Illinois Department of Children and Family Services, DAB No. 1564 (1996) Department of Health and Human Services DEPARTMENTAL APPEALS BOARD Appellate Division SUBJECT: Illinois Department DATE: February 27, 1996 of Children and Family Services Docket No. A-95-61 Control No. A-05-92-00075 Decision No. 1564 DECISION The Illinois Department of Children and Family Services (Illinois or DCFS) appealed a determination by the Administration for Children and Families (ACF) disallowing $5,046,580 in federal financial participation (FFP) claimed by Illinois under title IV-E of the Social Security Act (Act). The disallowance was based on an audit performed by the Office of Inspector General (OIG), Department of Health and Human Services, of foster care maintenance payments. Using a random sample of 200 cases, OIG determined that in 37 cases the court orders failed to meet title IV-E requirements, primarily the requirement in section 472(a)(1) of the Act for a determination that reasonable efforts (RE) were made to prevent the child's removal from his or her home. Using a standard scientific estimation process, OIG arrived at the disallowance amount by projecting the results of the OIG review to the universe from which the sample was drawn. The OIG audit covered title IV-E foster care maintenance payments by Illinois for the period October 1, 1988 through September 30, 1990. Illinois Ex. 8. The 200 sample payments were drawn from a population of 274,163 maintenance payments claimed by Illinois during the period having a total value of approximately $106 million (approximately $53 million in FFP). The audit report found that 37 maintenance payments (18.5 percent of the 200 sample cases) failed to meet title IV-E eligibility requirements. OIG then extrapolated its results to the universe of 274,163 maintenance payments and found that there was a 95 percent probability that at least $10,093,160 ($5,046,580 FFP) was inappropriately charged to the title IV-E program. ACF then adopted the OIG findings and issued a disallowance determination. Illinois Exs. 10 and 12. Illinois appealed ACF's determination to this Board. Illinois conceded that six of the questioned payments were ineligible for FFP, but contended that the other 31 payments were eligible for FFP. Based on evidence submitted with Illinois' brief and supplemental brief, ACF found that three cases met the RE requirement and therefore passed. After the oral argument held in this appeal, ACF found that three more cases should pass: two cases were found to have met the RE requirement, and the RE requirement was found not applicable to another case. ACF has not provided a revised disallowance amount reflecting the six cases that were originally found ineligible but have now been passed by ACF. At the oral argument held in this appeal, ACF estimated that the approximate value of each case in determining the amount of the disallowance was $140,000. Tr. at 51. Thus, there are now 25 cases in dispute between the parties. In addition to raising a wide range of arguments concerning the 25 contested cases, Illinois argued that this disallowance was contrary to congressional policies and that extrapolation of the sampling results to the universe of title IV-E payments would be inappropriate under the circumstances here. For the reasons discussed below, we uphold ACF's findings on seven of the contested cases and reverse the findings on 18 cases. We reject the other arguments raised by Illinois concerning whether this disallowance is contrary to congressional policies and whether it is appropriate here to extrapolate the sampling results to the universe of title IV-E payments. Accordingly, we direct ACF to recalculate the amount of the disallowance in light of our findings concerning the seven failed cases and the six additional cases conceded by Illinois. Statutory Background and ACF Interpretations Under title IV-E of the Act, federal matching of state foster care maintenance payments is available for children in foster care who would otherwise be eligible for Aid to Families with Dependent Children (AFDC) under title IV-A of the Act. Prior to the enactment of title IV-E (in the Adoption Assistance and Child Welfare Act of 1980, Public Law No. 96-272), funding for foster care maintenance payments was available under title IV-A. States were given until October 1, 1982 to begin operating under approved title IV-E plans. Section 472(a) provides in pertinent part that foster care maintenance payments will be available for -- a child who would meet the [AFDC eligibility] requirements . . . but for his removal from the home of a relative . . . , if-- (1) the removal from the home . . . was the result of a judicial determination to the effect that continuation therein would be contrary to the child's welfare and (effective October 1, 1983) that reasonable efforts of the type described in section 471(a)(15) of this title have been made. . . . Section 471(a)(15) in turn requires that, effective October 1, 1983, a state plan under title IV-E must provide that -- in each case, reasonable efforts will be made (A) prior to the placement of a child in foster care, to prevent or eliminate the need for removal of the child from his home, and (B) to make it possible for the child to return to his home. The legislative history of Public Law No. 96-272 makes clear that Congress was concerned that children were being removed from their homes unnecessarily and placed in foster care. In discussing the requirement for a judicial determination, the relevant Senate committee report described such a determination as "an important safeguard against inappropriate [state] agency action." Sen. Rep. No. 336, 96th Cong., 1st Sess. 16 (1979). Regulations at 45 C.F.R. Part 1356 implementing Public Law No. 96-272 contained provisions requiring that states provide preplacement preventive services and describe in a child's case plan the services offered and provided. 47 Fed. Reg. 30,925 (1982) and 48 Fed. Reg. 23,115 (1983). The regulations did not elaborate on the statutory judicial determination requirement. In a policy announcement issued on January 13, 1984, the Administration for Children, Youth and Families (ACYF), a subagency of ACF, addressed questions regarding the requirement for a judicial RE determination. The policy announcement explained: The court, after hearing the evidence, must be satisfied that reasonable efforts . . . have been made. Review and approval of the [state] agency's report and recommendation alone are not sufficient to meet the requirements of the Act; the court must make a determination that the agency's efforts were, in the judgment of the court, reasonable for preventing placement. With regard to emergency situations, if the agency's judgment was that services could not have prevented removal of the child, the court at the time of the adjudicatory hearing must find that the lack of preventive efforts was reasonable. ACYF-PA-84-1, ACF Ex. 1, 4th page. ACYF also issued an information memorandum transmitting a copy of ACYF's "Financial Review Guide For On-Site Reviews Of The Title IV-E Foster Care Program." ACYF-IM- 85-25 (August 14, 1985), Illinois Ex. 2. The review guide explains to reviewers that the court order (in other than voluntary placements) "must contain a statement to the effect that continuation of residence at home is contrary to the welfare [CTW] of the child or that placement is in the best interests of the child." 1/ The guide also explained that, after October 1, 1983, the court order must state either that "reasonable efforts were made to prevent removal from the home" or "it was not appropriate or in the best interests of the child to prevent removal from the home." ACYF-IM-85-25, Attachment A, Title IV-E Foster Care Eligibility Review Checklist Guide, at 2-3. ACYF-IM-85-25 also provided guidance on the question of subsequent judicial determinations: . . . subsequent court orders (but no later than the month being reviewed) should be investigated to determine whether there has been a judicial determination to the effect that reasonable efforts had been made to reunite the child with the family. If there is such a determination, the child becomes eligible from the beginning of the month in which that determination is made. Attachment A at 3. The checklist for title IV-E reviews included in ACYF-IM- 85-25 gave rise to questions about the judicial determination requirement which were addressed in ACYF- PIQ-86-02 (May 8, 1986), Illinois Ex. 3. That issuance explained circumstances which warranted a finding that the appropriate judicial determination had been made, even where the court order itself did not contain language to satisfy the statutory requirements. The issuance stated in pertinent part: The fact that State laws include generic provisions referring to a class of children is not sufficient to satisfy the requirements of section 472, which relate to an individual determination for each child. However, if State law unambiguously requires that removal may only be based on a determination that remaining in the home would be contrary to the child's welfare (and in the appropriate circumstances, that removal can only be ordered after reasonable efforts to prevent removal have been made), it must be assumed that a judge who orders a child's removal from the home in accordance with that State law does so only for the reasons authorized by the State statute. This conclusion can be drawn only if the State law clearly allows removal under no other circumstances except those required under section 472(a)(1) of the Act. If a State can show that it has such a clear and unequivocal State law, and if the court order is expressly based on that law, then the order can be accepted as sufficient evidence that the required determinations have been made. ACYF-PIQ-86-02, at 2-3 (emphasis in original). The issuance also explained that language in a petition submitted to a court would not suffice to meet the requirements unless the court order expressly adopted the relevant language of the petition and made clear that a judicial determination had been made. Id. at 5. On August 11, 1986, Dodie Livingston, Commissioner for ACYF, issued a memorandum to Regional Administrators and Regional Program Directors (the Livingston memorandum). Illinois Ex. 4. The Livingston memorandum noted that, prior to the transfer of the foster care program from title IV-A to title IV-E, ACYF's policy, set out in SRS- PIQ-75-21, dated April 2, 1975 (ACF Ex. 4), was that the requirement for a best interests determination was satisfied where there was "a petition to the court stating the reason for the agency's request for custody, followed by a court order granting the agency's petition for custody . . . ." Illinois Ex. 4, at 2. The Livingston memorandum further stated that, because some state agencies believed, until the issuance of ACYF-PIQ- 86-02 on May 8, 1986, that this practice continued to be acceptable in the title IV-E program -- disallowances will not be taken where the State agency was following the precedent established in 1975, in cases in which the child entered care prior to October 1, 1986. This will allow States time to advise their courts that proper documentation of the judicial determination must be available for each child removed from his home by the court in order to be eligible under title IV-E. Payments will not be considered in error for a title IV-E financial review for this reason, either for purposes of disallowance or for a decision on a stage two review until after that date. Id. (emphasis in original). The Board examined the import of the Livingston memorandum in Pennsylvania Dept. of Public Welfare, DAB No. 1508 (1995). During the proceedings in that case, ACF stated that the requirement for a RE determination could also be met under the circumstances specified in the Livingston memorandum, even though both that memorandum and ACYF-PIQ-86-02 referred solely to CTW determinations. Pennsylvania at 18. The Board accordingly held that under the Livingston memorandum "a petition for the child's removal stating reasons which could support a CTW or RE determination, together with a court order granting that petition, is sufficient evidence that a CTW or RE determination was made if the child entered foster care before October 1, 1986." Id. at 3. In order to find a RE determination under the policy set forth in the Livingston memorandum, the petition granted by the court must contain allegations which would support a determination that reasonable efforts were made or that the lack of preventive efforts was reasonable. To support the latter determination, the petition would have to allege what were in effect emergency situations, under which it would not have been appropriate or in the best interests of the child to prevent removal. Analysis At the outset, we discuss the validity of the general principles Illinois would have us apply to the resolution of a large number of these cases. Illinois argued primarily that explicit court findings that the RE requirement was satisfied were not required in these cases because a court order contained language which paralleled or tracked a specific state statute that mandated a RE determination. Following our discussion of the general principles, we examine each of the 25 contested cases in the sample. We then discuss whether the disallowance was contrary to congressional intent. We conclude with an examination of whether extrapolation of the error rate to the universe of title IV-E payments is proper to determine the amount of the disallowance here. I. A court order may provide sufficient evidence that the court was acting pursuant to a statute that requires the court to make a RE determination if the court order follows or tracks language that is highly significant or unique to that statute and if there exist other indicia that the court is applying the statute. Illinois argued that ACF's own policy, as set forth in ACYF-PIQ-86-02, allows a state to establish compliance with section 472 judicial determination requirements despite the absence of express wording in a court order itself that the requisite determinations were made. Illinois noted that ACYF-PIQ-86-02 provided that a state could establish that a CTW determination was made by showing that a court order was "expressly based" on "a clear and unequivocal State law" which "requires that removal may only be based on a determination that remaining in the home would be contrary to the child's welfare." (Emphasis in original.) In West Virginia Dept. of Health and Human Services, DAB No. 1257 (1991), the Board found that a court order could be "expressly based" on a state law within the meaning of ACYF-PIQ-86-02 even if it did not specifically cite the state law, as long as there was other evidence in the court order that the court intended to rely on that law. At 13; see also Pennsylvania Dept. of Public Welfare, DAB No. 1392 (1993). In West Virginia, the Board found cases eligible where a court, while not citing a statute, used language in its order which closely followed the language in a statute which required a RE determination. At 24- 25, 33-34. Illinois argued that during the period at issue its Juvenile Court Act (37 Ill. Rev. Stat.  707-1, et seq. (1983)) required Illinois courts to make determinations that removal of a child from his or her home was in the best interests of the minor and that reasonable efforts were made to prevent or eliminate the need for removal of the child from the home. Illinois asserted that throughout the period at issue a child in Illinois who was in need of intervention would likely undergo various types of judicial hearings in the process of being removed from the home and placed in foster care, including a Shelter Care or Temporary Custody (TC) Hearing and a Dispositional Hearing (DH). Regarding the TC hearing, Illinois asserted that a court could not prescribe shelter care unless it made a finding, pursuant to 37 Ill. Rev. Stat.  703-6(2) (1983), "that it is a matter of immediate and urgent necessity for the protection of the minor or of the person or property of another that the minor be . . . placed in a shelter care facility or that he is likely to flee the jurisdiction of the court . . . ." Illinois argued that the CTW determination was necessarily included in the "matter of immediate and urgent necessity" language of  703-6(2). 2/ The statute was then amended, effective January 14, 1985, to provide: (2) . . . If the court finds that it is a matter of immediate and urgent necessity for the protection of the minor or of the person or property of another that the minor be detained or placed in a shelter care facility or that he or she is likely to flee the jurisdiction of the court, and further, for minors described in Sections 2-3, 2-4 and 2-5 3/ finds that reasonable efforts have been made or good cause has been shown why reasonable efforts cannot prevent or eliminate the necessity of removal of the minor from his or her home, the court may prescribe detention or shelter care and order that the minor be kept in a suitable place designated by the court or in a shelter care facility designated by the Department of Children and Family Services or a licensed child welfare agency . . . otherwise it shall release the minor from custody. . . . 37 Ill. Rev. Stat.  703-6(2) (1985) (emphasis added by Illinois, quoting statute at p. 15 of its brief). Thus, Illinois concluded, as of January 14, 1985, courts in Illinois were required by statute to make a RE determination as a necessary prerequisite to prescribing shelter care for a minor. Illinois therefore maintained that any Temporary Custody Order (TCO) in which there is sufficient evidence that the court was acting pursuant to  703-6(2) (1985) must be assumed to include the findings required by the statute, and that those findings are sufficient to satisfy the section 472 judicial determination requirements. Regarding the statutory provisions relating to a DH, Illinois' pertinent statute provided: (1) If the court finds that the parents, guardian or legal custodian of a minor adjudged a ward of the court are unfit or unable, for some reason other than financial circumstances alone, to care for, protect, train, or discipline the minor, or are unwilling to do so, and that appropriate services aimed at family preservation and family reunification have been unsuccessful in rectifying the conditions which have led to such a finding of unfitness or inability to care for, protect, train or discipline the minor, and that it is in the best interests of the minor to take him from the custody of his parents, guardian or custodian, the court may *** (f) in the case of a neglected or dependent minor under 18 years of age adjudged a ward of the court under Section 2-4 or 2-5, commit him to the Department of Children and Family Services for care and service. 37 Ill. Rev. Stat.  705-7(1) (1983) (emphasis added by Illinois). 4/ Illinois asserted that this statute clearly and unambiguously required, in order for a child to be placed with DCFS as a result of a DH, that a court make a determination of "reasonable efforts." Illinois contended that any Dispositional Order (DO) that clearly evidences that the court was acting pursuant to  705- 7(1) must be held sufficient to establish compliance with the RE requirement of section 472. Illinois further contended, based on ACYF-PIQ-86-02 and the Board's holding in West Virginia, that the language in the court orders at issue here so followed or tracked the language of the above Illinois statutes that it can reasonably be concluded that the courts in fact made RE determinations. ACF did not contest Illinois' interpretation of its state statutes as requiring RE determinations. Instead, ACF asserted that Illinois was unable to show any express reliance on any of the state statutes containing RE language quoted above as none of the statutes were cited in any of the court orders in the contested sample cases. ACF referred to Pennsylvania where the Board, citing its Ruling on Reconsideration of DAB No. 1392, stated that "the mere existence of a statute which required a `contrary to the welfare' determination . . . does not establish that the court in fact made such a determination in any particular case . . . ." Pennsylvania at 25. Notwithstanding ACF's arguments, we conclude, in 17 of the contested cases discussed in Part II, that the court orders tracking or following significant or unique language of statutes requiring RE determinations provide sufficient evidence that the court was acting pursuant to the requirements of the statute, and thus had made a RE determination, when it removed the child from his or her home. The two statutes relied upon by Illinois as having been applied by the courts in the contested cases were the only Illinois statutes relating to the type of foster care removals under consideration here -- either the removal of the child to shelter care or the placement of the child with the Department of Children and Family Services. Both of these statutes contained requirements that the judge make a RE determination. In each of the cases where Illinois argued the court applied one of those statutes, the court used significant or unique language tracking or paralleling the particular statute. With respect to Illinois' TCOs, the most telling indicator that the court was relying upon  703- 6(2) was its recitation of the statutory language that "it is a matter of immediate and urgent necessity for the protection of the minor . . . that the minor be . . . placed in a shelter care facility . . ." With respect to DOs, the strongest indicators that the court was relying upon  705-7(1) of the Juvenile Court Act are findings that "the parents of a minor . . . are unfit or unable, for some reason other than financial circumstances alone, to care for, protect, train or discipline the minor, or are unwilling to do so . . . and that it is in the best interest of the minor to take him from the custody of his parents, guardian or custodian . . . " Moreover, in each case there were one or more of the following indicia that the court was applying the particular statute: o The structure of the order tracked the statutory structure. o The orders listed all or most of the various disposition options set out in the statute. o The dispositions pursuant to these orders were consistent with the dispositions authorized by the statutes. Thus, we conclude that when the contested court orders contain language that tracks or follows significant or unique language from one of the two statutes relied upon by Illinois and when there are other indicia that the court was applying the particular statute, these cases may be viewed as having complied with the RE determination. As we discussed above, this approach is consistent with prior Board decisions. See West Virginia; and Pennsylvania, DAB No. 1392, at 11, 13. We also agree with Illinois that ACF's reliance on Pennsylvania, DAB No. 1508, and on the Board's Ruling on Reconsideration of DAB No. 1392 for a contrary result is misplaced. Although the Board did find in that Ruling that the state had not proved that its court orders relied on a particular state statute, the basis for the Board's conclusion was that Pennsylvania sought to rely upon the court's use of a single word, the word "dependent," to show reliance on the statute. Ruling at 6. The Board found use of the word "dependent" to be insufficient because, among other things, it was used in other state statutes and thus did not necessarily refer to the statute in question. The Board did not require express citation to the statute and did not reject the principle that reliance upon a particular statute can be shown by the use of parallel language and other factors. II. The Individual Cases at Issue Below we review the individual sample cases at issue, dividing them, as Illinois did in its arguments, between the "Livingston" and "post-Livingston" cases, i.e., cases where the children entered care before October 1, 1986 or on or after that date. There are 18 "Livingston" cases in dispute: Sample Nos. 6, 14, 44, 50, 51, 52, 60, 66, 76, 85, 87, 91, 100, 103, 153, 172, 179, and 183. There are six "post-Livingston" cases in dispute: Sample Nos. 21, 33, 37, 88, 126, and 137. ACF found that all of the above 24 cases were ineligible because of the court's failure to make a RE determination; Sample No. 21 was also failed for the lack of a CTW determination. One case, Sample No. 15, involves only the issue whether the foster home in which a child was placed was properly licensed during the month the title IV-E payment was made. In the Livingston cases, Illinois adopted a two-pronged approach as to why the Board should find that the court made a RE determination. Illinois, relying on Pennsylvania, DAB No. 1508, argued that the petition showed either that reasonable efforts had been made or that an emergency situation existed, in which event the court could have found that the lack of reasonable efforts was justified. Furthermore, Illinois argued that a TCO or DO in some cases satisfies the RE requirement because it tracks the language of an Illinois state statute that calls for a RE determination. In the post-Livingston cases, Illinois contended that the requirement for a RE determination was met because a TCO or DO tracked the language of an Illinois state statute requiring a RE determination. In examining these cases we note preliminarily that the issue is whether Illinois has met the burden of documenting its claims for FFP in the payments. Irrespective of the fact that the courts operated independently of DCFS, Illinois was responsible for assuring that there was adequate documentation of the determinations required by section 472(a)(1) of the Act. As the Board stated in West Virginia: The denial of FFP in those cases where there is inadequate documentation does not necessarily mean that the court's action was unsound or that the proper social work was not done, but simply represents a finding that the state agency has failed to document that its claims met the conditions Congress established as a prerequisite for title IV-E funding. At 10. THE LIVINGSTON CASES Sample No. 6 -- ineligible A February 22, 1984 Petition alleges that "the minor is neglected in that the minor's parent does not provide the care necessary for the minor's well-being" and that "the minor is dependent in that the minor is without proper care due to the mental and/or physical disability of the parent." A February 23, 1984 TCO finds probable cause that the minor is neglected and that "[i]t is a matter of immediate and urgent necessity that a temporary custodian or guardian be appointed for the protection of the minor." Illinois argued that the language of the TCO parallels  703-6(2). Illinois further argued that the granting of the Petition and the finding of "immediate and urgent necessity" indicate that this was an emergency situation in which reasonable efforts were not required to be made. Illinois' reliance on  703-6(2) is misplaced. The version of that provision which contains the RE language did not become effective until January 14, 1985. The TCO provided here was issued nearly a year earlier. Furthermore, the Livingston policy would not apply to this case as it is not obvious from the Petition that an emergency situation existed here. Here there is insufficient detail either in the Petition or in the TCO to establish that this was such an emergency that the court would have to have determined that the lack of reasonable efforts to prevent the child's removal was justified. This case is therefore ineligible. Sample No. 14 -- eligible An April 19, 1985 Petition alleges the minor child is "neglected in that the minor's parent does not provide the care necessary for the minor's well-being" and that "the minor is abused in that the minor's environment is injurious to the minor's welfare." The Petition further states that the minor is abused in that "his parent commits or allows to be committed . . . a sex offense . . ." and "his parent inflicts excessive corporal punishment . . . ." An April 19, 1985 TCO finds probable cause that the minor is neglected and that "[i]t is a matter of immediate and urgent necessity that a temporary custodian or guardian be appointed for the protection of the minor." An October 1, 1986 DO contains the following language from  705-7(1): "the parent, guardian, or legal custodian is unfit, unable for some reason other than financial circumstances alone to care for, protect, train or discipline the minor, or is unwilling to do so, it is in the best interest of the minor to take him from such custody." The DO then lists options, which track paragraphs (a) through (f) of  705-7(1), with the option of custody to DCFS being checked. Illinois argued that it could be inferred from the Petition that reasonable efforts had failed or that this was an emergency in which the lack of efforts was reasonable. Illinois further argued that the RE requirement is satisfied because both the TCO and the DO track the language of state statutes requiring a RE determination. Although the TCO does not refer to a petition, the fact that the TCO and the Petition bear the same date support a reasonable inference that the TCO was based on the Petition. The Petition alleges such neglect and abuse that what could be considered an emergency situation has arisen, so that the Livingston policy would apply to support a finding that the RE requirement was met. Furthermore, the language of the TCO tracks language in  703-6(2), which we found above in Part I of this decision requires a RE determination. Additionally, the language of the DO tracks the language of  705-7(1), which we also found above requires a RE determination. Therefore, this case is eligible on several grounds. Sample No. 44 -- eligible A February 27, 1984 Petition alleges that the "minor is neglected as to the care necessary for the minor's well- being and is abandoned" and that "[i]t is in the best interest of the minor and the public that the minor be adjudged a ward of the court." An April 26, 1984 Supplemental Petition alleges that "[o]n or about March 12, 1984, mother made a plan for her grandmother to watch the minor overnight. Mother failed to return until March 20, 1984." An April 30, 1984 TCO states that the appointment of a temporary custodian is "a matter of immediate and urgent necessity." A March 12, 1986 DO contains the following language from  705-7(1): "the parent, guardian, or legal custodian is unfit, unable for some reason other than financial circumstances alone to care for, protect, train or discipline the minor, or is unwilling to do so, it is in the best interest of the minor to take him from such custody." The DO then lists options which track paragraphs (a) through (f) of  705-7(1), with the option of custody to DCFS being checked. While the TCO on its face refers to a petition and the Petition does allege neglect, there is no evidence of either reasonable efforts having been made or of an emergency based on which a court could determine that the lack of efforts was reasonable. Thus, there is no basis for finding that there was an RE determination under the Livingston policy. The language of the subsequent DO, however, tracks the language of a statute which requires a RE determination. Therefore this case is eligible, based on our discussion in Part I of this decision, as it can reasonably be inferred that the court relied on this statute and made a RE determination. Furthermore, under the policy set forth in ACYF-IM-85-25, the child became eligible for title IV-E assistance from the beginning of the month in which the DO was issued, March 1986. Sample No. 50 -- eligible A September 17, 1984 DO contains the following language from  705-7(1): "the parent, guardian, or legal custodian is unfit, unable for some reason other than financial circumstances alone to care for, protect, train or discipline the minor, or is unwilling to do so, it is in the best interest of the minor to take him from such custody." The DO then lists options which track paragraphs (a) through (f) of  705-7(1). The language of the DO tracks the language of a statute which requires a RE determination. The DO contains all the options contemplated by  705-7(1), so that the court was obviously acting pursuant to that statute. Therefore, this case is eligible, based on our discussion in Part I of this decision, as it can reasonably be inferred that the court relied on that statute and made a RE determination. Sample No. 51 -- ineligible An August 28, 1986 DO places the minor under the guardianship of DCFS. Illinois stated that the date of the DO established that it is subject to the Livingston policy, and said that Illinois was reserving the right to try to prove eligibility by reason of the petition. Illinois failed, however, to provide a petition or any other additional documentation for this case. Accordingly, this case is ineligible. Sample No. 52 -- eligible A November 27, 1984 Petition states that the minor "is neglected as to care necessary for his well-being in that . . . the minor was hospitalized with a diagnosis of failure to thrive having lost weight over a three-week period just prior to admission." A November 27, 1984 TCO finds that "[i]t is a matter of immediate and urgent necessity that the minor be detained or placed in shelter care" and orders that the minor be placed in the custody of DCFS. Illinois argued that it can be inferred that reasonable efforts had failed or that this was an emergency in which the lack of efforts was reasonable. A January 8, 1985 Order of Adjudication, finding the minor to be neglected, orders the parents "to cooperate with DCFS in preparing a plan for learning a nutritional program to care for the minor and or parenting classes" and orders DCFS "to work out a reunification case plan including a diary to be kept as to what the child consumes and include regular medical examination of the minor." A February 5, 1985 DO, in adjudging the minor to be neglected, finds that "the parents, guardian or legal custodian of said minor are unfit or are unable, for some reason other than financial circumstances alone, to care for, protect, train or discipline said minor, or are unwilling to do so, and that it is in the best interest of said minor and the public to take said minor from the custody of said minor's parents, guardians or custodian . . . ." Three options for the disposition of the minor follow, with the option to DCFS being checked. This language tracks the beginning language of  705- 7(1), which clearly requires a RE determination. The language of the DO parallels a statute which requires the court to make a RE determination. Therefore, this case is eligible, based on our discussion in Part I of this decision, as it can reasonably be inferred that the court relied on the statute and made a RE determination. Moreover, the language in the DO requiring the parents "to cooperate with DCFS and all programs or counseling established for them" is not incompatible with the court having made a RE determination since the court could be focusing on the possibility of a subsequent reunification of the child and family. Sample No. 60 -- eligible A May 28, 1985 Petition alleged that minors are neglected "as to care necessary for their well-being in that during the month of March 1985 on two occasions the mother has left the children unsupervised with inadequate food" and that "the mother's paramour . . . threw the minor . . . through a screen door while babysitting for the minor . . . ." A May 28, 1985 TCO finds that "[i]t is a matter of immediate and urgent necessity that the minor be detained or placed in shelter care" and orders that the minor be placed in the custody of DCFS. A July 23, 1985 DO, in adjudging the minor to be neglected, finds that "the parents, guardian or legal custodian of said minor are unfit or are unable, for some reason other than financial circumstances alone, to care for, protect, train or discipline said minor, or are unwilling to do so, and that it is in the best interest of said minor and the public to take said minor from the custody of said minor's parents, guardians or custodian . . . ." Three options for the guardianship of the minor follow, with the option to DCFS being checked. This language tracks the beginning language of  705-7(1). The language of the DO parallels a statute which requires the court to make a RE determination. Therefore, this case is eligible, based on our discussion in Part I of this decision, as it can reasonably be inferred that the court relied on the statute and made a RE determination. Sample No. 66 -- ineligible A July 11, 1983 Petition alleges that the minor is neglected "due to her brother . . . had sexual intercourse with her and that when her grandmother was informed ignored the information." Illinois argued that an October 31, 1983 DO granting guardianship to DCFS "would have to have been based" on  705-7(1), which required both a CTW and a RE determination. Illinois also argued that the date of the DO strongly suggests that the minor entered care initially prior to October 1, 1983 as a result of the July Petition, when the RE requirement was not in effect. There is nothing in the language of the DO which shows that the court relied on a statute which requires a RE determination or that references the Petition dated July 11, 1983. Nor is there any documentary evidence to support Illinois' theory that the minor was removed from the home under the care and support of the state prior to October 1, 1983. Thus, this case is ineligible. Illinois' arguments are based on assumptions about what the court would likely have done under the circumstances here, not on documentary evidence of what the court in fact did. Sample No. 76 -- eligible A February 10, 1986 DO contains the following language from  705-7(1): "the parent, guardian, or legal custodian is unfit, unable for some reason other than financial circumstances alone to care for, protect, train or discipline the minor, or is unwilling to do so, it is in the best interest of the minor to take him from such custody." The DO then lists options which track paragraphs (a) through (f) of  705-7(1). Illinois argued that the court was acting pursuant to  705-7(1), which clearly mandates a finding that satisfies the RE requirement. The language of the DO tracks the language of a statute which requires a RE determination. Therefore, this case is eligible, based on our discussion in Part I of this decision, as it can reasonably be inferred that the court relied on the statute and made a RE determination. Sample No. 85 -- eligible A March 22, 1985 Petition alleges that "the minor is neglected in that the minor's parent does not provide the care necessary for the minor's well-being" and that "the minor is abused in that the minor's environment is injurious to the minor's welfare." The Petition further explains that "the minor is abused in that his parent creates a substantial risk of physical injury to such minor by other than accidental means which would be likely to cause death, disfigurement, impairment of emotional health, or loss or impairment of a bodily function . . ." The Petition further alleges that "the minor is abused in that his parent inflicts excessive corporal punishment . . ." A March 27, 1985 TCO finds that "[i]t is a matter of immediate and urgent necessity that the minor be detained or placed in shelter care" and orders that the minor be placed in the custody of DCFS. A June 24, 1986 DO contains the following language from  705-7(1): "the parent, guardian, or legal custodian is unfit, unable for some reason other than financial circumstances alone to care for, protect, train or discipline the minor, or is unwilling to do so, it is in the best interest of the minor to take him from such custody." The DO then lists options which track paragraphs (a) through (f) of  705-7(1). Illinois argued that the court was acting pursuant to  705-7(1) which clearly requires a finding that satisfies the RE requirement, or, in the alternative, that one should be able to infer from the Petition that reasonable efforts had failed or that there was an emergency situation in which the lack of efforts was reasonable. The TCO does not on its face mention the Petition. Since the TCO was issued five days after the Petition, however, it can reasonably be inferred that the TCO was based on the Petition, which alleges such serious neglect and abuse that an emergency situation could be inferred. Therefore, based on the Livingston policy, we conclude that the court made a determination that reasonable efforts were not required. Furthermore, the language of the DO parallels a statute which requires the court to make a RE determination. Therefore, this case is eligible, based on our discussion in Part I of this decision, as it can reasonably be inferred that the court relied on the statute and made a RE determination. Sample No. 87 -- eligible An October 22, 1986 DO, in finding neglect, contains the following language from  705-7(1): "the parent, guardian, or legal custodian is unfit, unable for some reason other than financial circumstances alone to care for, protect, train or discipline the minor, or is unwilling to do so, it is in the best interest of the minor to take him from such custody." The DO then lists options which track paragraphs (a) through (f) of  705- 7(1). The language of the DO parallels a statute which requires the court to make a RE determination. Therefore, this case is eligible, based on our discussion in Part I of this decision, as it can reasonably be inferred that the court relied on the statute and made a RE determination. Sample No. 91 -- ineligible Illinois alleged that a June 10, 1986 transcript of a DH shows that the court was making the necessary findings under  705-7(1). There is no language in the transcript that shows that the court was relying on  705-7(1). While the transcript does refer to "services to mother being offered," there is no documentation from which it can be inferred that the court made a finding as to whether this constituted reasonable efforts. Therefore, it is not documented that the court made a RE determination. The case is accordingly ineligible. Sample No. 100 -- eligible A February 21, 1986 DO contains the following language from  705-7(1): "the parent, guardian, or legal custodian is unfit, unable for some reason other than financial circumstances alone to care for, protect, train or discipline the minor, or is unwilling to do so, it is in the best interest of the minor to take him from such custody." The DO then lists options which track paragraphs (a) through (f) of  705-7(1). The language of the DO tracks the language of a statute which requires a RE determination. Therefore, this case is eligible, based on our discussion in Part I of this decision, as it can reasonably be inferred the court relied on the statute and made a RE determination. Sample No. 103 -- eligible An April 4, 1985 Petition alleges that "the Minor is neglected in that the minor's parent does not provide the care necessary for the minor's well-being" and that "the minor is dependent in that the minor is without proper care due to the mental and/or physical disability of the parent." An April 4, 1985 TCO finds that "[i]t is a matter of immediate and urgent necessity that the minor be detained or placed in shelter care" and orders that the minor be placed in the custody of DCFS. Illinois argued that the language of the TCO makes clear that the court was acting pursuant to  703-6(2), which requires a RE determination. Illinois also argued that one should be able to infer from the Petition that reasonable efforts had failed or that there was an emergency situation in which the lack of efforts was reasonable. While the TCO does not on its face mention the Petition, both the TCO and the Petition bear the same date. It is therefore reasonable to assume that the TCO was based on the Petition, which alleged the minor was neglected. The Petition, however, neither provides evidence that reasonable efforts had been made nor details an emergency situation which would support a determination that lack of preventive efforts was reasonable. This case would therefore not qualify under the Livingston policy. The language in the TCO does, however, track the "immediate and urgent necessity" language of  703-6(2). As that statute does call for a RE determination, we find this case eligible, based on our discussion in Part I of this decision, as it can reasonably be inferred that the court relied on this statute and made a RE determination. Sample No. 153 -- eligible A September 3, 1985 Petition alleged that "the minor is neglected in that the minor's parent does not provide the care necessary for the minor's well-being." September 3, 1985 and February 16, 1986 TCOs find that "[i]t is a matter of immediate and urgent necessity that the minor be detained or placed in shelter care" and order that the minor be placed in the custody of DCFS. Illinois argued that the language of the TCOs makes clear that the court was acting pursuant to  703-6(2), which requires a RE determination. Illinois also argued that one should be able to infer from the Petition that reasonable efforts had failed or that there was an emergency situation in which the lack of efforts was reasonable. While the first TCO does not on its face mention the Petition, both the first TCO and the Petition bear the same date. It is therefore reasonable to assume that this TCO was based on the Petition, which alleged the minor was neglected. The Petition, however, does not detail an emergency situation which would support a RE determination. This case would therefore not qualify under the Livingston policy. The TCOs have, however, the "immediate and urgent necessity" language of  703-6(2). As that statute does call for a RE determination, we find this case eligible, based on our discussion in Part I of this decision, as it can reasonably be inferred that the court relied on this statute and made a RE determination. Sample No. 172 -- eligible A September 9, 1986 Petition alleges that the minor is "abused/neglected," in that: the "minor is under 18 years of age [minor was 6 months old at the time] and is an abused minor in that . . . said minor's father inflicted serious physical harm upon the minor by exposing said minor to water of such temperature that it resulted in serious physical harm to the minor being severe burns;" and "his parents are not providing the medical or other remedial care recognized under State law as necessary for the minor's well-being in that the minor has suffered a spiral fracture of the right humerus in the recent past and has not been provided with medical care for said injury." A September 30, 1986 TCO finds that "[i]t is a matter of immediate and urgent necessity that the minor be detained or placed in shelter care" and orders that the minor be placed in the custody of DCFS. An October 28, 1986 DO, in adjudging the minor to be abused, finds that "the parents, guardian or legal custodian of said minor are unfit or are unable, for some reason other than financial circumstances alone, to care for, protect, train or discipline said minor, or are unwilling to do so, and that it is in the best interest of said minor and the public to take said minor from the custody of said minor's parents, guardians or custodian . . . ." Three options for the disposition of the minor follow, with the option to DCFS being checked. This language tracks the beginning language of  705-7(1). The TCO on its face refers to the Petition, which alleges abuse and neglect. While the Petition does not identify any reasonable efforts action, it contains allegations of circumstances that a court could reasonably have considered to be an emergency situation. Thus, the Livingston policy would apply. Furthermore, the language of the DO tracks the language of a statute which requires a RE determination. Therefore, this case is eligible based on our discussion in Part I of this decision, as it can reasonably be inferred that the court relied on this statute and made a RE determination. . Sample No. 179 -- eligible A May 22, 1985 DO contains the following language from  705-7(1): "the parent, guardian, or legal custodian is unfit, unable for some reason other than financial circumstances alone to care for, protect, train or discipline the minor, or is unwilling to do so, it is in the best interest of the minor to take him from such custody." The DO then lists options that track paragraphs (a) through (f) of  705-7(1). The language of the DO tracks the language of a statute which requires a RE determination. Therefore, this case is eligible, based on our discussion in Part I of this decision, as it can reasonably be inferred that the court relied on the statute and made a RE determination. Sample No. 183 -- eligible A September 17, 1985 Petition alleges that "the minor child [8 years old] . . . states that she was fondled and subjected to sexual penetration by her step-father . . . and that there is substantial risk to the minor's well- being so long as she remains in the same household as the step-father." A September 17, 1985 TCO finds that "[i]t is a matter of immediate and urgent necessity for the protection of the minor that the minor be detained or placed in shelter care" and orders that the minor be placed in the custody of DCFS. The March 3, 1988 DO, in ordering that custody of the minor be continued with DCFS, specifically refers to  705-7 and provides that the minor's mother and maternal grandmother would have visitation rights and that a home study would be made of the mother's home. Illinois argued that, in addition to the DO tracking  705-7(1), the TCO tracks the "immediate and necessary" language of  703-6(2), which is sufficient to satisfy the RE requirement. Illinois further argued that reasons for removal set forth in the Petition establish an emergency situation in which any lack of efforts to maintain the minor in the home was reasonable. Although the TCO does not its face mention the Petition, it was issued the same day as the Petition. It can therefore be reasonably inferred that the TCO was based on the Petition. Additionally, the allegations contained in the Petition were such that a court could reasonably have considered this an emergency situation. Thus, the Livingston policy would apply. Furthermore, the DO specifically refers to  705-7, which requires a RE determination. Therefore, this case is eligible, based on our discussion in Part I of this decision, as it can reasonably be inferred that the court relied on this statute and made a RE determination. THE POST-LIVINGSTON CASES Sample No. 21 -- ineligible ACF found this case ineligible for the lack of both a CTW and a RE determination. A November 24, 1986 Petition alleges that the minor is abused in that the minor's mother left the minor in the care of the minor's maternal grandmother who "then abused [the minor] causing a spiral fracture of the left arm. [The mother] was aware that [the grandmother] had abused the children in the past, yet has continued to allow [the grandmother] to care for the children." The Petition further alleges that it is in the best interests of the minor that she be adjudged a ward of the court. A January 13, 1987 DO finds that the mother stipulates that she left children with the grandmother with knowledge of possible prior abuse. The minor was placed with her father pending completion of home study, with DCFS to assist the mother in seeking other housing. Illinois argued that the court, in granting the Petition, satisfied the best interests requirement, and that the DO reflects that reasonable efforts were being made to reunify the minor with her mother in that DCFS was directed to assist the mother find alternative housing away from the abusive relative. Since this is a post-Livingston case, a court order granting the Petition would not be sufficient evidence that the order was based on allegations in the Petition, and, in any event, the court's DO here indicates that the court did not grant the Petition's request. Moreover, there is no CTW or RE determination on the face of the DO, and the DO does not contain language that tracks any of the state statutes requiring the court to make a RE determination. Therefore, the case is ineligible. Illinois would have us infer that a CTW or RE determination had been made simply because the court's disposition here conceivably would be consistent with the court having made the determinations. Sample No. 33 -- ineligible The only documentation offered by Illinois was a transcript of a July 1, 1988 DH that shows that there was a prior dependency petition and a delinquency, which was being held in abeyance, while DCFS sought an appropriate placement for the minor. Illinois argued that the fact that the disposition appears to be based on a dependency determination means that the court was relying on the provisions of  802-27 (which replaced  705-7(1)), which requires a RE determination. There is nothing in the transcript which shows that the court was relying on  802-27. Any nexus with an acceptable statute must ordinarily be based on a judicial order itself, not on ancillary material such as transcripts. Unless ancillary material such as a transcript specifically refers to a RE determination or cites as applicable a statute that mandates a RE determination or quotes the language of such a statute, we would not consider such material to be evidence that the statute was followed and a RE determination made. The transcript provided by Illinois for this case fails to do any of the above. Therefore, the case is ineligible. Sample No. 37 -- eligible A June 8, 1987 TCO finds that there is probable cause the child is neglected and that "[i]t is a matter of immediate and urgent necessity for the protection of the minor that the minor be placed in shelter care." A November 9, 1988 DO contains the following language from  802-27: "the parent, guardian, or legal custodian is unfit, unable for some reason other than financial circumstances alone to care for, protect, train or discipline the minor, or is unwilling to do so, it is in the best interest of the minor to take him from such custody." The DO then lists options which track paragraphs (a) through (d) of  802-27(1), with the option of guardianship to DCFS being checked. The language of the DO tracks the language of a statute which requires a RE determination. In addition, the language of the TCO tracks  703-6(2), which also requires a RE determination. Therefore, this case is eligible, based on our discussion in Part I of this decision, as it can reasonably be inferred that the court relied on these statutes and made a RE determination. Sample No. 88 -- eligible A July 12, 1987 TCO finds that there is probable cause the child is abused and that "[i]t is a matter of immediate and urgent necessity that a temporary guardian or custodian be appointed for the protection of the minor." August 24, 1988 and December 21, 1988 DOs direct that the minor remain in the custody of DCFS and order a number of specific services be provided to the minor and her parents, including psychological testing and counseling. The language of the TCO repeats the beginning language of  703-6(2), which requires a RE determination. Therefore, this case is eligible, based on our discussion in Part I of this decision, as it can reasonably be inferred that the court relied on this statute and made a RE determination. Sample No. 126 -- ineligible A September 14, 1989 Petition alleges that the minor "is without proper care due to the mental disability of his mother" and refers to  802-4. A September 15, 1989 TCO states that "it is in the best interest of the minor and the public if said minor is held in temporary custody" and awards temporary custody to DCFS. The TCO further states that, pursuant to  802- 11, the custodian is authorized to perform all necessary medical procedures. Illinois argued that the references in the Petition and the TCO to  802-4 and  802-11, respectively, establish that the court was acting pursuant to  802-10, which requires CTW and RE determinations. There is no direct reference in these documents, however, to any statute requiring a RE determination or any language in the documents that can be said to track the language of such a statute. Illinois' argument appears to be that if the TCO mentions one part of the Juvenile Court Act, there is an implication that the court considered all the other parts of the Juvenile Court Act. Such an implication is simply not warranted. ACYF-PIQ-86-02 requires that, in order for a state law to be relied on for purposes of showing compliance with the requirements of section 472(a)(1) of the Act, the state law must be unequivocal and the court order must be expressly based on that law. That has not been shown in this case. Accordingly, this case is ineligible. Sample No. 137 -- eligible A June 5, 1987 Judgment finds that the minors are abused "for the reason that the minors' environment is injurious to their health." The Judgment further finds, in awarding guardianship to DCFS, that "the mother is not able for reasons other than financial circumstances alone to care for, protect, train or discipline the minors, and that it is in the best interests of the minors that the minors be taken from the custody of the mother." September 9, 1988 and April 12, 1990 Modified DOs repeat these findings. The language in the Judgment parallels the beginning language of  705-7(1), which requires a RE determination. Therefore, this case is eligible, based on our discussion in Part I of this decision, as it can reasonably be inferred that the court relied on this statute and made a RE determination. LICENSURE CASE Sample No. 15 -- eligible ACF found that this case was ineligible because the home in which the child was placed was not licensed during the month the title IV-E payment was reviewed. Section 472(b)(1) of the Act provides that foster care maintenance payments may be made on behalf of a child who is in a foster family home. "Foster family home" is defined in section 472(c)(1) as "a foster family home for children which is licensed by the State . . . or has been approved by the agency of such State having responsibility for licensing homes of this type, as meeting the standards established for such licensing . . . ." According to ACF, the home in this case was licensed from September 1986 to September 1988, but was not relicensed until April 1989, with the review month of November 1988 falling in the unlicensed interim. Illinois relied on Pennsylvania, DAB No. 1508. Illinois argued that the Board held there that as long as a home was originally approved before the month for which FFP was claimed, FFP should be available for that month. At 32. Illinois contended that a home that had been previously approved is not ineligible, even if that approval was no longer current during the review month. In regard to one particular placement in Pennsylvania, the Board found that ACF had determined in other cases included in the sample that the fact that a foster home was not re-reviewed within one year was not a basis for a finding of ineligibility. At 32. The Board held that, consistent with ACF's treatment of the other cases, the case should be eligible even if the re-determination was weeks late. At 33. 5/ ACF did not here deny that the practice discussed and applied in Pennsylvania was its practice nor did it explain why Illinois should not receive the same treatment under that practice as did Pennsylvania. ACF also did not allege that it had any evidence that this home was out of compliance with licensing standards during the review month. Accordingly, based upon ACF's position in Pennsylvania that a late re-approval should not bar a finding of eligibility, we find that this placement is eligible for FFP. Summary Our findings on the individual 25 cases in dispute are as follows: Eligible: Sample Nos. 14, 15, 37, 44, 50, 52, 60, 76, 85, 87, 88, 100, 103, 137, 153, 172, 179, and 183. Ineligible: Sample Nos. 6, 21, 33, 51, 66, 91, and 126. With the six cases whose ineligibility Illinois did not contest, we find that a total of 13 cases are ineligible for FFP. III. The disallowance was not contrary to congressional policy. Illinois also noted that Congress, in section 13716 of the Omnibus Budget Reconciliation Act of 1993, Public Law No. 103-66, enacted a moratorium on the collection of any title IV-E disallowance based on an OIG audit. Illinois acknowledged that this moratorium expired on October 1, 1994, but argued that Congress, in section 202(a) of the Social Security Act Amendments of 1994, Public Law No. 103-432, revisited its concerns about federal financial review methodologies which are ineffective, unfair, and unreasonably penalize states. Illinois contended that if collections under title IV-E based on these methodologies "are not outright unlawful, they are clearly against stated Congressional policy and must on that basis be deemed arbitrary and capricious." Illinois Br. at 53. Illinois essentially made these same arguments in a prior case, Illinois Dept. of Children and Family Services, DAB No. 1516 (1995). There the Board concluded that acceptance of Illinois' arguments about congressional concerns with the section 427 review process "would require the Board to ignore the actual terms of existing law." At 15. 6/ The Board further noted that Congress did not elect, when it had the opportunity to do so in the Social Security Act Amendments of 1994, to either impose a new moratorium on the repayment of funds arising from a finding of non-compliance with the section 427 requirement, or to relieve states of the obligations of existing law. At 15-16. Illinois has not provided any additional arguments that would persuade us that our reasoning in DAB No. 1516 was incorrect. We therefore find no basis for holding here that ACF's disallowance was contrary to congressional policy. IV. ACF is entitled to extrapolate the percentage of ineligible cases in the sample to the universe of IV-E payments even if the ultimate percentage of failed cases in the sample is less than 10 percent. Illinois questioned whether it was appropriate, in the event that the Board determines that Illinois had an error rate of less than 10 percent, for ACF to still extrapolate the actual ineligible payments to the universe of maintenance assistance payments in calculating the amount of the disallowance. Since we conclude, based on our examination of the individual sample cases, that Illinois' error rate was less than 10 percent, we address this argument here. The title IV-E compliance review process is set forth in the "Financial Review Guide For On-Site Reviews Of The Title IV-E Foster Care Program." ACYF-IM-85-25 (August 14, 1985), Illinois Ex. 2. This review process was discussed extensively in West Virginia at pages 6-7. Briefly, the guidelines of ACYF-IM-85-25 prescribe a two- stage review process using a random sample of foster care maintenance "payment units" made by a state during a given period. In Stage I, a sample of 50 payments is reviewed. If a state's error rate is less than 10 percent, only the individual ineligible payments identified are disallowed. If the error rate exceeds 10 percent in Stage I, however, the audit proceeds to Stage II where a minimum of 150 additional cases are reviewed. If a Stage II review is performed, ACF extrapolates the Stage II errors to the universe from which the sample was drawn and disallows FFP in the payments found to be in error in the universe. It is unclear from the record here whether the OIG auditors employed the full two-stage review process in this case. The audit report does not mention a Stage I audit, but only refers to a random sample of 200 title IV-E payments. Illinois Ex. 8, at 2. In any event, Illinois argued that extrapolation of Stage II errors was inappropriate if an error rate of less than 10 percent was found by the Stage II review. Illinois suggested that extrapolation here would result in Illinois suffering disparate treatment than other states. Illinois offered the example of a state, found to have an error rate of eight percent in a Stage I review, paying a disallowance of less than $10,000 based on the individual payments actually identified. Here we made findings above that would give Illinois an error rate of approximately 6.5 percent. Thus, Illinois argued that it would be treated unfairly in comparison to the state in its example if ACF were here to extrapolate Illinois' error rate to the universe of title IV-E payments and impose a disallowance of approximately two million dollars. We disagree. The Board examined arguments similar to Illinois' in West Virginia. The Board rejected those arguments, holding that under ACYF issuances the decision whether to proceed to a Stage II review was a matter of agency discretion. At 6. The Board relied on the language in ACYF-IM-85-25 which stated: If the State systems do not appear to be operating properly (i.e., there is insufficient documentation available to support decisions on the use of title IV-E funds) or if the stage one review indicated errors in excess of established error rates, a stage two review must be conducted. At 6. The Board then cited an earlier ACYF issuance, ACYF-IM-85-4, which stated in pertinent part that -- [t]he Commissioner of [ACYF] may also decide, for reasons other than the established error rates, that a stage two review is required in a given State to adequately validate its systems and procedures, such as a system-wide error or the recurrence of errors found in the same State in a prior year. ACYF-IM-85-4 at 3rd page. Both of these issuances indicate that ACF may proceed to a Stage II review even if the Stage I error rate does not reach the prescribed level. In concluding that the disallowance was properly based on the extrapolation results of a Stage II review, the Board stated that -- it would be contrary to ACYF's obligation to ensure that federal funds are properly expended to ignore a Stage II review which independently established that title IV-E payments were being made to ineligible children. At 8. We conclude for reasons similar to those discussed in West Virginia that ACF may extrapolate the sampling results here to the universe of title IV-E payments during the period in question. ACF's policies make it clear that ACF may undertake full scale reviews in a variety of contexts and that ACF need not in every case undertake a preliminary review to determine whether a full scale review is necessary. Nevertheless, once ACF undertakes a full scale review, it clearly may issue a disallowance based on valid statistical sampling techniques. ACF's audit procedures clearly do not require it to treat the results in the same way it would have treated results obtained during the preliminary review. Indeed, under ACF's policies, extrapolation to the universe is required following a Stage II review: Upon completion of a stage two review, disallowances will be made based on extrapolation from the sample to the universe of claims submitted for payment during the review period. ACYF-IM-85-25, Illinois Ex. 2, Attachment at 6. Obviously, any rule to the contrary of the above rule would strongly undercut ACF's ability to perform preliminary reviews in its programs in order to determine whether a problem may be serious enough to merit a full scale review. These reviews may reasonably contain cutoff standards for purposes of determining whether further reviews are necessary. Nevertheless, once ACF has determined for reasons based on these standards or for other reasons that a full scale review is necessary, ACF is entitled to use auditing techniques such as statistical sampling in computing a disallowance. Illinois has not alleged any flaws in the statistical method ACF used. Scientifically valid sampling techniques have been repeatedly upheld by this Board, and indeed by the courts, for use in audits in the title IV-E program and in other public welfare programs. See, e.g., New York State Dept. of Social Services, DAB No. 1531 (1995); Chaves County Home Health Service, Inc., v. Sullivan, 931 F.2d 914, cert. denied, 502 U.S. 1091 (1992). Moreover, if ACF were required to impose the same cutoffs it might have applied in its preliminary reviews to the Stage II results, ACF would effectively be required to apply a program tolerance for error rates. This Board has previously considered the issue of error rate tolerances in the IV-E program and concluded that no statute, regulation or policy issuance obliges ACF to apply a tolerance for errors before imposing a disallowance in that program. See, e.g., New York State Dept. of Social Services, DAB No. 1358, at 41 - 43 (1992). Accordingly, we conclude that ACF may properly extrapolate the sampling results here to the universe of title IV-E payments for the period at issue. Conclusion Based on the foregoing, we uphold ACF's findings on seven of the contested cases and reverse the findings on 18 cases. We reject the other arguments raised by Illinois concerning whether this disallowance is contrary to congressional policies and whether it is inappropriate here to extrapolate the sampling results to the universe of title IV-E payments. Accordingly, we direct ACF to recalculate the amount of the disallowance in light of our findings concerning the seven failed cases and the six additional cases conceded by Illinois. ____________________________ Judith A. Ballard ____________________________ M. Terry Johnson ____________________________ Donald F. Garrett Presiding Board Member 1. The phrases "contrary to the welfare of the child" and "best interests of the child" are used interchangeably. Both phrases pertain to the same section 472(a)(1) judicial determination. 2. We do not need to reach that issue (concerning this language or other language that Illinois may have argued required a CTW determination), however, since only one of the contested cases raises the CTW issue, and we conclude that that case would fail for other reasons. 3. Sections 702-3, 702-4, and 702-5 of the Illinois Juvenile Court Act refer, respectively, to a child in Illinois who was in need of authoritative intervention, who was neglected or abused, or who was dependent. All of the children in the contested cases who received a TC hearing fall within one of these categories. 4. This provision, or one essentially the same, appeared in Illinois statutes throughout the period at issue: 37 Ill. Rev. Stat.  705-7(1) (1985); 37 Ill. Rev. Stat.  802-27(1) (1987). 5. Although the particular case discussed in Pennsylvania involved a home that was re-approved during the review month, there was no indication in that decision that ACF would have found a case eligible only if the length of the period during which the home's approval had lapsed was limited to just a partial month's time. 6. Although the section 427 review is different from an eligibility audit, the legislative histories relied upon by Illinois in DAB No. 1516 and here demonstrate that Congress had essentially identical concerns about both processes.