New York State Department of Social Services, DAB No. 664 (1985)

GAB Decision 664

July 1, 1985

New York State Department of Social Services;
Settle, Norval D. (John) Teitz, Alexander G. Ford, Cecilia Sparks
Docket No. 85-2


The New York Department of Social Services (State) appealed a
determination by the Regional Commissioner, Social Security
Administration (Agency), disallowing federal financial participation
(FFP) in the amount of $39,561,397 claimed by the State under title IV-A
of the Social Security Act as Aid to Families with Dependent Children
(AFDC) and related administrative costs. The costs were claimed as an
increasing adjustment on the State's revised Quarterly Statement of
Expenditures for the quarter ended December 31, 1980 (10-12/80 QER), and
represented expenditures made from July 1973 through June 1980. The
disallowance was taken on the ground that the costs duplicated a portion
of the costs claimed on the State's revised Quarterly Statement of
Expenditures for the quarter ended September 30, 1980 (7-9/80 QER). The
State contended in its notice of appeal that only some of the amounts
claimed on the 10-12/80 QER duplicated the earlier claim. It
subsequently identified $4,471,760 claimed for related administrative
costs as a duplicate claim. (State's brief dated July 15, 1983, p. 2)
/1/

(2) For the reasons discussed below, we conclude that the $39,561,397
was properly disallowed as a duplicate claim. Our decision is based on a
record which includes submissions made in other appeals by the State.
These submissions were identified in a list sent to the parties on May
6, 1985 and amended on May 31, 1985. Factual Background The State
submitted the 7-9/80 QER on December 24, 1980. That QER included five
individual claims totalling approximately $83 million. On May 14, 1981,
the State submitted the 10-12/80 QER. (As indicated previously, both
QERs were revisions of QERs originally submitted for each quarter.) This
QER showed an increasing adjustment of $72,663,798. The letter
forwarding the 10-12/80 QER stated in part as follows: These revisions
include some amounts included in the amended Quarterly Reports of
Expenditures previously submitted to you on December 24, 1980. These
revised July-September reports were submitted in order to comply with
the time limits on claiming contained in HR 3434 which carried with it a
submission deadline of January 1, 1981. The original revisions were the
result of claims developed on a sampling basis. They arose from
Departmental audit efforts currently underway at that time which could
not be completed in time to meet the claiming deadline and provide you
with accompanying sufficient documentation necessary to achieve approval
for reimbursement. After that submission the deadline for claiming was
extended to May . . .(15), 1981. . . . . The quarterly expenditure
revision now being made contains claims in the amount of $71,906,844,
which were included in the original revisions dated in December.(3) In
order to ensure that duplicate claiming will not result, we are
specifically advising you of our actions. We readily recognize that you
may disallow the original submission . . . based on this revised
submission. This course of action by DHHS seemingly would provide us
with the additional time contemplated by the extended filing date, which
would allow us to secure the documentation you require to approve the
expenditures for reimbursement. Unfortunately . . . we have been unable
to obtain a prior federal assurance of the additional time accuring
under the extended filing date. Nevertheless, we reiterate that we are
prepared to withdraw either claim upon receipt of your assurance that
the claim remaining in place will be reviewed in conjunction with the
full documentation we have produced. (Agency's Exhibit K) Shortly
thereafter, upon request by the Agency for additional documentation in
support of the 10-12/80 QER, the State submitted a worksheet captioned
"ADC Projections to be included in the revised 10-12-80 QER." (Agency's
Exhibit L) For each of several line items totalling $143,813,687 (or
$71,906,844 FFP), there was an amount and a description of the source or
type of expenditures. /2/

Basis for Disallowance and Parties' Arguments In determining that
$39,561,397 claimed on the 10-12/80 QER duplicated a portion of the
claims on the 7-9/80 QER, the Agency compared Exhibit L, which was
submitted in support of the 10-12/80 QER, to documentation which the
State had submitted in partial support of the 7-9/80 QER (State's(4)
Exhibit 16). /3/ The Agency found that the documents in Exhibit 16
corresponded precisely to the line items in Exhibit L with respect to
both description and amount. The Agency made this analysis by
identifying the amount of FFP for each line item in Exhibit L and
comparing each of these figures to the amount of supporting
documentation in Exhibit 16 which corresponded to each line item
described in Exhibit L. (See Agency's Exhibits M through R) The Agency
also compared the individual amounts shown as increasing adjustments on
the 7-9/80 and 10-12/80 QERs (Agency Exhibit U), which in turn
corresponded to the amounts in Exhibit L. The Agency took the position
that the similarity between Exhibit L and Exhibit 16, together with the
State's description in Exhibit K of the relationship between the two
claims, proved that the claims were duplicates.

The State did not dispute the similarity between Exhibit L and Exhibit
16. However, it submitted additional documentation in support of the
claim on the 10-12/80 QER (State's Exhibit 15) /4/ and argued that since
this documentation was clearly different from Exhibit 16, the claim on
the 10-12/80 QER did not duplicate the earlier claim supported by
Exhibit 16. /5/ The State also asserted that Exhibit K did not in fact
admit that the claims were duplicate claims, and argued that, in any
event, Exhibit K was not entitled to great weight.


In response, the Agency admitted that Exhibits 15 and 16 were indeed
different, but argued that Exhibit 15 was not related to the claim on
the 10-12/80 QER, so that the dissimilarity between the exhibits did not
prove anything.(5) Discussion We conclude that the record supports the
Agency's determination that $39,561,397 claimed on the 10-12/80 QER
duplicated a portion of the claims on the 7-9/80 QER. In another
decision involving the same general issue, the Board stated: The
disallowance rests on the Agency's finding that the claims were
duplicates. If that finding was erroneous, the State should be able to
offer some evidence to that effect since the State possesses all of the
documentation in support of the claims for both quarters. This evidence
need not be conclusive, but should at least provide some basis for the
Agency to re-examine its finding. New York State Department of Social
Services, Decision No. 439, June 17, 1983, p. 2. Here, the State has
presented no valid reason why the Agency should not have relied on the
description of the 10-12/80 claim in Exhibit L in making its
determination. The State argued that Exhibit L "could not possibly have
been an all inclusive statement of the details of the claim since the
review activities were still ongoing" on May 15, 1981, the date Exhibit
L was prepared. (State's brief dated February 26, 1985, p. 8) However,
the only detail which the State specifically identified as having been
omitted from Exhibit L was the use of the term "HR-COOP" to further
describe the claim. (Id.) The addition of the term "HR-COOP" to the
appropriate line items in Exhibit L would not in our view make Exhibits
L and 16 so dissimilar as to justify reversing the Agency's
determination. As the State itself noted, the HR-COOP claims were
merely a subclass of the HR to AFDC reclassification (see State's brief
dated February 26, 1985, p. 8), so that claims described in Exhibit 16
as HR to ADC might also have been HR-COOP to ADC claims. (One of the
adjustment schedules in Exhibit 16 in fact refers to "HR adults in Co-op
ADC households.") The State also stated that Exhibit L "was produced by
a lower level staff person in Appellant's Office of Finance and
Management in response to a verbal request" from the Agency. (Id.)
However, the State did not assert that the preparer was not authorized
by the State to produce this information or that the information was not
accurate (although as noted above, the State asserted that the
information was not complete). We note, moreover, that this Board has
previously held that memoranda provided to Agency auditors in response
to a request for information regarding (6) claims submitted by the State
"reflect the State's best understanding of the claims it had submitted,
despite the fact that the memoranda were not provided in the context of
a formal process. . . ." (New York State Department of Social Services,
Decision No. 433, May 31, 1983, p. 5) Accordingly, the Agency was
justified in basing its determination on a comparison of Exhibit L and
Exhibit 16. We further find that the Agency properly relied on Exhibit K
as evidence that the claims were duplicate claims. Exhibit K clearly
indicates that it was the State's intent to duplicate in its 10-12/80
QER a portion of the claims in its 7-9/80 QER for which the State wished
to present additional documentation not available at the time the 7-9/80
QER was filed. While Exhibit K does not state that the full amount of
the 10-12/80 QER duplicated amounts on the 7-9/80 QER, it specifically
identifies $71,906,844 claimed on the 10-12/80 QER as a duplicate claim.
(This amount was not disallowed in full by the Agency, apparently
because some claimed expenditures were not subject to its administrative
authority. (See Agency's brief dated August 26, 1983, p. 42)) Thus, the
State clearly believed that there were duplicate claims in excess of the
$4,471,760 which the State now concedes duplicates the 7-9/80 claim. The
State also attempted to show that the claims were not duplicates by
presenting as Exhibit 15 additional documentation allegedly supporting
the 10-12/80 QER. It asserted that since Exhibits 15 and 16 were
different, this demonstrated that the claims were not duplicate claims.
There is no dispute in this case that the State has documented
expenditures in Exhibit 15 which do not duplicate the expenditures
claimed on the 7-9/ 80 QER. The question presented, however, is not
whether the State can provide documentation in the amount of that claim,
but whether the documentation supports the particular claim that the
State intended to make when it filed the claim. As discussed further
below, we agree with the Agency that Exhibit 15 is not related to the
claim made in the 10-12/80 QER. Accordingly, Exhibit 15 is not properly
compared to Exhibit 16 for purposes of determining if the 10-12/80 QER
duplicated a portion of the 7-9/80 QER, and any dissimilarity between
the two exhibits has no bearing on this case. The test which has been
used by this Board in prior decisions for determining whether
documentation is related to an original claim is whether the
documentation is related both in subject matter and in amount to the
claim made in the QER. (See New York State Department of Social
Services, Decision No. 433, May 31, 1983; New York State Department of
(7) Social Services, Decision No. 445, June 30, 1983.) The State
asserted that since the amount of the documentation in Exhibit 15 is
close to the amount on the 10-12/80 QER, one branch of this test was
satisfied. (State's brief dated February 26, 1985, p. 9) However, the
correspondence between the total amount represented by the documentation
and the total amount claimed on the QER is meaningless in view of the
fact, noted by the Agency and not denied by the State, that the
individual amounts comprising Exhibit 15 are different from the
individual amounts shown in Exhibit L as comprising the 10-12/80 claim.
(See Agency's brief dated August 26, 1983, p. 50) Since the individual
amounts are different, then clearly Exhibit 15 is not related to the
10-12/80 claim even assuming that the same types of costs described in
Exhibit L are represented by Exhibit 15. Thus, as indicated above, the
State cannot show that amounts claimed on the 10-12/80 QER did not
duplicate amounts claimed on the 7-9/80 QER by comparing Exhibits 15 and
16. Conclusion For the foregoing reasons, we find that $39,561,397
claimed on the State's revised QER for the quarter ended December 31,
1980, duplicated claims made on the State's revised QER for the quarter
ended September 30, 1980, and that the Agency properly disallowed the
former claim on the ground that it was a duplicate claim. /1/ The State
provided documentation to support only $33,707,545 of the
remainder of the claim. The State indicated that, of the $33,707,545
which it had documented, $7,826,872 pertained to another disallowed
claim currently the subject of an appeal to the Board (Docket No.
84-105). However, the State agreed to reduce the amount in dispute by
this amount only on the condition that the Agency not assert any grounds
for the disallowance of the $7,826,872 other than those already stated
in the notice of disallowance in Docket No. 84-105. The Agency did not
comment on the State's offer. The State also admitted that the same
documentation was used to support additional, substantial amounts in the
instant case and in Docket No. 84-105, but declined to further reduce
the amount in dispute in either case. (State's brief dated February 26,
1985, pp. 4-5) The Agency did not point out that although the State had
also claimed the $7,826,872 on the 10-12/80 QER, this claim was not
included in the disallowance at issue here. (Agency's brief dated
August 26, 1983, p. 52; Agency's brief dated April 5, 1985, pp. 3-4)
/2/ The line item descriptions in Exhibit L are as follows: Eastern
Regional Office Western Regional Office NYC HR to ADC NYC ADC-FC claim
NYC ADC-FC claim NYC Veteran's Association cases ADC Admin. (NYC)
/3/ The documentation which the Agency examined was submitted by the
State on July 15, 1983 in connection with its appeal of the disallowance
of a portion of the amount claimed on the 7-9/80 QER. The documentation
consists principally of monthly statements of expenditures (RF-2's)
prepared by counties in the State, and adjustment schedules describing
retroactive claims by New York City. /4/ Exhibit 15 was also
submitted on July 15, 1983 in connection with a prior appeal. /5/
Exhibit 15 also consists principally of county RF-2's and New York City
adjustment schedules.

AUGUST 08, 1985