Tennessee Department of Human Services, QC No. 11 (1992)

Department of Health and Human Services

Departmental Appeals Board

AFDC QUALITY CONTROL REVIEW PANEL

SUBJECT:  Tennessee Department of  
Human Services
Docket Nos. 91-148
91-149
92-26

DATE:

DECISION

The Tennessee Department of Human Services (State)
appealed the August 15, 1991 and October 16, 1991 Aid to
Families with Dependent Children (AFDC) quality control
review determinations by the Acting Regional
Administrator of the Administration for Children and
Families (ACF or Agency).   1/  The Agency determined
that the assistance units (AUs) in these three cases were
not eligible for the grants they received during the
review month.  These determinations were based on federal
quality control (QC) review findings that children in
these AUs were not properly enumerated.  For the reasons
stated below, we agree with the Agency that these
children were not properly enumerated.  Therefore, we
uphold the Agency's decisions.

Relevant Statutory and Regulatory Provisions

Section 402(a)(25) of the Social Security Act (Act)
requires that a State's title IV-A plan "provide that
information is requested and exchanged for purposes of
income and eligibility verification in accordance with a
State system which meets the requirements of section 1137
of this Act."  Section 1137 in turn provides that, as a
condition of eligibility for title IV-A payments, a State
shall require that "each applicant for or recipient of
benefits . . . furnish to the State his social security
account number . . . ."  Section 1137(a)(1).  This
information is to be utilized primarily to obtain wage
information from various state and federal agencies to
verify the applicant's eligibility and the amount of
benefits to which the applicant is entitled.  See section
1137(b).  Section 408(c)(4) of the Act (42 U.S.C.
608(c)(4)), which applies to erroneous payments made
after fiscal year 1990, states that "[n]otwithstanding
any other provision of this section, a payment shall be
considered an erroneous payment if the payment is made to
a family . . . (B) any member of which is a recipient of
aid under a State plan approved under this part and does
not have a social security account number (unless an
application for a social security account number for the
family member has been filed within 30 days after the
date of application for such aid)."

Regulations implementing the requirement for a social
security number (referred to as the "enumeration
requirement") appear at 45 C.F.R. 205.52, which states
in pertinent part that a state title IV-A plan must
provide that --

   (a) As a condition of eligibility, each applicant
for or recipient of aid will be required:

   (1) To furnish to the State or local agency a    
  social security account number, hereinafter
referred to as the SSN  . . . ; and

   (2) If he cannot furnish a SSN (either because
such SSN has not been issued or is not known), to
apply for such number through procedures adopted by
the State or local agency with the Social Security
Administration.  If such procedures are not in
effect, the applicant or recipient shall apply
directly for such number, submit verification of
such application, and provide the number upon its
receipt.

The Department of Health and Human Services (Department)
has issued a Quality Control Manual (QCM) which details
the procedures for quality control review. The portion of
the QCM dealing with enumeration (Element 170) is found
at Appendix W of the QCM.   2/  The type of verification
required for enumeration purposes is set forth in the
QCM, and depends on the method the State adopts to help
applicants secure a SSN.  The QCM provides that States
may assist applicants in meeting the enumeration
requirement in the following ways:  1) the State may have
an agreement with the Social Security Administration
(SSA) through which the local agency accepts applications
for SSNs (termed "agreement States"); 2) the local agency
may refer AFDC applicants or recipients (applicants) to
the SSA District Office (DO) to make direct application
to SSA (termed "non-agreement States"); or 3) a State may
provide applicants with the Enumeration at Birth (EAB)
option.

In an agreement State, verification of enumeration for QC
purposes occurs when, as of the review date, the local
agency has either: 1) A SSN for each individual in the
AU; 2) a signed copy of the acceptable SSN application
(Form SSA-5), signed by the individual or their parent or
legal guardian; or 3) verification that the individual's
name appears on a central register or listing, if one is
maintained by a State agency.  However, if an applicant
in an agreement state decides to apply directly to the
SSA DO, non-agreement state verification rules apply.  42
C.F.R. 205.52(a)(2); State Reply Brief (Br.) at 2.

In a non-agreement State, verification occurs when the
applicant: 1) applied directly to the SSA DO for a SSN
and furnished to the local agency an application signed
by an employee of the SSA DO; or 2) furnished the SSN
when received, if it was received as of the review
date.   3/

Under the EAB option for verification of enumeration, the
hospital secures information for birth registration and
sends it to a State's vital statistics office, which in
turn transmits the information to SSA via magnetic tape
for automatic issuance of a SSN.  As of the review date,
the enumeration option must be verified in the local
agency case file,   4/ and the number must be reported to
the local agency if received.
 
Factual Background 

These cases involve three different factual situations,
but each raises similar questions as to the proper
enumeration of a child.  The facts of each case, which
the parties have stated are not in dispute (ACF Response
Br. at 1; State Reply Br. at 1), are set forth below.

91-148:  The payment in question was included in the
State's QC review of payments for the review date of
December 1, 1990, and was found correct.  Upon re-review,
the Agency determined that this case was totally
ineligible for its $150 grant because the only child in
the AU was not properly enumerated as of the review date.

A.B.   5/ applied for assistance benefits on July 11,
1990 for herself and her child N.B.  State Br., Appendix
J.  A.B.'s application indicated that while A.B. had a
SSN, N.B. did not.  Although Tennessee is an agreement
State, A.B. applied for N.B.'s SSN directly to the SSA
DO, submitting the application for N.B.'s SSN directly
with SSA on September 10, 1990.  A.B. did not present a
signed copy of Form SSA-5028 (SSA receipt for application
for a SSN) to the eligibility worker (EW) for inclusion
within the local agency case file.  State Br. at 4. 
Further, although the EW stated in a note in the case
record dated September 14, 1990 that she "received
requested verification - - SS and birth certificate" for
N.B.,   6/ no copy of an SSA-5, a SSN card, or a SSN, was
in the local agency case file as of the review date. 
State Br., Appendix J.  On January 10, 1991, during State
QC review, the State QC reviewer stated that she saw
N.B.'s SSN card as well as the SSA receipt verifying the
September 10, 1990 application.  State QC review thus
determined that enumeration requirements were met as of
the review date (State Br. at 4 - 5, Appendix K, L).

Federal review found, however, that although Tennessee is
an agreement State, if an individual makes application
directly to SSA instead of through the local agency,
verification requirements for non-agreement States apply,
i.e., proof of application and furnishing the SSN when
received.  Federal review found that neither of these
requirements were met in this case.  ACF Final Decision
(August 15, 1991).

91-149:  The payment in question was included in the
State's QC review of payments for the review date of
January 1, 1991, and was found correct.  The federal QC
specialist, however, found the case overpaid $43 because
the youngest child in the AU was not properly enumerated
as of the review date.

T.W. applied for AFDC benefits on September 13, 1990. 
State Br. at 1, Appendix A.  On that same date, T.W.
applied directly to the SSA DO for a SSN for her son J.W.
 A completed form SSA-5028 was then placed in T.W.'s
local agency case file.  On November 9, 1990, T.W.
received J.W.'s SSN card.  State Br. at 2, Appendix D.

The State QC reviewer found a copy of the SSA-5028 in the
local agency case file for J.W.  Further, the State QC
reviewer found that T.W. did send her copy of J.W.'s SSN
card to the EW, pursuant to a request made by the EW on
January 25, 1991.  State Br. 2 - 3,  Appendix E, F.  The
EW provided the State QC reviewer with J.W.'s SSN.  From
this, State QC review determined that all AU members met
the enumeration requirements as of the review date, and
that the AFDC grant was correctly paid.

Federal review found, however, as it did in 91-148, that
although Tennessee is an agreement State, if an
individual makes application directly to SSA instead of
through the local agency, verification requirements for
non-agreement States apply.  In this case, while a timely
application for J.W.'s SSN had been made, the SSN was not
furnished to the local agency until some time after the
January 1, 1991 review date.  ACF Final Decision (August
15, 1991).

92-26:  The payment in question was included in the
State's QC review of payments for the review date of
February 1, 1991.  The State QC reviewer found the case
underpaid $20.  The federal QC specialist agreed with
that error, but also found an enumeration error,
specifically finding that the AU's youngest child was not
properly enumerated as of the February 1, 1991 review
date.  These two errors rendered the case overpaid $25.

C.C. gave birth to S.C. on November 25, 1990.  C.C.
reported this birth and S.C. was added to C.C.'s grant as
reflected in the February 1, 1991 review month budget
calculation.  No application for a SSN was made through
the local agency.  Instead, C.C. applied for S.C.'s SSN
through the EAB procedure.  Neither Form SSA-2853, or any
other primary sources of evidence to support that EAB
procedures were properly followed was in the local agency
case file as of the State review date.  However, during
State QC review, the State QC reviewer did see a copy of
the SSA-2853 certifying the November 26, 1990
application.  S.C.'s actual SSN card was not issued until
March 27, 1991.  State Reply Br., Attachments.

Federal review found, however, that although application
for a SSN via EAB procedures was made for S.C., the local
agency case file did not contain proper documentation of
enumeration.  ACF Final Decision (October 16, 1991).

Thus, in Docket No. 91-148, as of the review date, the
applicant had not furnished proof that she had applied
for a SSN for the child in question and had not reported
the child's SSN to the EW.  In Docket No. 91-149, as of
the review date, the applicant had furnished proof of
application for a SSN to the EW but had not reported the
SSN received almost two months earlier.  In Docket No.
92-26, as of the review date, the applicant had not
furnished proof that she had applied for a SSN (which she
did not receive until after the review month) through the
EAB procedure.  In each of these cases, however, State QC
review verified that the applicants had applied for or
received SSNs as of the review date.

State's Arguments

The State takes the position that it complied with the
applicable statutory and regulatory provisions in each
case because all AU members had applied for or received
SSNs.  The State argues that ACF's determination that the
AU's were not eligible for grants during the review month
was based solely on the QCM and that the QCM was not
binding on it.

The State argues specifically that the provisions of the
QCM are legislative rules which should have been
published in accordance with the notice and comment
rulemaking requirements under the APA, 5 U.S.C. 553. 
The State also argues that the QCM requirements on which
ACF relies are inconsistent with the QCM's requirement
that the federal QC reviewer base decisions on actual
case conditions and engage in field investigations as the
second step in their review.  The State asserts that
ACF's decision is predicated upon a mere paper review of
the local agency case file, and that Congress did not
intend the Secretary to ignore the existence of other
evidence bearing upon the facts or demonstrating actual
case conditions.  The State argues further that the QCM
contravenes 45 C.F.R. 205.52(c) because the QCM
requires ACF to deny AFDC assistance until such time as
an applicant furnishes the actual SSN where an applicant
has been at most negligent in failing to provide it.  The
State also argues generally that it should not be
punished for the omissions of third parties.  State Reply
Br. at 2 - 5.

Discussion

We conclude that the State's arguments have no merit. 
The regulations at 45 C.F.R. 205.52(a) expressly
require as a condition of AFDC eligibility that an
applicant "furnish" a SSN to the local agency or "submit
verification" that application for a SSN has been made
(where a SSN has not yet been issued or is not known). 
Thus, it is not sufficient that an applicant actually had
a SSN or applied for one:  an applicant who had a SSN had
to furnish it and an applicant who applied for a SSN had
to submit verification of that fact.

The State nevertheless contends that the payments were
issued in compliance with the regulations since in each
case the State QC reviewer obtained either the SSN itself
or proof of application for a SSN.  We disagree. 
Although section 205.52(a) does not specifically state
when the SSN must be "furnished" or verification of a SSN
application must be "submitted," the only reasonable
interpretation of this provision is that these actions
must be taken as of the review date.  As indicated
previously, a SSN is used as a means of verifying the
AU's income in order to determine its eligibility for an
AFDC grant and the proper benefit level.  If the local
agency does not have the SSNs of the individuals in the
AU at the time it makes a payment, the requirement that
the applicant furnish these SSNs (where received) serves
no purpose.  Thus, in order to effectuate the underlying
purpose of the enumeration requirement, the applicant
must have reported by the review date any SSN which has
been received.  Moreover, while the local agency cannot
verify the AU's income based on proof that the applicant
has applied for a SSN, requiring such proof as of the
review date assures that a SSN will be available for
purposes of verifying the AU's income in the future. 
Thus, although section 205.52(a) does not expressly
provide that a SSN must be reported or proof of
application furnished as of the review date, this
requirement is implicit in the regulations.

In view of the foregoing, we reject the State's argument
that ACF's findings of error should be reversed because
the QCM provisions relating to verification of
enumeration were not published pursuant to notice and
comment rulemaking.  The QCM explicitly requires that the
applicant furnish a SSN or proof of application for a SSN
as of the review date.  However, because the regulations
themselves support ACF's findings, there is no basis for
reversal even if the QCM was not binding on the State.  
7/
We also reject the State's argument that the QCM
provisions on enumeration should not be applied because
they are inconsistent with other QCM provisions requiring
that the QC reviewer base decisions on actual case
conditions and field investigations.  As indicated above,
actual case conditions -- that a SSN has been received or
application for a SSN has been made -- do not satisfy the
requirement in the QCM that a SSN must be reported or
proof of application furnished as of the review date.
However, as discussed above, this requirement is not only
stated in the QCM but is also implicit in the
regulations.  Thus, while it may be appropriate to look
at actual case conditions to determine whether other
eligibility requirements, such as those pertaining to
living arrangement and household composition, are met,
compliance with the enumeration verification requirement
cannot be established in this manner.   8/

The State has also argued that under 45 C.F.R.
205.52(c), it is precluded from denying AFDC assistance
where an applicant has been, at most, negligent in
furnishing his SSN.  We do not agree.  Section 205.52(c)
only states that such assistance will not be delayed or
denied if the requirements of 45 C.F.R. 205.52(a) have
been met.  There is nothing in the language of section
205.52(c) which indicates that a failure to comply with
section 205.52(a) which is caused by the applicant's
negligence is excused.  Accordingly, since we have
concluded above that the requirements of section
205.52(a) have not been met in these three cases, section
205.52(c) does not apply.

Finally, the State has argued that it should not be
punished for the omissions of third parties. 
Specifically, the State contends that QC errors should
not be called against the State when it is unable to
force AFDC applicants to timely apply for and furnish
SSNs in compliance with enumeration verification
requirements.  We do not agree.  The States are in the
best position to enforce these requirements, and 
Tennessee, as an agreement State, is generally in a
better position than non-agreement States.  Further, if
an applicant has not complied with the requirements of 42
C.F.R. 205.52(a), the State would appear to be within
its rights to deny benefits to that applicant.

   Conclusion

For the reasons discussed above, we conclude that the
payments made in these cases were erroneous. 
Accordingly, we affirm the Agency's determinations.

 

                                     
     Carolyn Reines-Graubard


                                     
     Leslie Sussan


                                     
     Maxine Winerman


* * * Footnotes * * *

       1.    At the State's request, and in the absence
of Agency objection, the Panel consolidated these cases
as they involved common issues of fact and law.
       2.    Appendix W was issued by ACF to implement
the 1989 amendments to the AFDC statute.  However, the
portion of Appendix W dealing with enumeration is
substantially the same as that appearing in the QCM
provisions which were replaced by Appendix W.

       3.    This is the case unless the State agreed to
provide local SSA DOs with welfare identification numbers
for referred individuals, or the State has a Data
Exchange Agreement with SSA, which conditions do not
exist in these cases.

       4.    As of the review date, election of the EAB
option can be verified by:  1) a completed Form SSA-2853,
or an acceptable State or hospital modified Form SSA-
2853; 2) a certified birth certificate or copy of the
original birth certificate showing the parents' election
of EAB; or 3) a written confirmation of EAB by the SSA
DO.
       5.    We identify the recipients by their initials
in order to protect their privacy. 
       6.    It is not clear what type of verification
relating to the child's SSN this refers to.  In any
event, the State did not allege that the EW's statement
was evidence that A.B. provided either a SSN or proof of
application for a SSN prior to the review date.
       7.      Thus, we need not reach the question
whether the QCM was binding on the State.  We note in any
event that, although 45 C.F.R. 205.40(b) states that
"[t]he State agency shall operate the quality control
system in accordance with policies and procedures
prescribed in Quality Control Manuals issued by the
Department," it is unclear whether this refers to the
entire QCM or only to specific portions of the QCM not
related to those in question here.  See 42 Fed. Reg.
37205, 37207 (July 20, 1977); 41 Fed. Reg. 55727
(December 22, 1976).
       8.    Contrary to the State's suggestion that
Congress did not intend the Secretary to ignore the
existence of other evidence bearing upon the facts or
demonstrating actual case conditions, it appears that
Congress did intend a paper review of the enumeration
requirement.  The Conference Report prepared when
Congress amended the AFDC statute in 1989 states, "The
following errors would be counted: lack of a social
security number in the file (unless an application for a
number has been filed). . ."  H.R. Conf. Rep. No. 101-
386, 101st Cong., 1st Sess. 931 (1989).
 

(..continued)