New York State Department of Social Services, DAB No. 938 (1988)

DEPARTMENTAL GRANT APPEALS BOARD

Department of Health and Human Services

SUBJECT: New York State Department of Social Services

Docket No. 88-21
Decision No. 938

DATE:  February 23, 1988

DECISION

The New York State Department of Social Services (State) appealed a
decision by the Family Support Administration (Agency) disallowing
$1,755,347 in federal financial participation (FFP) claimed by the State
under Title IV-A of the Social Security Act (Act).  These costs had been
initially allocated to the State's Work Incentive Program (WIN) but had
been shifted to Title IV-A after the State exceeded its WIN
appropriation ceilings.  The Agency disallowed the costs on two bases.
The first was that section 403(d) of the Act imposes a ceiling on the
amount of federal funds that can be used to match the social and
supportive services provided by the State under the WIN program.  The
second was that the cost principles for state and local governments in
Office of Management and Budget (OMB) Circular A-87 preclude the State
from shifting costs allocable to a particular grant or cost objective to
another grant program in order to overcome fund deficiencies or avoid
restrictions imposed by law, and further provide that any excess of cost
over the Federal contribution under one grant agreement is unallowable
under other grant programs.  OMB Circular A-87, Attachment A, section
C.2.b., and Attachment B, section D.9.

The State argued that, notwithstanding the appropriation restrictions
applicable to the WIN program, the appellant is legally entitled under
section 403(a)(3)(C) of the Act to receive federal funding under Title
IV-A for otherwise eligible expenditures which were initially allocated
to the WIN program. The State contended that the appropriation
restriction merely carries out the intent of Congress to limit the
amount of FFP available under the WIN program at the enhanced rate of 90
percent.  The State argued that the appropriation limitation does not
preclude a state from receiving federal funding at the 50 percent rate
under Title IV-A for otherwise eligible expenditures which may have been
initially allocated to the WIN program. Finally, the State concluded
that any other interpretation, whether set forth in regulation or
administrative directive, would be contrary to the intent of Congress
and the plain meaning of the Act.

The State admitted that this case involved the same legal and factual
issues which were before the Board in Docket No. 87-54, where the same
arguments were put forward by the State and rejected in New York State
Dept of Social Services, DGAB No. 908 (1987).  The State requested that
the Board issue a summary decision on the basis of DGAB No. 908.  The
State submitted no new argument why DGAB No. 908 was wrong.

We therefore sustain the disallowance of $1,755,347, based on DGAB No.
908 (which we incorporate by reference here).

 


                            ________________________________ Cecilia
                            Sparks Ford

 


                            ________________________________ Norval D.
                            (John) Settle

 


                            ________________________________ Alexander
                            G. Teitz Presiding Board Member