Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Appellate Division
SUBJECT: New Jersey Department of Human Services
DATE: February 25, 1992
Docket Nos. 90-226, 90-248 and 91-15
Decision No. 1306
DECISION
The New Jersey Department of Human Services (New Jersey, DHS) appealed
a
decision by the Regional Director, Region II, Department of Health
and
Human Services. The Regional Director had affirmed the
initial
disallowance determination for the period July 1, 1986 to March
31,
1989 by the Director, Division of Cost Allocation (DCA), Region II,
that
New Jersey was required to return $2,571,215 to the federal
government.
1/ That amount represented the federal share at 50 percent
federal
financial participation (FFP) for administrative expenditures for
New
Jersey Department of Labor (NJDOL) wage reporting costs. The
DCA
Director found that NJDOL billed DHS for costs of wage data
collection.
Citing provisions of the Social Security Act (Act) and
Departmental
regulations, the DCA Director found that these provisions allow
federal
reimbursement only for the cost of matching wage data and do not
provide
reimbursement for the cost of collecting and recording the wage
data.
The DCA Director also noted that the disallowance included
allowable
costs for wage matching activities; New Jersey had not
separately
identified these costs and the DCA Director could not separate
them out.
Therefore, he determined to disallow the entire amount.
New Jersey also appealed two subsequent disallowances for the period
April
1, 1989 through December 31, 1989, which were consolidated with
the initial
disallowance in Docket No. 90-226 for purposes of the appeal
process.
The disallowance in Docket No. 90-248 was in the amount of
$82,866 FFP for
costs claimed under title IV-D, and the disallowance in
Docket No. 90-15 was
in the amount of $313,974 FFP for costs claimed
under title IV-A. Thus,
the total amount in dispute in these
consolidated appeals is $2,968,055.
For the reasons discussed below, we conclude that New
Jersey's
administrative costs of collecting wage data are not reimbursable
under
its title IV-A, IV-D, XIX and Food Stamp Programs. New Jersey
uses its
unemployment program to operate its wage reporting system, and
the
statutory intent under section 1137(a) of the Act was that costs
of
collecting wage data should be reimbursed under that
program.
Therefore, we sustain DCA's disallowance with respect to the
costs
associated with collection of wage data. DCA did not dispute that
New
Jersey is entitled to federal reimbursement for the costs
associated
with wage matching activities, however. Thus, DCA should
provide New
Jersey with a reasonable opportunity to document what part of
the
disallowed costs were attributable to wage matching.
Statutory Background
Section 1137 of the Act, entitled "Income and Eligibility
Verification
System" (IEVS), provides in part as follows:
(a) In order to meet the requirements of this section, a
State
must have in effect an income and eligibility
verification
system . . . under which--
(2) wage information from agencies
administering
State unemployment compensation laws
available
pursuant to section 3304(a)(16) of the
Internal
Revenue Code of 1954, wage information
reported
pursuant to paragraph (3) of this
subsection,
and wage, income, and other information from
the
Social Security Administration and the
Internal
Revenue Service available pursuant to
section
6103(l)(7) of such Code, shall be requested
and
utilized to the extent that such information
may
be useful in verifying eligibility for, and
the
amount of benefits available under any
program
listed in subsection (b), as determined by
the
Secretary of Health and Human Services (or
in
the case of the unemployment
compensation
program, by the Secretary of Labor, or, in
the
case of the food stamp program, by the
Secretary
of Agriculture);
(3) employers in such State are
required,
effective September 30, 1988, to make
quarterly
wage reports to a State agency (which may be
the
agency administering the State's
unemployment
compensation law) except that the Secretary
of
Labor (in consultation with the Secretary
of
Health and Human Services, and the Secretary
of
Agriculture) may waive the provisions of
this
paragraph if he determines that the State has
in
effect an alternative system which is
effective
and timely for purposes of providing
employment
related income and eligibility data for
the
purposes described in paragraph (2);
(4) the State agencies administering
the
programs listed in subsection (b) adhere
to
standardized formats and procedures
established
by the Secretary of Health and Human
Services
(in consultation with the Secretary
of
Agriculture) under which-- (A) the agencies
will
exchange with each
other
information in their
possession
which may be of use
in
establishing or
verifying
eligibility or benefit
amounts
under any such program; (B)
such
information shall be
made
available to assist in the
child
support program under part D
of
title IV of this Act . . .
(7) accounting systems are utilized which
assure
that programs providing data receive
appropriate
reimbursement from the programs utilizing
the
data for the costs incurred in providing
the
data.
(b) The programs which must participate in the income
and
eligibility verification system are--
(1) the aid to families with dependent
children
program under part A of title IV of this Act;
(2) the medicaid program under title XIX of
this
Act;
(3) the unemployment compensation program
under
section 3304 of the Internal Revenue Code
of
1954;
(4) the food stamp program under the Food
Stamp
Act of 1977; and
(5) any State program under a plan
approved
under title I, X, XIV, and XVI of this Act.
Factual Background
Revisions to the New Jersey Unemployment Compensation Law in 1984
provided
that each employer subject to that statute shall file a report
with the
Controller of the New Jersey Department of Labor (NJDOL) within
30 days of
the end of each calendar quarter listing the Social Security
Number, name,
wages paid to, and the base weeks earned by each employee
during the
preceding calendar quarter. New Jersey Unemployment
Compensation Law,
R.S. 43.21 et seq., specifically 43.21-14(a)(2)(A) and
(C); see also
Appellant's Appeal File, p. 51 and Respondent's Exhibit
(Ex.) R-5.
Pursuant to this statutory change, NJDOL began collecting
quarterly wage
reports for the third calendar quarter of 1984, the
quarter ended September
30, 1984. Appellant's Appeal File, p. 51. New
Jersey instituted
this change prior to September 30, 1988, the date by
which states were
required by section 1137(a)(3) of the Act to have a
quarterly wage reporting
system. The costs of developing New Jersey's
quarterly wage reporting
system were funded by the U. S. Department of
Labor (USDOL). Transcript
(Tr.), p. 45.
Parties' arguments
DCA found that New Jersey is entitled to federal reimbursement
under
titles IV-A, IV-D, XIX of the Act and under the Food Stamp Program
(the
public assistance programs) only for the costs of matching wage
data,
and not for the costs associated with collecting wage data. DCA
said
section 1137 of the Act precluded reimbursement of the costs
of
collecting wage data. DCA contended that section 1137(a)(7) refers
only
to allocating costs of "providing" data to those programs using the
data
and that the regulations show that "providing" means the exchange
or
matching of data.
New Jersey argued that section 1137(a)(3) requires quarterly
wage
reporting to a state agency which may or may not be the state
agency
administering the unemployment insurance (UI) program. New
Jersey
contended that since it is required by section 1137(a)(3) to have a
wage
reporting system for collecting data, the cost of collection is
a
necessary cost of the programs that benefit from the data. New
Jersey
also contended that the cost of collecting wage data is part of the
cost
of providing data since a state must collect the data in order
to
"provide" it. New Jersey claimed that the cost of collecting
data
therefore is a joint cost which should be allocated under Office
of
Management and Budget (OMB) Circular A-87 to all benefitting
programs
and that it did so properly allocate the cost under a USDOL
approved
CAP.
Analysis
1. New Jersey implemented a wage reporting system for purposes of
its
UI program and the costs of collecting the data are properly costs
of
the UI program.
In New York State Dept. of Social Services, DAB No. 415 (1983), this
Board
addressed the allowability of collection costs of wage data under
a wage
reporting system. The costs had been disallowed on the basis
that they
were not a "necessary" cost of the public assistance programs
(as required by
OMB Circular A-87, Attachment A, Item C.1.a.) since
there was no requirement
for those programs that a state collect such
data and since USDOL would fund
such a system for a state's UI program.
The Board reversed the
disallowance. The Board stated that, while it
would normally defer to
an agency's discretionary decision on what was a
"necessary" cost, the
disallowance was based on the incorrect premise
that only required costs are
"necessary." The Board held that a cost
may be necessary for the proper
and efficient operation of a program
even if a state is not required to incur
the cost.
The Board also discussed in New York the differences between a state
which
chooses to be funded by USDOL as a "wage request" state and one
which chooses
to be funded as a "wage reporting" state. The Board found
that the New
York Department of Labor had opted to be a "wage request"
state because it
thought the type of wage reporting system USDOL would
fund was
inadequate. The Board also found that the particular wage
reporting
system at issue was designed by New York specifically to
provide information
for its public assistance programs and later placed
in the New York Tax
Department. 2/
This case is distinguishable from New York since the wage
reporting
system here was developed with funding from USDOL and was
established as
part of New Jersey's UI program. As New Jersey noted,
the New York
decision did not specifically state that collection costs from a
wage
reporting system set up for UI purposes would not be allowable under
the
public assistance programs. The decision did, however, distinguish
the
wage reporting system at issue there (which was conceived of as
serving
only public assistance activities and used primarily for that
purpose)
from files set up for other purposes. See New York at 10.
The importance of this distinction is that costs which are incurred
to
meet the requirements of a particular program should generally be
borne
by that program, even if they may tangentially benefit other
programs.
Moreover, OMB Circular A-87 prohibits a state from shifting costs
from
one program to another to avoid funding restrictions. OMB
Circular
A-87, Att. A, Item C.1.f. and C.2.b. Here, New Jersey did not
deny that
it had opted to be a wage reporting state for UI purposes, and
had
implemented its wage reporting system as part of its UI
program.
Indeed, the wage reporting requirements are part of its
unemployment
compensation law. New Jersey thus must incur the costs of
collecting
the data irrespective of whether the data is shared with the
public
assistance programs.
New Jersey argued nonetheless that the enactment of section 1137
had
rendered a wage reporting system a required cost of the
public
assistance programs, and that this was determinative of the
allowability
of the costs. Thus, we next discuss the effect and intent
of section
1137.
2. The legislative history of DEFRA indicates that Congress did
not
intend to use public assistance funds for the collection costs at
issue
here.
There is nothing in section 1137 of the Act which specifically
precludes
or authorizes reimbursement of the administrative costs of
collecting
wage data. The general rule of statutory construction is
that the plain
meaning of the statute should control. If the statute is
ambiguous,
however, it is necessary to consult the legislative history of a
statute
to determine legislative intent.
The statutory provisions for income and eligibility
verification
procedures were included in section 2651 of the Deficit
Reduction Act
(DEFRA) of 1984, Public Law 98-369, upon the recommendation of
the
President's Private Sector Survey on Cost Control (the
Grace
Commission). The Grace Commission noted that prior to
enactment of
this provision, wage data was used by the Social Security
Administration
and the Department of Agriculture for verifying eligibility
for certain
public assistance programs. See Senate Committee on
Finance,
Explanation of Provisions Approved By the Committee on March 21,
1984,
S. Prt. 169, Vol. 1, 98th Cong., 2d Sess. 993 (Committee Print).
The
federally administered Supplemental Security Income program
crosschecked
data supplied by the beneficiaries with Internal Revenue
Service and
Social Security data. State and local welfare agencies had
to request
this data too unless quarterly wage data was available from their
state
unemployment compensation agencies. The Commission determined
that 42
jurisdictions collected wage data on a quarterly basis through their
UI
programs, and three other states obtained this data through other
means.
The legislative history further indicates that the primary purpose of
the
new statutory provision was to authorize and require the Internal
Revenue
Service and Social Security Administration to make available for
the first
time to federal and state agencies data on earned and unearned
income for use
in administering public assistance programs. The
Committee anticipated
that this data would be provided to agencies by
means of exchanging
information and matching wage information data
collected by states under
their state unemployment compensation
programs.
The Committee also provided that:
. . . the quarterly wage reporting requirement does not
mandate
a State to collect data through its unemployment
insurance
program, nor would any State be required to change its UI
system
to comply with the amendment. Further, no State now
collecting
quarterly wage information through the UI system, or by
any
other means, would be required to alter its existing
wage
reporting format or the extent of its coverage so long as
an
existing system is reasonably comprehensive.
States which do not have quarterly wage reporting systems
would
have the option of developing such systems either within
their
unemployment compensation programs or elsewhere in
State
government. If States use the unemployment program to
operate
the wage reporting system, its costs would be reimbursable as
an
unemployment administrative expense on the same basis and
under
the same conditions as now apply to those 40 States
which
currently use wage reporting for the unemployment
program.
However, the amendment requires that other programs
utilizing
the data make appropriate payments for the costs involved
in
providing information. If a State elects to establish a
wage
reporting system in a manner which would not, under
existing
rules, qualify for reimbursement as an unemployment
insurance
program cost, the costs of the wage reporting system would
be
appropriately shared among all those programs required by
the
amendment to use the information it provides and among any
other
programs for which the State used the system.
Committee Print (emphasis added).
New Jersey and DCA did not address this part of the legislative
history.
However, this part shows that, while section 1137 of the Act does
not
unambiguously prohibit the allocation of the administrative costs
of
collecting wage information data, the clear intent of the
legislation
was that if a state had a qualifying wage reporting system under
the UI
program, these administrative costs would not be charged to the
other
programs that would use the data. Rather, those costs would
be
administrative costs under the UI program. 3/
The consideration here by the Grace Commission, which was established
to
find ways of saving costs in the federal government, was that
requiring
such a system would not result in any additional cost to the
federal
government nor the states. The reason was that, at the time
this
statute was enacted, most states already had quarterly wage
reporting
systems for their UI programs, the administrative costs of which
were
reimbursable by the USDOL. See also Notice of Proposed Rulemaking,
50
Fed. Reg. 10452 (1985). Consequently, the Grace Commission
reasoned
that the only additional costs to other federal benefit programs
would
be the cost of exchanging data or making data matches.
In light of the legislative history, we conclude that even though
Congress
required states to have a wage reporting system in section
1137(a)(3) of the
Act, Congress did not intend for the public assistance
programs to reimburse
states for the costs of collecting the underlying
data where the states were
already collecting such data under a UI
program. This conclusion also
makes sense since states that had wage
reporting systems for UI purposes
would not need to incur any additional
costs to meet the section 1137(a)(3)
requirements.
Thus, we reject New Jersey's argument that the requirement in
section
1137(a)(3) of the Act means that Congress intended to cover the
data
collection costs associated with New Jersey's quarterly wage
reporting
system.
3. The phrase "costs incurred in providing the data" in
section
1137(a)(7) of the Act and the federal regulations cannot reasonably
be
read as encompassing costs of collecting the data.
Given the pertinent legislative history discussed above, we agree
with
DCA's position that the word "providing" in section 1137(a)(7) and
the
implementing regulations covers only the matching or exchange of
data,
and not data collection.
First, the only reimbursement mentioned in the statute for the IEVS is
in
section 1137(a)(7) of the Act. That section ensures that
"programs
providing data receive appropriate reimbursement from the
programs
utilizing the data for the costs incurred in providing the
data."
Section 1137 of the Act does not specifically mention collection
costs
as part of the appropriate reimbursement. Thus, the issue is
whether
collection costs are part of the "costs incurred in providing the
data."
New Jersey's position that its collection costs are part of the costs
of
providing the data is inconsistent with the legislative
history
discussed above. Congress envisioned that an IEVS system would
build on
already existing wage reporting systems set up for UI purposes.
The language of the regulations also supports the conclusion that
there
was no intent to reimburse collection costs as part of the costs
of
providing data. Just the title of the applicable title IV-A
regulation,
"Requirements for requesting and furnishing eligibility and
income
information" is indicative. 45 C.F.R. .205.55. The
regulation
provides:
(e) The State agency must, upon request, reimburse
another
agency for reasonable costs incurred in furnishing income
and
eligibility information as prescribed in this section,
including
new developmental costs associated with furnishing
such
information, in accordance with specific agreements as
described
in 205.58.
(Emphasis added.) Similarly, the regulations of the other
programs
uniformly address only the costs of requesting and furnishing
data. See
42 C.F.R. .435.945 (Medicaid), 7 C.F.R. .272.8 (Food Stamp
program), and
20 C.F.R. .603.6(b)(5) (Federal-State Unemployment
Compensation
Program). The Child Support Enforcement program regulation
is even more
specific and provides for federal financial participation
only for the
utilization of state wage information resources. 45
C.F.R.
.304.20(b)(1)(iii)(B).
As DCA pointed out, all of the regulations address only the cost
of
furnishing the data after a state agency makes a request for
that
information. Also, the preamble to the proposed rule refers to
the
legislative purpose of section 1137 as the exchange of
information
already collected by participating programs and agencies.
See
Respondent's Ex. R-4, 50 Fed. Reg. 10450 (1985); Senate Committee
Print,
p. 169. Also, the background section of the Notice of
Proposed
Rulemaking entitled "Agreements" states that "[c]urrent rules
concerning
wage matching require that, prior to accessing wage information
from SSA
and/or UC agencies, AFDC and Food Stamp agencies must
execute
agreements. These agreements must detail the procedures for
requesting
and providing wage information." 50 Fed. Reg. 10450, 10455
(1985). The
term "accessing" indicates use of existing data.
Therefore, we conclude that the term "providing" does not
include
collecting information but only matching or exchanging the
information.
4. There is no bar to USDOL reimbursement of wage data
collection
costs.
During oral argument, New Jersey raised the theory that under the
Federal
Unemployment Tax Act (FUTA), 26 U.S.C. .3304, a state's
unemployment
compensation program is set up as a specific trust fund for
the sole purpose
of benefitting the unemployment program. Tr., p. 7.
New Jersey
contended that the trust fund cannot be used to fund a
generic activity such
as collection of wage data for non-unemployment
insurance benefit
programs. It argued that it would violate the USDOL
requirements if New
Jersey's UI program were to pay for costs associated
with non-UI
programs. New Jersey indicated also that it disagreed with
DCA here
that "USDOL funds, or must fund, all wage reporting costs . .
."
Appellant's Post-argument Brief, p. 5. 4/
We see no violation of USDOL requirements here if wage collection
costs
are funded as administrative costs of New Jersey's UI program.
New
Jersey argued that such funding would be reimbursement of the costs
for
the collection of wage data for non-UI programs is simply
untrue.
Quarterly wage reporting by employers to the state is not a
generic
activity. It is required by New Jersey's unemployment
statute.
Respondent's Ex. R-5. Whether or not the provisions of section
1137
existed, New Jersey statute would require the collection of
this
information for the proper administration of its UI program. Tr.,
p.
64. DCA indicated and New Jersey did not dispute that no
additional
wage data collection is done for New Jersey's Department of
Human
Services. Tr., p. 29. New Jersey did not show that the FUTA
provisions
have been interpreted to preclude the allocation of wage data
collection
costs solely to New Jersey's UI program as an administrative cost
of
that program. Since the collection of the wage data is required
and
necessary for New Jersey's UI program, the use of the trust fund
to
provide reimbursement for these costs appears appropriate.
New Jersey indicated that since DCA has no programmatic or
fiscal
responsibility for the UI program it cannot presume what costs
are
reimbursable by the agency administering that program. New
Jersey,
however, explained that under sections 901 and 301 of the
Social
Security Act, USDOL must provide payments to New Jersey for
the
administration of the New Jersey UI program. Since the collection
of
wage information is required under New Jersey's UI program, under
the
provisions of the sections 901(c) and 302 of the Act, these costs
are
properly considered administrative costs of New Jersey UI program. 5/
Contrary to New Jersey's contention, we see no inconsistency here
with
these provisions and the allocation of the administrative costs
of
collection of quarterly wage reports solely to the New Jersey
UI
program. The fact that public assistance programs may request
wage
information that has been collected for the New Jersey UI program
does
not mean that the cost of collecting the information in the first
place
should be an administrative cost of the public assistance
programs.
Thus, we agree with DCA that these costs are fully allocable to
New
Jersey's UI program even if USDOL is not presently funding the
complete
cost of New Jersey's wage data collection costs.
Therefore, we conclude that reimbursement from the public
assistance
programs for the period in question is limited to the cost of
matching
and exchanging wage data. 6/ The collection costs of the
wage
information data are not reimbursable under these programs since
New
Jersey had a qualifying wage reporting system under its UI program.
5. An approved cost allocation plan does not preclude the
disallowance
action here.
New Jersey argued that under OMB Circular A-87, Attachment A, Item C.1
and
2, the wage collection costs are both allowable and allocable to the
public
assistance programs because they are necessary and reasonable
costs for the
proper administration of these programs and because they
benefit from NJDOL's
collection of this wage data. New Jersey also
indicated that the USDOL,
who has responsibility for administering the
UI program, accepted New
Jersey's cost allocation plan which allocated
the collection costs between
the State unemployment program and these
other benefitting programs.
First, as we discussed above, New Jersey opted to be a wage
reporting
state for its UI program and to satisfy the requirements of its
UI
statute. The State, therefore, incurs the costs of collecting
data
irrespective of whether the data may be shared with the
public
assistance programs. Consequently, while the public assistance
programs
may tangentially benefit, we conclude that the wage data
collection
costs were not allowable under these programs. As discussed
above, in
light of the legislative history and implementing regulations,
section
1137 cannot reasonably be read as authorizing FFP in the costs at
issue
here. Moreover, general authority to provide funding for
administrative
costs is limited to costs found necessary for the proper and
efficient
administration of the programs. See e.g., .. 403(a)(3) and
1903(a)(7)
of the Act; OMB Circular A-87, Att. A, Item C.1.a. DCA
reasonably found
that collection costs were not necessary costs of the public
assistance
programs because the State was already incurring the costs for its
UI
program.
Furthermore, the fact that New Jersey allocated the collection costs in
a
cost allocation plan that was accepted by the USDOL does not mean that
those
costs are allowable. See Oregon Dept. of Human Resources, DAB No.
729
(1986), and New York Dept. of Social Services, DAB No. 759 (1986).
The cost
allocation plan merely determines if the State's method of
allocation is
permissible and fairly distributes costs; there is no
determination as to
whether the costs allocated within the plan are in
fact allowable costs of
the programs to which they are allocated.
Moreover, cost allocation plans are generally approved by a
Department's
Division of Cost Allocation. This Division has no
programmatic
responsibility and is not necessarily knowledgeable about
whether a
particular cost allocated in the plan is allowable or not.
Contrary to
what the State argued, the mere fact that DCA may agree with
USDOL that
the allocation method in the cost allocation plan is appropriate
for
distributing wage matching costs does not mean that DCA agrees
that
collection costs are properly treated as joint costs of all
the
programs, rather than being direct costs of the UI program, nor that
HHS
has interpreted the Act to permit reimbursement of these
collection
costs by public assistance programs. Moreover, New Jersey
did not
allege that USDOL had consulted with HHS about the treatment
of
collection costs.
Therefore, we conclude that approval of New Jersey's cost allocation
plan
is not a determination that the costs are also allowable. Thus, we
find
that the cost allocation plan did not preclude the disallowance
action
here.
Conclusion
For the reasons discussed above, we conclude that New
Jersey's
administrative costs of collecting wage data are not reimbursable
under
its title IV-A, IV-D, XIX and Food Stamp programs. Therefore,
we
sustain DCA's disallowance with respect to the costs associated
with
collection of wage data. DCA did not dispute that New Jersey
is
entitled to federal reimbursement for the costs associated with
wage
matching activities, however. Thus, DCA should provide New Jersey
with
a reasonable opportunity to document what part of the disallowed
costs
were attributable to wage matching.
_____________________________ Donald F. Garrett
_____________________________ Norval D. (John) Settle
_____________________________ Judith A. Ballard Presiding
Board
Member
1. The initial disallowance of $2,571,215 for the period July 1,
1986
through March 31, 1989 in Docket No. 90-226 required adjustments in
the
amount of $554,665 to title IV-A of the Social Security Act, $285,710
to
title IV-D, $770,223 to title XIX, and $960,617 to the Food
Stamp
Program. The amount disallowed for the Food Stamp Program is not
within
the jurisdiction of this Board, although the disapproval of a
cost
allocation plan is, as are disallowances under titles IV-A, IV-D,
and
XIX.
2. DCA mischaracterized the New York decision by describing the
system
at issue there as a wage request system. The New York system was
a wage
reporting system, but was not set up for UI purposes. Instead,
New York
had a separate wage request system for UI purposes.
3. The DEFRA provisions required that by September 30, 1988,
states
must have employers make quarterly wage reports to a state agency
unless
the state has received approval for an alternate system from
the
Secretary of Labor. At the time the legislation was enacted in
1984,
only eight states did not already have quarterly wage reporting
by
employers.
4. The State asserted vaguely that USDOL was no longer fully
funding
the cost of its wage reporting system, but did not explain whether
this
was simply because the State had allocated the costs to the
public
assistance programs, because of UI funding restrictions, or for
some
other reason.
5. Section 904(g) of the Act provides that unemployment
administrative
expenditures as they relate to an unemployment trust fund are
defined to
include expenditures for titles III and IX of the Act as well as
those
relating to FUTA. Furthermore, section 3304 of FUTA discusses
USDOL
approval of state unemployment compensation laws.
6. The State did not refer to the disallowance relating to the
quarter
ended September 30, 1986 which preceded the effective date of
the
statutory provisions of the IEVS. DCA, however, indicated that
the
regulations then in effect for the title IV-A and IV-D programs and
the
Food Stamp program limited reimbursement to the cost of requesting
and
providing wage information. See 45 C.F.R. ..205.58(b)(5)
and
304.20(b)(1)(iii)(B); 7 C.F.R. .272.8 (1984). In any event, we
conclude
that our analysis for the period prior to the effective date of
section
1137 would essentially be the same: the collection costs are
not
necessary costs of the public assistance programs because the State
has
a qualifying wage reporting system under its State
UI