DEPARTMENT OF HEALTH & HUMAN SERVICES
Office of the Secretary
Departmental Appeals Board
Room 637-D, HHH Building
200 Independence Avenue, SW
Washington, D.C. 20201
SUBSEQUENT HISTORY FOR
New York State Dept. of Social Services, DAB No. 1579 (1996)
After issuance of DAB No. 1579, the parties entered into a settlement agreement relating to the disallowance the appeal of which was docketed as Docket No.
A-94-170 and reviewed by the Board in DAB No. 1579. To the extent that DAB No. 1579 relates to that disallowance, the decision should not be viewed as having precedential value.
New York State Department of Social Services, DAB No. 1579 (1996) Department of Health and Human Services DEPARTMENTAL APPEALS BOARD Appellate Division SUBJECT: New York State Department DATE: June 12, 1996 of Social Services Docket Nos. A-94-170, A-95-157, A-95-173, A-95-204, A-96-41, A-96-79, and A-96-107 Decision No. 1579 DECISION The New York State Department of Social Services (New York) appealed seven determinations by the Administration for Children and Families (ACF) disallowing federal financial participation (FFP) claimed by New York under title IV-E of the Social Security Act (Act). The claims were for foster care maintenance payments for residential foster care provided by New York City (NYC) voluntary agencies between July 1991 and June 1995. 1/ The claims fall into two categories, both of which involve discrepancies between the amounts shown as paid to voluntary agencies for foster care maintenance on payment vouchers and in New York's statewide automated foster care information system, the Child Care Review System (CCRS). In the quarters where the amount shown as paid in the CCRS was larger, the parties referred to the difference as "unpaid amounts." In the quarters where the amount shown on the vouchers was larger, the parties referred to the difference as "outstanding amounts." New York claimed FFP in a portion of the unpaid amounts and the outstanding amounts which it attributed to foster care maintenance for IV-E eligibles. New York computed the FFP in the unpaid amounts by applying a percentage of IV-E-eligible payments derived from the CCRS to amounts which the CCRS showed were payable for foster care maintenance but for which there were no vouchers establishing that payments were actually made to the agencies. ACF determined that the unpaid amounts were unallowable because they did not represent actual expenditures for foster care maintenance. New York computed the FFP in the outstanding amounts by applying a percentage of IV-E-eligible payments derived from the CCRS to amounts established by vouchers as having been paid to the voluntary agencies even though the CCRS did not show that these amounts were in fact payable for IV-E eligibles. ACF determined that the outstanding amounts were unallowable because New York failed to meet its burden to document the allowability of its claim. All of the appeals except Docket No. A-94-170 involve disallowances of outstanding amounts. As discussed below, we uphold the disallowances in all of the appeals, except the appeal in Docket No. A-95-173, which we remand to ACF to consider New York's arguments that the disallowance of the current quarter claim was improperly calculated. Specifically, we conclude that the unpaid amounts were properly disallowed since New York did not establish that it actually paid the voluntary agencies for the foster care maintenance which they provided, and the Act authorizes federal funding only for expenditures made by a state. We further conclude that the outstanding amounts were properly disallowed because New York failed to document that the outstanding amounts represented allowable costs under the IV-E program that were properly allocated to that program. This decision is based on the parties' written submissions, including New York's exhibits in the record for New York State Dept. of Social Services, DAB No. 1481 (1994) (which are incorporated by reference at New York's request). Separate submissions were initially made in Docket No. A-94-170 and in the remaining docket numbers (which were consolidated). The parties' later submissions addressed all of these cases. We are issuing one decision for all seven cases since all of these cases raise questions concerning how New York computed foster care maintenance payments eligible for title IV-E funding. Relevant Authority Section 472 of title IV-E of the Act authorizes FFP in the costs of state foster care maintenance payments. Federal matching of these payments is available for children in foster care who meet certain eligibility criteria. Section 474(a)(1) of the Act provides that a state is entitled to a percentage "of the total amount expended during such quarter as foster care maintenance payments for children in foster family homes or child care institutions . . . ." The Act provides that, prior to the beginning of each quarter, the Secretary shall estimate the amount to which a state will be entitled for that quarter based in part on the state's "estimate of the total sum to be expended in such quarter . . . ." Section 474(d)(1). 2/ Section 474(d)(2) provides for payment by the Secretary of these estimated amounts, reduced or increased to the extent of any overpayment or underpayment which the Secretary determines was made to the state for a prior quarter. One way an overpayment or underpayment may be determined is by comparing the state's estimated quarterly expenditures for a particular quarter (for which it received advance federal funding) with its actual expenditures for that quarter. Actual expenditures are identified on a state's quarterly report of expenditures submitted following the close of the quarter. A quarterly statement of expenditures is-- an accounting statement of the disposition of the Federal funds granted for past periods and provides the basis for making the adjustments necessary when the State's estimate for any prior quarter was greater or less than the amount the State actually expended in that quarter. 45 C.F.R. 201.5(a)(3) (made applicable to title IV-E by 45 C.F.R. 1355.30(d)). Claims for FFP must be submitted "within the two-year period which begins on the first day of the calendar quarter immediately following" the calendar quarter in which the expenditures for which FFP is claimed were made. Section 1132 of the Act. A claim for reimbursement for expenditures reported on the Quarterly Statement of Expenditures may be deferred when the Regional Administrator believes the claim (or a specific portion of the claim) is of questionable allowability. A state must provide documentation in support of a deferred claim within 60 to 120 days of receipt of the notice of deferral action. 45 C.F.R. 201.15(c)(1) and (3) (made applicable to title IV-E by 45 C.F.R. 1355.30(d)). New York's Foster Care Payment Systems Since the beginning of the relevant time period, New York has had two systems which it uses to compute foster care maintenance payments to NYC voluntary agencies as well as claims for federal funding in these payments. The Child Welfare Administration (CWA) payment system is based on monthly reports filed by the voluntary agencies with CWA, a part of the NYC Human Resources Administration (HRA). The report identifies the number of care days for each foster care program operated by a voluntary agency (e.g., group homes) and the per diem rate of payment for the services provided for each program. The report does not identify the number of IV-E eligibles served since complete and accurate eligibility data is unavailable at the time the agency files the report. CWA makes monthly payments to the voluntary agencies based on the information reported for a month two months prior to the payment month. The second system for computing foster care maintenance payments and claims for those payments is the Child Care Review System (CCRS), a statewide automated information system administered by the Department of Social Services. The CCRS contains comprehensive data on children in foster care and documents foster care maintenance expenditures for each child in the system. CWA enters updated information in the CCRS based on changes reported by the voluntary agencies after their review of monthly CCRS reports. The CCRS contains an automatic edit that prevents any updates from being entered more than 18 months after the original monthly claim is filed. This edit is intended to encourage the filing of claims for all expenditures for IV-E eligibles within the federal two-year filing limit. HRA's Office of Financial Management (OFM) uses monthly reports generated by the CCRS as the basis for developing claims for state and federal reimbursement for payments made to voluntary agencies. Like CWA, OFM uses a three- month claiming cycle, so that the monthly claims are based on information in the CCRS two months prior to the month for which FFP is claimed. OFM submits claiming information on a monthly "Schedule K" to the Department of Social Services, which uses it to prepare its quarterly expenditure reports. OFM may also submit supplemental Schedule K's to reflect changes in information upon which prior Schedule K's were based (such as a determination that a child for whom payments were made is eligible for title IV-E). Since both payments and claims for FFP are based on information which is later updated, CWA and HRA each conduct interim and final reconciliations to identify any discrepancies. The "final CCRS reconciliation" is conducted by OFM between 18 months and two years after the close of each fiscal year. OFM reviews outstanding CCRS updated monthly fiscal bills and CWA payment information during this reconciliation. OFM may submit increasing or decreasing adjustments as a result of its interim or final reconciliations. However, OFM does not claim FFP for payments identified as IV-E eligible after the two-year federal filing deadline. CWA conducts a "final fiscal year reconciliation," which is begun, but not necessarily completed, between 18 months and two years after the close of the fiscal year in question. This reconciliation entails a detailed review and comparison of fiscal year data on actual care days rendered and actual payments made by CWA, and also includes an analysis of child-specific data to confirm the amounts of IV-E expenditures previously claimed based on the CCRS. The interim or final CWA reconciliations may result in adjustments of the payments made by CWA to voluntary agencies. However, this process is not designed to be completed so as to assure the filing of timely claims for expenditures it identifies. Although CWA initiates the final fiscal year reconciliation, OFM also participates at the end of the reconciliation process by reconciling the results of CWA's review to the previously filed title IV-E and non-title IV-E fiscal year claims associated with each voluntary agency. Unpaid Amounts The disputed claims in Docket No. A-94-170 were the result of final CCRS reconciliations for the quarters ended September 30, 1990, December 31, 1990, and June 30, 1991. These reconciliations disclosed that, for each quarter, the amount shown by updated CCRS fiscal data as paid for foster care maintenance exceeded the payments to voluntary agencies for foster care maintenance shown on CWA vouchers. New York determined that part of the "unpaid amounts" for each quarter was attributable to care provided by the agencies to IV-E-eligible children. New York submitted increasing adjustments for these amounts based on the application to the unpaid amounts of the percentage of expenditures for IV-E eligibles. 3/ 4/ For the first two quarters, New York claimed FFP in 80% of the unpaid amounts. This was below the monthly percentage of expenditures for IV-E eligibles during the quarters in question shown by the CCRS, which ranged from 83.3% to 83.8%. For the third quarter, New York claimed FFP in 84.93% of the unpaid amounts, which was the actual percentage of expenditures for IV-E eligibles for the quarter shown by the CCRS. New York Ex. 5 (Affidavit of Michael J. O'Connor), Schedule A. ACF took the position that the unpaid amounts were unallowable because states may not seek reimbursement for payment amounts due but not issued to third parties. In support of its position, ACF cited ACYF-PI-92-11. This program instruction includes a claiming form which states that all amounts reported as "current quarter expenditures" and "prior quarter adjustments" "must be actual expenditures made under the State's plan . . . ." ACF letter dated 10/10/95, attachment, 1st page (emphasis in original). 5/ New York asserted that the unpaid amounts were for care which had been provided by the voluntary agencies. New York further asserted that the voluntary agencies had already been paid for that care, and that New York was merely seeking to claim the appropriate amount of federal funding for these payments based on updated CCRS information. New York letter dated 7/8/94, at 2. New York conceded that the "updated CCRS fiscal bills documented claims in amounts that slightly exceeded the actual CWA voluntary agency payments for those periods." New York letter dated 7/5/95, at 6. See also, New York Ex. 5, at 8. However, according to New York, the discrepancy was explained by the fact that the CCRS reconciliation was not designed to take into account supplemental payments made by CWA to voluntary agencies after the service periods in question. New York Br. dated 1/31/96, at 44. New York took the position that, under these circumstances, the unpaid amounts were allowable since "[t]here is no statutory nor regulatory provision that expressly or impliedly prohibits the filing of reasonable estimated claims reflecting actual expenditures incurred under Title IV-E of the Act." New York letter dated 7/5/95, at 6. New York contended that ACYF-PI-92-11 "offers no new clarification or interpretation of the claiming provisions of Title IV-E that would bar Title IV-E claims that are reasonably calculated and that reflect actual Title IV-E expenditures." Id. at 6. According to New York, the final CCRS reconciliation provided a reasonably accurate means of ascertaining the amount of IV-E funding to which New York was lawfully entitled. Specifically, New York asserted that it allocated the unpaid amounts to title IV-E based on "historically accurate CCRS data on the percentage of Title IV-E eligible foster care maintenance payments" and that the result represented "what a review of case- specific eligibility documentation would otherwise reveal." New York letters dated 4/17/96, at 4 and 7/5/95, at 7. New York asserted, moreover, that the claims in question were allowable estimates under the criteria set out in DAB No. 1481 and prior Board decisions because the claims resulted from a systematic analysis of expenditures which was supported by detailed payment records, documentation contained in the CCRS, and individual case files maintained by HRA. New York letter dated 7/5/95, at 7. New York also asserted that the final fiscal year reconciliation which was conducted subsequent to the final CCRS reconciliation would resolve any remaining discrepancies between the amount shown on CCRS as payable to IV-E and the amount paid to the voluntary agencies. New York argued, however, that, given the number of voluntary agencies, the size of the foster care population served by these agencies, and New York's limited administrative resources, it was not reasonable to expect New York to conduct this final fiscal year reconciliation prior to the expiration of the two-year deadline for filing claims. New York letter dated 7/5/95, at 6-7. We conclude that the statute precludes payment of New York's claim for any of the unpaid amounts. Section 474(a)(1) of the Act authorizes FFP in "the total amount expended during [a] quarter as foster care maintenance payments." (Emphasis added.) New York did not establish that the amounts in question here represented expenditures for foster care maintenance payments. Although New York indicated that the discrepancy between the foster care maintenance payments shown in the CCRS and the payments shown on the CWA vouchers was due to the fact that New York made supplemental payments which were not entered into the CCRS, New York offered no evidence whatsoever to establish that it in fact made such supplemental payments. Thus, ACF was compelled by the express terms of the statute to disallow New York's claim. Although ACF cited as authority the instructions on the claiming form to report as current quarter expenditures or increasing adjustments only actual expenditures, these instructions repeat what is already clear from the statute. 6/ New York misapprehended the issue here in asserting that it reasonably estimated the portion of the unpaid amounts attributable to the IV-E program. New York is correct that a state need not make "an exact computation of every eligible expenditure, correct to the penny" when it reports actual expenditures on its quarterly report of expenditures. New York State Dept. of Social Services, DAB No. 537, at 15 (1984). A claim calculation is reasonable if it is "determined by a systematic analysis of expenditures designed to identify those appropriately claimed for FFP," and is not simply "a figure drawn out of a hat, with no plausible explanation of where it came from, and made up solely to avoid the timely filing limitation." Id. at 15-16; see also, DAB No. 1481 at 6- 7. However, a claim must also reflect actual expenditures already made rather than possible expenditures that might be made at some future time. As noted above, New York did not establish that its claim here identified amounts actually paid the voluntary agencies in question. The decisions on which New York relied do not provide authority for federal funding based on New York's calculation of amounts which are as yet unpaid, even if it is a reasonable calculation of amounts which are properly payable to voluntary agencies based on services already provided. 7/ Moreover, we do not agree with New York that the effect of denying payment in this situation is to force New York either to conduct the final fiscal year reconciliation earlier or to forfeit title IV-E funding for care provided by the voluntary agencies. Under section 1132(a) of the Act, a state may claim federal funds for an expenditure up to two years after the end of the calendar quarter in which the state made the expenditure. Expenditures for assistance payments such as foster care maintenance payments are considered made when the recipient (in this case, a voluntary agency) receives the payment. 45 C.F.R. 95.13; see also, Pennsylvania Dept. of Public Welfare, DAB No. 1551 (1995). 8/ Thus, the two-year period for making claims for the care provided by the voluntary agencies will not begin to run until New York pays the agencies for that care, regardless of when the final fiscal year reconciliation is conducted. 9/ Accordingly, we conclude that ACF properly disallowed the unpaid amounts since they did not represent actual expenditures for foster care maintenance. Outstanding Amounts The amounts disallowed in the remaining appeals were claimed based on interim or final CCRS reconciliations which disclosed that the quarterly payments to voluntary agencies for foster care maintenance shown on CWA payment vouchers exceeded the amounts shown on the updated CCRS monthly fiscal bills for the same quarters as paid for foster care maintenance. 10/ 11/ New York determined that part of these "outstanding amounts" was attributable to care provided by the agencies to IV-E-eligible children. New York submitted increasing adjustments, as well as a current quarter claim for one quarter, based on the application to the outstanding amount of the percentage of expenditures for IV-E eligibles shown in the CCRS (or a lower rounded off percentage). The percentage applied for all but two of the quarters in question was 80% (less than the actual percentage of expenditures for IV-E eligibles). For the quarter ended March 1992, the percentage applied was 84.80%. For the quarter ended September 1991, different percentages, ranging from 84.10% to 84.40%, were applied to the outstanding amounts for each month. New York Ex. 5 (Affidavit of Michael J. O'Connor), Schedule A. The current quarter claim of $150,394 was submitted for supplemental payments made during the quarter ended December 31, 1993 for care provided from July 1992 through September 1993. See New York Br. dated 1/31/96, at 8, 56; New York letter dated 7/17/95 (notice of appeal in Docket No. A-95-173) at 4. ACF disallowed New York's claims for the outstanding amounts on the ground that New York failed to document the allowability of these claims. ACF questioned whether the amounts at issue represented foster care actually provided since a very substantial amount of time had elapsed (in some instances almost five years after the month in which the care was allegedly provided), and the amounts were still not documented in CCRS or in any manual claiming system as properly paid to IV-E eligibles. Moreover, ACF found no basis for New York's assumption that the alleged care was provided to IV-E eligibles in the same proportion as the care which was documented in CCRS. 12/ See, e.g., disallowance letter in Docket No. A-95-157, dated 5/23/95, at 2. New York took the position that there is no statutory or regulatory prohibition on the filing of reasonable estimated claims under title IV-E. According to New York, the claims in question were reasonable estimated claims because they were based on a systematic analysis of expenditures which was supported by detailed payment records and CCRS data, including historical information on the percentage of expenditures for IV-E eligibles. New York asserted that the claims were also supported by the underlying case records, which it acknowledged ACF had a right to audit. However, New York argued that it was not required to specifically identify the individuals to whom the claims related in order for the claims to be valid. New York argued further that the claims were as definite as reasonably possible in view of the size of NYC's foster care population (over 30,000 children in voluntary agencies), and the time constraints imposed by the two-year filing requirement. See New York letter dated 6/29/95, at 6-8; New York letter dated 4/17/96, at 6-7; New York Br. dated 1/31/96, at 50-52. New York's arguments have no merit. As explained below, New York's methodology for computing the amount of FFP in the outstanding amounts was not reliable and did not relieve New York of its burden to document the allowability of the claims. It is well-established in Board precedent that the federal recordkeeping requirements and cost principles place the burden on grantees to document their costs, and that it is therefore reasonable to disallow costs which may in fact have been incurred when a grantee is unable to document that the costs are properly charged to its federal grant. See e.g., Michigan Dept. of Mental Health, DAB No. 1291, at 6 (1992). Moreover, under title IV-E, a state is obliged to maintain documentation for its foster care cases adequate to show that federal requirements were met. See e.g., New York State Dept. of Social Services, DAB No. 1358, at 25 (1992). 13/ Here, the system for reliably identifying IV-E expenditures and isolating them from the total expenditures for foster care maintenance is the CCRS. New York argued, nevertheless, that the CWA payment system has identified additional expenditures for foster care maintenance that were not identified in the CCRS. However, the CWA system alone, even with IV-E percentages derived from the CCRS superimposed on the outstanding amounts, is an insufficient basis to document the allowability of those amounts. First and foremost, New York did not establish that the outstanding amounts represent expenditures which are allowable under the IV-E program. ACF asserted that there is a clear possibility that these amounts may not represent allowable payments for foster care maintenance. As an example, ACF alluded to audits of the CWA system occurring five or more years after New York incurred particular expenditures which identified payments made to voluntary agencies "in excess of appropriate levels." ACF letter dated 11/8/95, at 2. ACF asserted that New York "is effectively asking the Title IV-E program to reimburse an estimated share of amounts it cannot certify as representing care delivered at the appropriate rate through its fiscal tracking system." Id. New York responded that ACF's "insinuation" that the outstanding amounts "reflect payment for something other than foster care is absolutely unsupported by any evidence and is pure conjecture." New York Br. dated 1/31/96, at 53. However, New York's argument stands matters on their head. As previously noted, the burden is on a state to document the allowability of costs for which it claims FFP, not on the federal agency to show that the costs are unallowable. New York simply has failed to provide the documentation necessary to demonstrate that these amounts represent previously unclaimed costs of IV-E foster care maintenance payments. As also noted earlier, New York took the position that the outstanding amounts were adequately documented by the payment records, the CCRS data and the underlying case records. However, the payment records, or vouchers, establish only that payments were in fact made to the voluntary agencies, not what the payments were for. As ACF argued, the vouchered payments are based on a bill from the voluntary agency which is itself an estimate of care to be provided in the coming month. Moreover, the CCRS documents only payments which are in the CCRS, which the outstanding payments are not. Finally, the mere existence of the underlying case records does not establish that the amounts at issue represent foster care maintenance payments for the children identified in the case records. Furthermore, we have no verifiable explanation as to why the outstanding amounts were not identified in the CCRS. New York asserted that this was due primarily to movements of NYC foster children into new or different placements and to per diem rate changes or rate adjustments that could not be entered into the CCRS in the month in which they occurred. New York Br. dated 1/31/96, at 48-49; see also, New York letter dated 4/17/96, at 4. Thus, in New York's view, "[i]t is reasonable to conclude that the variances between the updated CCRS data and the CWA payment data reflect incomplete fiscal data entered in the CCRS regarding a certain number of children already included in the population of foster children identified on the CCRS system." New York Br. dated 1/31/96, at 50 (emphasis added). These explanations might cover discrepancies for a period of a few months. However, New York here failed to provide verifiable or even credible explanations as to how discrepancies of such large sums could have persisted in some cases for years beyond the point when the final CCRS reconciliation was conducted (between 18 months and two years after the close of the fiscal year). Moreover, even if we were able to assume that all of the outstanding amounts identified by the CWA system were potentially allowable IV-E costs (which we are not), New York still has not adequately documented what portion of these amounts is allocable to the IV-E program. Title IV-E makes federal funding available only for foster care maintenance payments made on behalf of children who meet certain eligibility requirements. The general cost principles for the administration of grants to states provide that "a cost is allocable to a particular cost objective only to the extent of benefits received by such objective." Office of Management and Budget (OMB) Circular A-87, Attachment (Att.) A, C.2.a. 14/ Moreover, only costs which are allocable to a grant are allowable charges to a grant. OMB Circular A-87, Att. A, C.1.a. New York has not met its burden to demonstrate that these costs are allocable to the IV-E program because it has not demonstrated why superimposing ratios derived from the CCRS on amounts which were derived from the CWA system would produce a reliable allocation of IV- E program costs for the periods in question. As explained above, to arrive at the claims in question, New York multiplied the outstanding amounts (i.e., the actual payments to voluntary agencies which exceeded the payments documented in the CCRS) for each quarter by the percentage of expenditures for IV-E eligibles documented in the CCRS. However, New York's methodology is problematic. The methodology assumes that the outstanding amounts were IV-E-eligible in the same proportion as the expenditures documented in the CCRS. However, it is not clear that these two populations were sufficiently similar to justify this assumption. For example, to the extent that the outstanding payments were due to the failure of the CCRS to capture children entering the foster care system (i.e., children moving into new placements), the population was clearly not the same. Thus, our basic objection to use of the percentages is that we simply have no way of determining whether the outstanding amounts are just as likely to have been made for IV-E cases as the CCRS-documented payments. What was really needed to establish that New York's claims for FFP in the outstanding amounts were both allowable and allocable was information on the number of children eligible for IV-E, the number of care days for those children, and the per diem rates for their care. 15/ Moreover, contrary to what New York argued, ACF's acceptance of the use of the same percentage in other situations does not show that its use here was statistically valid. New York pointed out that ACF accepted a decreasing adjustment of New York's claim for August 1991 which New York calculated using the percentage of expenditures for IV-E eligibles. 16/ In addition, New York pointed out that ACF itself used the same type of percentage in calculating the disallowance in DAB No. 1481. In both of the situations cited by New York, however, the percentage was applied to expenditures documented in the CCRS. Thus, unlike the situation here, the percentage was not applied to a population which arguably had different characteristics from the population from which the percentage was derived. New York also argued that ACF was prematurely applying the requirements for collection and reporting of foster care data at 45 C.F.R. 1355.40 (1995), which provide for a penalty-free period of operation through September 30, 1997. New York letter dated 6/29/95, at 5. 17/ We disagree, since New York could clearly document that the claims were for services provided to IV-E eligibles without providing the detailed information required by these regulations. Accordingly, we conclude that ACF properly disallowed the claims for the outstanding amounts on the ground that they were inadequately documented. New York argued, however, that its current quarter claim for the supplemental payments was distinguishable from the other outstanding claims. According to New York, ACF improperly used CCRS data on initial payments to calculate the amount by which the supplemental payments exceeded the amount documented in the CCRS. In addition, New York asserted that ACF failed to take into account one month (April 1993) for which the amount documented in CCRS as paid for foster care maintenance exceeded initial payments to the voluntary agencies. New York contended that this did "not represent an equitable method for determining a portion of this . . . claim to be ineligible for reimbursement under Title IV-E." New York letter dated 6/17/95 (notice of appeal for Docket No. A- 95-173) at 5; see also, New York Br. dated 1/31/96, at 57. However, New York did not propose another method for calculating the amount of outstanding payments in the current quarter claim, nor did ACF respond to New York's argument. We therefore remand this matter to ACF to consider whether the amount of outstanding payments in the current quarter claim should be calculated differently. If New York is dissatisfied with ACF's determination, it may seek Board review pursuant to 45 C.F.R. Part 16 within 30 days of receipt of ACF's written determination. Conclusion For the foregoing reasons, we uphold the disallowance of the unpaid amounts in full and uphold the disallowance of the outstanding amounts except with respect to the current quarter claim of $150,394, which we remand to ACF to consider New York's arguments that it was improperly calculated. This decision does not preclude New York from resubmitting its claims for the unpaid amounts should payments be made to the voluntary agencies. ____________________________ Judith A. Ballard ____________________________ Norval D. (John) Settle ____________________________ Donald F. Garrett Presiding Board Member 1. With the exception of one current quarter claim, the claims were for services provided in earlier quarters. The amounts originally disallowed and the service periods covered are as follows: Docket No. A-94-170 -- $17,112,365 (October - December 1987, July 1989 - March 1990, July - December 1990, and April - June 1991); Docket No. A-95-157 -- $839,798 (July - September 1991); Docket No. A-95-173 -- $2,607,387 (July 1991 - December 1993) (includes current quarter claim of $150,394); Docket No. A-95-204 -- $36,584,901 (April 1993 - September 1994 and November 1994); Docket No. A-96-41 -- $3,309,728 (January - March 1993); Docket No. A-96-79 -- $19,008,777 (December 1994 - April 1995); and Docket No. A-96-107 -- $1,781,757 (October - December 1993). After the appeals were filed, New York withdrew a total of $7,567,362 of its appeal in Docket No. A-94-170, leaving $9,545,003 in dispute. New York letters dated 7/5/95, at 1-2, and 5/2/96. In addition, New York withdrew $907,706 of its appeal in Docket No. A-95-204, and stated that it would withdraw an additional $1,249,482 upon ACF's confirmation of its intention to issue a grant award in that amount less 14.315%. New York letter dated 5/8/96, at 1. This leaves $34,427,713 in dispute. New York also acknowledged that $1,249,482 of the amount in question in Docket No. A-96-107 duplicated the claim in Docket No. A-95-204. Id. Thus, the amount remaining in dispute in Docket No. A-96-107 is $532,275. 2. Public Law No. 103-432, section 207(b)(2), redesignated subsection (d) as subsection (b), applicable to payments for calendar quarters beginning on or after October 1, 1993. 3. New York in some submissions described the percentage applied as a percentage of IV-E-eligible children rather than a percentage of expenditures for foster care maintenance payments for such children. See, e.g., New York letter dated 5/21/95, attached Affidavit of John M. Sweeney at 2-3, stating that "HRA uses a ratio of Title IV-E eligible NYC foster children cared for by voluntary agencies to all similarly cared for NYC foster care children . . . ." Similarly, ACF described the percentage applied as a "caseload penetration rate." ACF letter dated 5/23/95, at 3. However, it appears from the worksheet accompanying ACF's letter (as Enclosure II) that the percentage used was in fact a percentage of expenditures (payments) rather than a caseload percentage. (A caseload percentage could be quite different from the percentage of expenditures since the same amount of foster care maintenance payments was not necessarily made for each child.) For brevity, we refer throughout the decision to the percentage of expenditures for IV-E eligibles, meaning the percentage of total expenditures for foster children cared for by NYC voluntary agencies which was expended for IV-E eligibles. 4. The IV-E-eligible portion of the unpaid amounts, when added to the IV-E-eligible portion of the payments shown on the vouchers (for which FFP was previously claimed), should equal the amount of IV-E-eligible foster care maintenance expenditures shown in the CCRS. 5. ACYF-PI-92-11, dated 8/21/92, superseded ACYF-PI- 90-07, dated 4/4/90. According to New York, the claiming form and instructions transmitted by these two program instructions were essentially the same. New York Br. dated 1/31/96, at 36-37. 6. Additional authorities cited by ACF do not specifically require the reporting of actual expenditures. See 45 C.F.R. 74.61(a) and 74.171 (1993), and 45 C.F.R. 201.15(c). 7. The statute also provides for advance funding on the basis of a state's estimate of its expenditures for the coming quarter. The Secretary may adjust the payment for the subsequent quarter to account for any difference between this estimate and a state's actual expenditures. See sections 472(d)(1) and 472(d)(2) of the Act. However, New York did not contend that the claims in question here were for advance funding for care which had not yet been provided. Instead, New York was calculating what amounts were properly payable to the voluntary agencies for care previously provided. Thus, these statutory provisions do not authorize federal funding for the claims in question here. 8. The Board held in DAB No. 1551 that a state agency's expenditures for foster care maintenance were assistance payments rather than payments for services for purposes of the timely claims statute. The Board found that a "foster care maintenance payment is a money payment to cover basic needs made on behalf of an eligible recipient . . . ." DAB No. 1551 at 8. In the case now before us, neither party specifically argued that payments to voluntary agencies for foster care maintenance would not be assistance payments, although New York referred to "services" rendered by the voluntary agencies. In any event, the result would be the same even if New York's expenditures for foster care maintenance were considered expenditures for services. (In DAB No. 1551, the distinction between payments and services was critical because the foster care providers had already been paid by the county.) 9. As of January 30, 1996, the final fiscal year reconciliation for FY 1991 had not yet been completed. New York Ex. 5 (Affidavit of Michael J. O'Connor) at 9- 10. 10. According to New York, some claims were based on interim rather than final reconciliations due to State appropriations legislation for the 1992-1993 through 1994-1995 fiscal years which set a cash cap on foster care expenditures. New York wished to assure that NYC claimed up to its cash cap so that the cap for the succeeding year would be as high as possible. See New York Br. dated 1/31/96, at 55. 11. This situation is thus unlike that in DAB No. 1481, where all of the payments were documented in the CCRS. 12. ACF also noted that, even if this was a valid assumption, the percentages applied by New York to the outstanding payments in Docket No. A-95-157 did not exactly match the percentages derived from total documented CCRS claims. In response, New York stated that the discrepancy in the percentages was explained by the fact that, for each of the three months at issue, New York used the data in the initial CCRS monthly fiscal bill rather than the updated CCRS monthly fiscal bill. New York letter dated 7/21/95, at 2-3. ACF did not comment on this explanation. We need not resolve this issue, however, since there are other grounds for upholding the disallowance. 13. Contrary to what New York argued, the Board has never held that a state is necessarily entitled to federal funding based solely on an estimate of its actual expenditures. In DAB No. 537, the Health Care Financing Administration (HCFA) disallowed New York's title XIX claim as an estimated claim which lacked supporting documentation. The Board held that it could not "conclude that the claim itself is deficient where the amount is determined by a systematic analysis of expenditures designed to identify those appropriately claimed for FFP." DAB No. 537, at 16. However, the Board remanded the case to HCFA to review documentation which New York had submitted in support of its claim after the claim was filed. Thus, while the claim sufficed to meet the two-year filing deadline, it did not conclusively establish the allowability of the costs claimed. Similarly, in DAB No. 1481, the Board merely stated that ACF cannot properly disallow a claim which results from a systematic analysis of expenditures simply because complete supporting documentation was not supplied when the claim was filed. We need not reach here the issue of whether New York's claims for the outstanding amounts constituted valid claims for purposes of meeting the two-year filing deadline, however. Even if they were valid claims, they would not be allowable since, as we discuss in the text below, New York has never provided documentation establishing that the payments were made for IV-E eligibles. 14. OMB Circular A-87 was made applicable to DHHS grants by 45 C.F.R. 74.171 (redesignated as 74.27 effective August 25, 1994), which in turn was specifically made applicable to title IV-E by 45 C.F.R. 1355.30(b). 15. ACF noted that New York failed to supply the average monthly number of children for which each quarterly claim was made, as required by the claiming form. ACF letter dated 4/2/96, at 3. ACF suggested that provision of this information would assure that each claim was "an accurate accounting . . . rather than an estimate." ACF letter dated 4/2/96, at 3. New York took the position that the request on the claiming form for the average number of children merely serves a statistics gathering function and is irrelevant to the question of the allowability of the claims. New York letter dated 4/17/96, at 6. We agree with New York that the identification of the average number of children covered by a quarterly claim would not assure that New York claimed only for payments made for IV-E eligibles. We need not resolve here the question of whether ACF could nevertheless require this information. We also note that while New York understood ACF to say that New York should have supplied a list of the individuals covered by the claim, ACF denied that this was its position. ACF letter dated 4/2/96, at 3rd-4th page. 16. This decreasing adjustment was netted against increasing adjustments for July and September 1991 which were disallowed in Docket No. A-95-157. Disallowance letter dated 5/23/95, Enclosure II. 17. New York made the same argument with respect to the disallowance of the unpaid amounts in Docket No. A- 94-170. See New York letter dated 7/5/95, at 6. That argument clearly has no bearing on whether New York may properly claim FFP where no expenditures have been made.