GAB Decision 614
December 20, 1984
New York State Department of Social Services;
Ford, Cecilia; Settle, Norval Garrett, Donald
Docket No. 84-139
The New York State Department of Social Services appealed a
determination by the Office of Human Development Services (Agency)
disallowing $56,396,642 in federal financial participation claimed under
the Aid to Families with Dependent Children - Foster Care program. The
claim represented State and local expenditures incurred from January,
1976 through September 1980 for social services performed by social
service workers. (Of the total amount claimed, the Agency had initially
reimbursed $9,595,672 and deferred $46,800,970.) The Agency disallowed
the claims because it determined that they were for social services
subject to the funding exclusion in section 403(a)(3) of Title IV-A of
the Social Security Act.
The parties agreed that this appeal does not present any material
issues of fact which would distinguish it from an earlier Board
Decision, New York State Department of Social Services, Decision No.
449, July 23, 1983. The State specifically asked the Board to proceed
to decision in this appeal without any new briefing by either party,
based on the record in Decision No. 449. Since the issues raised in
this appeal have been comprehensively discussed in that decision and two
other Board decisions, and since New York has raised no new arguments as
to why our previous analysis should not apply to the costs in question
here, we uphold the disallowance in full. In so doing we incorporate
the analysis and findings set out in our previous decisions. *
(2) Specifically we conclude:
* Section 403(a)(3) of the Social Security Act precludes
reimbursement under Title IV-A for the costs of the social services in
question. This conclusion follows directly from the language and the
design of section 403(a)(3). See in particular pp. 6-15, Decision No.
449; pp. 5-18, Decision No. 337; and p. 4, Decision No. 552. The
State here failed to present to the Board any evidence demonstrating
that the services in question are distinguishable from services covered
by this statutory exclusion. Since the State failed to meet its burden,
we therefore conclude that the services are covered.
* Even though the Agency action transmittal concerning the statutory
bar was not issued until June 24, 1981, the Agency must apply the action
transmittal for the entire period in question since the statute was in
effect for the entire period and the statute precluded reimbursement.
See pp. 15-22, Decision No. 449 and p. 5, Decision No. 552.
* The Agency cannot be estopped from implementing what the statute
requires. Even if it could be estopped, the State has not shown that
all of the traditional elements of estoppel were present in the Agency's
implementation of section 403(a)(3), and, in any event, the Agency's
actions cannot be deemed to be "affirmative misconduct." See pp. 23-27,
Decision No. 449 and pp. 5-9, Decision No. 552.
Conclusion
Accordingly, we sustain in full the disallowance of $56,396,642. In
Decision No. 449, the Board noted that the Agency had stated that it
would reduce the disallowance subsequent to the Board's decision by the
amount which the State could document, using reasonable methodology, as
costs (3) related to income maintenance eligibility activities. In its
submission of November 1, 1984 in this appeal, the Agency indicated that
this disallowance, as well, might be reduced subsequent to decision if
"a reallocation between allowable and unallowable costs is achieved."
*
Decision No. 449 involved the same parties as the current appeal and
covered expenditures incurred between October 1976 and March 31, 1979.
Decision No. 552, New York State Department of Social Services, July 16,
1984, involved the State and the Social Security Administration, the
predecessor agency in administering the program. The costs were
incurred prior to April 1, 1976. Decision No. 337, Joint Consideration:
Reimbursement of Foster Care Services, June 30, 1982, concerned the
claims for three other states, Oregon, Michigan and Virginia. The
Board's decision was appealed by Oregon and affirmed by the United
States District Court for the District of Oregon on January 31, 1984.
Civil No. 83-1466.
MARCH 19, 1985