GAB Decision 532
Docket No. 83-131
April 26, 1984
Illinois Department of Public Aid;
Ford, Cecilia Sparks; Settle, Norval Garrett, Donald
This is the third disallowance of claims submitted by the Illinois
Department of Public Aid for federal funding of payments for foster
children placed in relative boarding homes. This Board reversed the
other two disallowances, finding the evidence insufficient to support
the conclusion that, in policy or practice, the State was approving
relative boarding homes using different standards than for licensing
other foster family homes, rather than the same standards as required.
Here, the Social Security Administration (SSA) again challenged the
Board's analysis of the issues, raising problems it saw in how the State
approved relative boarding homes compared to how it licensed other
homes. As we explain below, SSA's challenge is based in part on a
misreading of the Board's previous decisions. Basically, however, the
difficulty with SSA's position is that it is premised on a view of what
the applicable requirements should be, rather than what they were. The
statute and regulations, as well as SSA policy, gave the State
considerable discretion in establishing standards for foster family
homes, and in the form and manner in which approval could be expressed.
The evidence does not show that the State exercised that discretion in a
manner which violated federal requirements. We appreciate SSA's concern
for the quality of care foster children in Illinois are receiving. But
absent more specific federal requirements, or findings concerning
specific approvals (which SSA may still examine in light of our
conclusions), there is no basis on which the Board can uphold this
disallowance. Our reasons are stated more fully below.
Background.
SSA here disallowed $1,071,464 in federal financial participation
claimed by the State under Title IV-A of the Social Security Act. The
claims were submitted under section 408 of the Act, which authorized
federal funding for Aid to Families with Dependent Children - Foster
Care (AFDC-FC) payments made on behalf of children removed from their
homes (2) and placed in foster care. One of the conditions for federal
funding for children placed in foster family homes in the State was that
the homes had to be licensed by the State, or approved by the State as
meeting the standards established by the State for licensing such homes.
Section 408 of the Act (definition of "foster family home").
The payments in question here were made during the period October 1,
1978 through September 30, 1979 on behalf of foster children placed in
the homes of relatives. These "relative boarding homes" were approved
by the State, and the State said that its policy was to approve only
homes meeting the standards in the State's regulation governing the
licensing of foster family homes. SSA's position was that, in practice,
the State was applying lesser standards to relative boarding homes than
to licensed homes.
As we mentioned above, this is the third disallowance of relative
boarding home payments appealed by the State to this Board. The Board
reversed the first disallowance, taken by the Office of Human
Development Services (OHDS), in Illinois Department of Public Aid,
Decision No. 378, January 31, 1983. /1/ The Board similarly reversed a
disallowance taken by SSA in Illinois Department of Public Aid, Decision
No. 478, November 18, 1983. Finally, in response to OHDS' Motion for
Reconsideration of Decision No. 378, the Board issued a Ruling on
November 30, 1983, affirming that decision. In the case before us now
(Docket No. 83-181), the Board delayed briefing, at SSA's request,
pending issuance of Decision No. 478 and, after that decision was
issued, granted SSA's request for additional time to consider whether it
wished to withdraw the disallowance here. SSA chose, instead, to submit
a brief, maintaining that SSA's disallowance decision was correct.
Basically, this brief did the following:
* Incorporated by reference the SSA brief submitted in the case
leading to Decision No. 478.
* Stated how SSA read Decision No. 478 and why SSA disagreed with
that decision.
* Explained SSA's concern in protecting the interest of the
particular children involved.
(3) SSA did not present any new evidence to show that the Board's
findings in Decision No. 478 were incorrect, /2/ nor did SSA try to
distinguish this case from the previous cases.
The State objected to the SSA brief, stating that the appropriate
procedure for SSA to challenge Decision No. 478 would be to request
reconsideration of that decision and that this case should be viewed
independently of Decision No. 478. /3/ The State also presented
arguments about why the reasoning in Decision No. 478 was correct, and
applies here as well.
Discussion.
What we held in Decision 478.
SSA's arguments are substantially those which we addressed in
Decision No. 478, and we do not think it necessary to repeat the lengthy
analysis of those arguments set out in that decision. In summary, we
concluded in Decision No. 478 that --
* The Social Security Act and implementing regulations gave the State
discretion to determine what the standards for foster family homes would
be and to use a less formal process for approval of relative boarding
homes than for (4) licensing other homes, so long as the same standards
were applied.
* The State's approval process was not deficient in a way which would
justify a conclusion that the standards applied were not the same as
those applied in the licensing process.
* The State's interpretation of what provisions in its own regulation
were standards is reasonable and should be accorded deference.
* SSA's evaluation of the evidence concerning the State's practice in
applying the standards was tainted by SSA's erroneous view of what the
standards were, what procedural differences were permissable, and how
the State should document approval; the record did not provide a
sufficient basis for disallowing the State's entire claim for relative
boarding home payments.
What we said about standards.
In its brief submitted here, SSA stated how it read the Board's
decision. SSA said that the Board held that the State could show that
some of the standards in the State's licensing regulation "apply only to
licensure situations and need not be met in approvals." SSA brief, p. 2.
To the contrary, the Board held that the same standards had to be
applied for both licensing and approval. The Board simply did not adopt
SSA's view of what parts of the State's regulation constituted standards
and what parts were merely procedural.
SSA also mistakenly said that the Board accepted "that if such
general phrases as "being healthy" or a "safe and healthy environment"
(p. 5) are checked off by the caseworken as met, then the licensing
standards are met." SSA brief, p. 6 (footnote omitted). /4/ The Board
found, rather, that (5) the general phrases used on the State's approval
form were not intended to substitute for the more detailed standards in
the licensing regulation but were intended only as a shorthand for those
standards, so that, when checked, they would verify that the standards
had been applied. The Board found that the record did not support SSA's
position that the fact that all the details from the licensing
regulation did not appear on the approval checklist necessarily meant
that the standards were not applied in practice.
SSA also continued to press its argument that all of the requirements
in the licensing regulation should have been used in the approval
process. In particular, SSA said that a greater assurance of the health
of the foster family would result from the licensing process, where a
medical examination was always required, than from the approval process,
where an examination was required only if a caseworker noted a potential
problem. /5/
(6) SSA apparently now thinks that licensing devices of this type are
so important that they should always be required for approval as well.
SSA could have established a rule to that effect, but did not do so. We
agree with SSA that the judgment of a medical expert would be better
than a caseworker's judgment as to whether a health problem actually
exists and that information from a medical report would generally be
supperior to that from a caseworker's observation. But this does not
mean that the only reasonable way of viewing the medical report
requirement is to consider it a standard, rather than a procedure.
The question before us was whether the same standards were applied in
approval as in licensing. The provision in the State's regulation
concerning the health of the foster family is very vague and does not
require use of the information from the medical report in any specific
way, but clearly leaves the matter to the State licensing official's
judgment. Thus, the Board declined to find that the approval process
necessarily resulted in application of lesser standards for health of
the foster family than the licensing process, merely because approval
depended on the caseworker's judgment. The Board did not say how it
would interpret the provision itself, but deferred to the State's
interpretation of the provision as a reasonable one. The Board did so
in this context: the statute and regulations gave the State discretion
to establish licensing standards; the statute permitted the State to
use different procedures for licensing and approval; and the State's
interpretation that the medical report requirement was procedural, and
too burdensome to impose on all relative boarding homes, was consistent
with Congressional preference for placing foster children with
relatives. The Board also considered it important that SSA's own policy
was that it would not substitute its judgment for that of the states in
determining what licensing standards would apply to foster family homes,
nor in determining the form or manner in which approval would be
expressed. Decision No. 478, p. 7. If SSA had wanted to circumscribe
the states' discretion concerning what procedures to use for approval,
it could have done so. It did not. Indeed, to our knowledge the State
had no notice prior to the disallowance decisions that SSA might look
behind its approval or evaluate its process.
We realize why SSA might think it desirable that the State follow all
of the licensing procedures for approval; but SSA cannot disallow all
of the State's relative boarding home claims after-the-fact based on an
erroneous view of what the State was required to do. Existing
requirements simply do not provide that the State must follow all
licensing procedures for approval.
(7) Whether the Board improperly placed a burden of proof on SSA.
SSA also read the Board's decision as holding that, given the State's
assertions that its caseworkers applied the licensing standards in the
approval process, "the burden of proof rests with the federal grantor
agency to develop and submit a record of evidence establishing that the
assertions are untrue by showing that specific relative homes had been
approved which would not have been licensed." SSA brief, p. 2. This is
also a misstatement of the Board's decision. The Board found that the
State's evidence concerning its policy and general practice was more
persuasive than the evidence relied on by SSA; in other words, the
State did meet its burden of disproving the allegations on which SSA
based the disallowances. The Board recognized that there might still be
a question of the allowability of the State's claim for payments to
relative boarding homes if the evidence showed that in practice some of
the State's caseworkers were not always applying the standards or were
generally failing to document that they had done so. Decision No. 478,
p. 15. The Board found that, at most, the evidence relied on by SSA
showed that one caseworker may not have been adequately trained in the
licensing standards and that the approval form was missing from some
case files without explanation. The Board explained why it thought that
the evidence was insufficient as a basis for disallowing the State's
entire claim for relative boarding home payments; the Board further
noted that the record did not show whether any of the amounts disallowed
related to homes approved by the one caseworker or to files where the
approval form was missing. Decision No. 478, pp. 16-19.
The burden of proof question was raised by SSA regarding the earlier
relative boarding home case, Decision No. 378. The Board explained that
its decision there was consistent with previous Board decisions which
had held that the Board will not uphold a disallowance where it is not
supported by the record. Reconsideration ruling, p. 3; Decision No.
478, p. 15, note 12. Board decisions also hold that a grantee generally
has the burden of documenting the allowability of its costs. Given the
Board's finding that the approval checklist form used by the State was
intended as verification that the licensing standards had been met, and
that this was sufficient documentation of approval under applicable
policies, the Board's holding in Decision No. 478 is consistent with the
general rule.
With respect to several subsidiary points in Decision No. 478, the
Board noted that the State had made allegations which SSA did not deny.
SSA objected to this, stating "the parties cannot be expected to reply
to every particular item mentioned by their adversary despite their
judgment that it is less than significant in deciding the issues before
the (8) Board." SSA brief, pp. 2-3, note 1. SSA said that it did not
think certain State assertions merited discussion because they were not
determinative, but "the Board cited omission to respond to these points
as if a determinative point had been conceded." Id. SSA cited to page 10
and page 16, note 3, of Decision 478 in support of this.
Contrary to what SSA said, however, the Board did not find these
undisputed points to be determinative. The first point (on page 10) was
mentioned as additional support for the finding that the approval
caseworkers could apply the licensing standards as well as the licensing
workers. This finding was based primarily on other evidence submitted
by the State in response to allegations by SSA which we found to be mere
speculation. The second point (on page 16, note 3) was mentioned solely
with respect to an issue which the Board specifically said it was not
reaching. Even if we had considered these points to be determinative
and should have specifically called them to SSA's attention, this would
not show that Decision No. 478 was incorrect: SSA has seen our analysis
and has still failed to deny the allegations or present any
contradictory evidence.
We appreciate SSA's concerns about the quality of care foster
children in Illinois are receiving. SSA may also have some reason to
question the efficacy of the State's procedures in approving relative
boarding homes. The difficulty here is that there is no basis for
finding that the State's process violated federal requirements, and the
Board cannot sustain the disallowance of the State's entire claim based
on unsupported allegations about what the State is doing. SSA had given
the State discretion in how it established standards for foster homes,
and in the form and manner in which approval was expressed, and cannot
disallow the State's valid FFP claims simply because the State exercised
that discretion differently from how SSA would.
Conclusion
For the reasons stated above, we reverse this disallowance. /1/ OHDS
took over administration of the AFDC-FC program when it was
transferred to a new Title IV-E of the Act, Pub. L. 96-272, June 17,
1980. SSA and OHDS divided responsibility for disallowance of claims
made under the previous section 408 program. /2/ SSA did submit
a February 1984 newspaper clipping about alleged abuse of a foster child
placed in a relative's home in Illinois. SSA said it submitted this
article, not as proof of what it contained, but "for only one purpose:
to forcefully remind us all that real human tragedy can so easily result
from a tax program of foster care placements." SSA brief, p. 7, note 4.
The State objected that SSA was trying to sensationalize an
unforeseeable tragedy and to distort the State's approval process.
Statements in the article can as easily be read to support the State's
position here as SSA's, and do not necessarily imply that the State's
program is "lax." Moreover, even if the article did show that one
of the
State's placements should not have been made, it would not show that the
fault lay with differences between the State's licensing and approval
processes. /3/ The State moved that the SSA brief be striken
from the record in this case "because it does not address the case
currently before the Board." State's reply brief, p. 1. We deny this
motion. While, as we have noted above, the brief does not address the
specific facts of this case, it is responsive to the extent that the
issues here are the same as those addressed in Decision No. 478.
/4/ In the footnote on page 6 of its brief, SSA said that the Board had
found that licensing officials use only the general headings in the
licensing regulaton "and none of the detailed content of the licensure
regulations" and that the Board's finding was not supported by the
record in the case. Again, SSA has misstated the Board's conclusion.
The Board said that the fact that licensing officials prepared an
outline prior to doing a home study, while the caseworkers reviewing
relative boarding homes used only the checklist, did not show a
significant difference in the procedures for licensing and approval
since the outline was based on general headings rather than detailed
standards. The point was that use of the home study device for
licensure did not necessarily mean that use of the approval checklist
was deficient: SSA's represenations about the superior nature of the
home study device were not supported by the record. We note here that
an on-site investigation of the home is required by the State for
approval as well as licensing -- the difference is in the type of
documentation required. SSA faulted the Board for not requiring more
documentation than the approval checklist that the licensing standards
were met for relative boarding homes (SSA brief, p. 3). Yet, the Board
accepted the approval checklist in part because SSA had never
established any particular documentation requirement for approvals and,
indeed, had said that its policy was to give the State discretion
concerning the form and manner in which approval was expressed.
/5/ SSA also referred to a requirement that licensing workers perform
home studies and a requirement for a physical examination of the foster
child, saying that the Board treated these as mere technical information
devices. We discuss in note 4 above how SSA misunderstood our findings
on home studies. With respect to physical examination of the foster
child, the Board did not state, nor imply, that the State could ignore
this requirement for children placed in relatives' homes. Rather, the
Board said that this was not a standard for the home to meet, but a duty
placed on the caseworker by the regulation, and, thus, the fact that it
was not mentioned on the approval checklist was not significant.
NOVEMBER 14, 1984