP
involved actions after the point at which Missouri had determined
that
the child needed to be removed from his or her home absent
effective
intervention. 14/
Therefore, we conclude that ACF was reasonable in refusing to allow
New
York to consider every child who is the subject of an SCR report to be
a
candidate for title IV-E. Rather, the fact that ACYF-PA-87-05
limits
allowable expenses to those incurred for children who are at
serious
risk of foster care placement appropriately reflects the extent
of
benefits received by title IV-E in light of its limited purposes and
is
consistent with the principle of allocability which is applicable to
all
public assistance programs. 15/
Finally, we do not agree with New York that ACYF-PA-87-05 constitutes
a
legislative rule and should have been promulgated as a
regulation
pursuant to the Administrative Procedure Act (APA). The APA
requires
publication of proposed legislative rules followed by an opportunity
for
public comment. 5 U.S.C. . 553(b),(c). However, agencies'
interpretive
rules are not subject to the notice and comment
requirement. 5 U.S.C. .
553(b). Although the courts have found
the distinction between
legislative and interpretive rules to be "tenuous,"
"fuzzy," or
"baffling" and to require a case-by-case analysis, interpretive
rules
are generally regarded as interpreting the scope of a statute or a
rule
an agency administers. See the discussion in New Mexico Human
Services
Dept., DAB No. 1224, at 13-16 (1991).
We conclude that the provisions of ACYF-PA-87-05 are interpretive
rules
which did not have to be published under 5 U.S.C. . 553 in order to
be
effective. 16/ This policy announcement interpreted the scope
of
section 474(a)(3)(C) of the Act and 45 C.F.R. . 1356.60(c) by
defining
the children with respect to whom administrative expenses
are
reimbursable. Therefore, in ACYF-PA-87-05, ACF engaged in the
classic
interpretive function typically performed by federal
agencies.
Moreover, the subject matter of ACYF-87-05 is particularly within
the
discretion of the Secretary because the Act provides funding only
for
administrative activities found necessary "by the Secretary" for
proper
and efficient administration. Because we find that ACYF-PA-87-05
is a
reasonable interpretation of the Act and because New York had
timely
notice of ACF's policy, approximately a year and a half prior
to
incurring the costs at issue and submitting the CAP amendment
under
appeal, we conclude that New York is bound by it.
Further, even if we were to conclude that ACYF-PA-87-05 was somehow
not
binding on New York, New York would not be free to adopt an
unreasonable
interpretation of the regulations that identify allowable
administrative
activities or that permit only allocable costs to be charged
to the IV-E
program. Rather, as we previously discussed, New York's
position that
all children subject to SCR reports were title IV-E candidates
would
clearly extend the scope of the program beyond its intended purposes
and
would therefore be unreasonable even in the absence of ACYF-PA-87-05.
For the foregoing reasons, we conclude that ACF properly determined
that
an SCR report did not constitute documentation that a child was
a
candidate for title IV-E assistance as specified in ACYF-PA-87-05
and
was not a reasonable basis upon which to allocate all of the
costs
associated with the six categories in question to title IV-E.
3. None of the activities in question are title
IV-E
eligibility determination activities.
The regulation at 45 C.F.R. . 1356.60(c)(1) provides that determination
of
eligibility is an allowable administrative cost. ACYF-PA-87-05
provides
that allowable eligibility determination costs "may include
negative as well
as positive eligibility determinations." However,
ACYF-PA-87-05 also
provides that "reimbursement for eligibility
determination activities is
limited to costs involved in actual
verification and documentation of
eligibility and may not include the
cost of other activities such as judicial
determinations, placement of
the child or periodic court reviews."
New York argued that all ten of the RMS activity categories for which
it
seeks reimbursement were part of its eligibility determination
process.
It contended that these activities were essential to determine
whether a
child needed foster care and to comply with the title IV-E
eligibility
criteria set forth in section 472(a)(1) of the Act, i.e., that
the
child's removal be pursuant to a voluntary agreement or a result of
a
judicial determination that continuation in the home was contrary to
the
welfare of the child and that reasonable efforts were made to
prevent
removal. . For the following reasons, we conclude that none of
the RMS
activities for which New York seeks reimbursement involved
determining
eligibility for title IV-E.
o Section 1356.60(c) of the regulation distinguishes
between
eligibility determinations and other types of
administrative
activities. Subsection 1356.60(c)(1) deems
eligibility
determinations to be allowable administrative activities
and
specifies that they may not be claimed under any other
federal
program. Subsection 1356.60(c)(2) then authorizes
reimbursement
for other types of administrative costs such as the six
RMS
categories of activities that DCA determined were
allowable
administrative activities for candidates. Obviously,
the
regulation did not intend the activities listed in
subsection
(2) to be considered subsection (1) eligibility
determination
activities.
o ACYF-PA-87-05 specifically limits eligibility
determination
to actual verification and documentation and expressly
states
that it does not include the cost of other activities.
The
activities involved in the RMS categories clearly go
beyond
verification and documentation.
o In considering what constitutes an eligibility
determination
activity in title IV-E, it is necessary to distinguish
between
the process of determining eligibility and the process
of
engaging in activities that can lead to making a child
eligible
(e.g., engaging in reasonable efforts to prevent
placement,
obtaining judicial determinations). Eligibility
determination
involves reviewing the results of the activities involved
in the
latter process to determine if standards of title
IV-E
eligibility have been met. Tr. at 150-154.
o New York fails to distinguish between the process of
making
the child eligible through reasonable efforts to
prevent
placement and through participation in judicial
determinations
and its review of whether those title IV-E standards
have been
satisfied. Rather, New York's construction of the
term
"eligibility determination" would unreasonably
encompass
virtually all title IV-E preplacement administrative
activity.
o In ACYF-PA-87-05, ACF distinguished between
eligibility
determination activities and other allowable
administrative
activities. As to the second category, ACF imposed
the
candidacy standards. The fact that ACF did not also impose
the
candidacy standards on eligibility determinations supports
our
construction that by eligibility determination, ACF meant
the
narrow process of reviewing whether eligibility factors
were
met, not the broader process of initiating activities that
may
lead to a child's eligibility.
o Finally, as explained in section 1 of the decision, four
of
the activities at issue were not title IV-E
administrative
activities at all, but rather activities New York
engaged in to
fulfill its own responsibility of protecting children
living
within its jurisdiction.
Accordingly, we reject New York's argument that any of the
disputed
activities could be considered eligibility determination
activities.
Conclusion
On the basis of the foregoing, we uphold DCA's decision concerning
New
York's CAP amendment and remand the disallowances to ACF so that it
can
determine which portion of New York's claims can be documented in
a
manner consistent with DCA's decision and the requirements of
applicable
authorities including ACYF-PA-87-05. If New York is
dissatisfied with
ACF's determination as to allowable administrative
expenses, New York
may appeal ACF's determination to the Board within 30 days
of its
issuance.
__________________________
Judith
A. Ballard
___________________________
Norval
D. (John) Settle
___________________________
Donald
F. Garrett
Presiding Board Member
1. The amounts of the disallowances and associated
docket numbers
are as follows: $25,020,441 (DAB No. 91-98); $24,648,766
(DAB No.
91-99); $100,805,371 (DAB No. A-92-045); $23,645,783 (DAB No.
A-92-187);
$21,924,396 (DAB No. A-92-188); $79,912,366 (DAB No.
A-93-116). The
disallowances concern expenditures incurred by New York
between January
1, 1989 and December 31, 1991. See Appellant's Brief
filed November 6,
1992, at 17 for a statement of the amounts claimed, the
period of
expenditures, and the related quarterly expenditure reports.
2. Title IV-E also funds adoption assistance for
special needs
children. However, since this case involves only the
foster care
component of title IV-E, we will not include further references
to the
adoption assistance component in this decision.
3. The full text of the relevant part 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
judicialdeterminations; (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; and (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.
4. The provision at 18 N.Y.C.R.R. . 432.1(f) defines
an unfounded
report as any report made, unless an investigation determines
that some
credible evidence of the alleged abuse or maltreatment exists;
18
N.Y.C.R.R. . 432.1(g) defines an indicated report as a report made
in
which an investigation determines that some credible evidence of
the
alleged abuse or maltreatment exists.
5. In the RMS, randomly selected CPS workers were
asked to identify
the category of activity in which they were engaged at
randomly selected
times using one of several codes. The results of the
study were
compiled to determine the portion of CPS workers' time which
was
attributable to these activity categories.
6. Included with each category is the description of
the activities
in that category submitted by New York in its CAP
amendment. See Title
IV-E Random Moment Study Definitions, Attachment
to New York letter of
March 28, 1989, proposing the RMS for allocation of
costs to title IV-E,
New York Ex. 5.
7. In defining "risk assessment," the CAP proposal
ambiguously
refers to "foster care case planning activities." To the
extent that
such activities are consistent with the regulatory activity
of
"development of the case plan," New York could create a
separate
category in an RMS system for these discrete activities (if provided
for
title IV-E candidates only) or include the activities under one of
the
categories discussed under part 2 below. See also in this
respect
footnote 10.
8. The local CPS unit is required by law to provide
extensive and
continuing documentation to the SCR concerning its
investigation and
disposition of a report. Within seven days of receipt
of the initial
SCR report, the CPS unit must submit a DSS-2222 concerning its
initial
investigation. N.Y. Social Service Law (N.Y. Soc. Serv. Law) .
424.3.
Within 90 days (as of January 1, 1992 within 60 days), the CPS unit
must
determine whether the report is indicated or unfounded. N.Y. Soc.
Serv.
Law . 424.7. If the CPS unit determines that the case is
unfounded and
the SCR accepts the determination, the report is closed in the
SCR and
the record of the report is expunged. N.Y. Soc. Serv. Law .
422.5. If
the case is indicated, it remains open in the SCR until the
CPS unit
documents compliance with certain statutory standards concerning
the
well-being of the children. N.Y. Soc. Serv. Law . 432.2(c).
9. While a title IV-E state plan must provide that,
in each case,
reasonable efforts will be made prior to placement to prevent
or
eliminate the need for removal of the child from his home,
section
1356.60(c)(3) specifically precludes funding of counseling or
treatment
services as title IV-E administrative costs. The preamble to
the notice
of proposed rulemaking for this rule recognized that although the
costs
of conducting the activities essential to fulfilling the
plan
requirements under section 471 of the Act are considered necessary
for
the proper and efficient administration of the plan, the "costs
of
direct services to children, parents or foster parents to
ameliorate
personal problems and which go beyond the activities specified in
the
regulation are to be funded from other programs." 45 Fed. Reg.
86817,
86826 (Dec. 31, 1980). The preamble thus noted that: "The
regulation
delineates such social service costs from those required to carry
out
the provisions under title IV-E." Id.
In response to commenters who opposed the prohibition on reimbursement
of
administrative costs for social services, the preamble to the final
rule
stated:
We agree that treatment-oriented services, such as
helping
families be reunited . . . , are vital to the goals of Pub.
L.
96-272. However, concurrently with the enactment of title
IV-E,
Congress enacted a revised title IV-B (Child Welfare
Services
Program) which provides for the delivery of these
social
services. In addition, title XX of the Act, now the
Social
Services Block Grant, provides funds to States for
services.
Because other sources of Federal funds are available for
the
provision of these services, the Department has
prohibited
reimbursement from title IV-E funds for
treatment-oriented
services as inconsistent with the statutory concept
of
maintenance expenditures. Funds for those purposes are
the
major focus of the service programs. Therefore, the
final
regulation continues the NPRM requirement by prohibiting
FFP
under title IV-E for treatment-oriented services.
47 Fed. Reg. 30922, 30923 (July 15, 1982).
10. Nevertheless, to the extent that New York
intended to include
referral activities within the "arranging for services"
category, it
could cover those discrete activities in a separate category in
an RMS
system (if provided for title IV-E candidates only).
11. It is important to remember that the title IV-E
foster care
maintenance program is only one component of the Adoption
Assistance and
Child Welfare Act of 1980, a broad federal attempt to assist
states to
provide help to children whose welfare is threatened. It
is
complemented by several other federal programs to assist such
children
including title IV-B, title XX, and title IV-A Emergency
Assistance
Funds. In fact, prior to this attempt to amend it CAP and
shift these
administrative costs to title IV-E, New York claimed them as
title XX
expenses. Letter from John M. Sweeney of March 28, 1989, New
York Ex. 5
at 1. It is also possible that under New York's proposed CAP
amendment
some of the disallowed funds in this case can be funded under
EAF. See
our discussion on page 6.
12. ACF represented that it would permit other
methods of
documenting candidacy that were equivalent to those set out
in
ACYF-PA-87-05. Transcript of hearing conducted on April 5, 1990 in
DAB
Docket No. 89-161, Federal Ex. 6 at 84; Transcript of hearing
conducted
March 4, 1993 in this appeal, at 128-129. As explained above,
we agree
with ACF that an SCR report does not constitute such
equivalent
documentation.
13. The figure of 21% is derived from New York's
Enclosure C to its
Submission of April 27, 1993 and the Affidavit of Larry G.
Brown, which
was included with that submission. In that affidavit, Mr.
Brown
explained that the New York derived its percent of children who
entered
foster care or preventive services via child protective
activities
provided on behalf of children named in SCR reports by comparing
(1) the
estimated combined population of children newly admitted to foster
care
and children for whom new preventive services cases have been opened
and
who have remained out of foster care to (2) the estimated population
of
children in indicated CPS cases, i.e., for the year 1991,
35,795
children of 70,633 children in indicated SCR reports equals
50.7%. Of
the 35,795 children in indicated cases, New York's
statistics
represented that 14,892 of the 35,795 children were placed in
foster
care. Therefore, 14,892 children of 70,633 children equals
21%.
14. As the Board wrote: "The State, however,
provides the
activities in question not knowing whether a child will be
removed and
should not lose reimbursement simply because a child is not
removed.
(The reason a child is not removed, for example, may be that the
case
plan led to a reassessment of the child's home situation or a
court
refused to remove a child from its home in spite of the State's
efforts
in judicial proceedings.)" Missouri at 8.
15. This decision does not address the issue of
whether, pursuant to
ACYF-PA-87-05, OMB Circular A-87 or even statutory
provisions such as
section 470 of the Act, ACF may require that title IV-E
candidates be
able to meet title IV-A eligibility requirements.
However, as we
previously noted, the purpose of the title IV-E program as
specifically
set out in section 470 is to fund maintenance assistance for
children in
foster care who would otherwise be eligible for title IV-A.
Thus in
Missouri, when we referred to "an otherwise eligible child for
foster
care benefits" or an individual the State reasonably views as
a
"candidate," we were referring to a child who could meet title
IV-A
eligibility requirements (but for whom the State was
taking
administrative steps relating to foster care placement in
anticipation
of qualifying the child for title IV-E maintenance
payments). Missouri,
DAB No. 844, at 8.
16. While the APA provides that interpretive rules,
procedural
rules, and statements of general policy be published in the
Federal
Register, it does not render an unpublished interpretive rule of
no
legal effect. 5 U.S.C. . 552(a)(1). Rather, the APA provides
that a
person (or state) may not be adversely affected by a rule which is
not
so published, unless that person has actual and timely notice of
the
rule. Id. Here, there is no dispute that New York had actual
and
timely notice of ACYF-PA-87-05. Further, we question whether the
policy
announcement can be said to affect New York adversely since, as
we
conclude in our analysis, New York's position is an
unreasonable
interpretation of the regulations and statute irrespective of
the policy