New York State Department of Social Services, DAB No. 1427 (1993)

Department of Health and Human Services

DEPARTMENTAL APPEALS BOARD

Appellate Division


SUBJECT:  New York State          DATE:  July 21, 1993 Department of
           Social Services Docket No. A-93-190 Decision No. 1427

                        DECISION

The New York State Department of Social Services (New York) appealed a
determination by the Administration for Children and Families (ACF)
disallowing $10,994 in federal financial participation (FFP) claimed by
New York under Title IV-A (Aid to Families with Dependent Children or
AFDC) of the Social Security Act.  New York had claimed reimbursement at
a FFP rate of 100 percent for the costs of New York's 1991-1992 fiscal
year Single Audit attributable to administrative costs of the AFDC
program.  The disallowed amount of $10,994 represented the difference
between New York's claim at 100 percent and ACF's assertion that the
allowable rate of FFP for reimbursable administrative costs was 50
percent.

In its notice of appeal New York acknowledged that the issues presented
by this case were previously raised and addressed in New York State
Dept. of Social Services, DAB No. 1410 (1993).  New York accordingly
requested that the Board issue a summary decision in this appeal based
on the Board's holding in DAB No. 1410.

ACF also agreed to the issuance of a summary decision here based on DAB
No. 1410.

In DAB No. 1410, the central issue was the proper interpretation of a
provision of the Single Audit Act, 31 U.S.C. . 7501 et seq., which
requires state or local governments to have a single audit performed in
any year in which they receive $100,000 or more in federal funds. New
York claimed that it was entitled to claim FFP, under such programs as
Medicaid and Title IV-E, for the costs associated with the single audit
at rates higher than those generally allowed for administrative
activities under the programs.  New York contended that the single audit
costs should be reimbursed at the overall FFP rates for each program,
with the overall FFP rate for each program determined by dividing the
federal contribution for a fiscal year by the total dollar amount
(federal and state) expended for that program in that year.

The Board rejected New York's arguments.  The Board held that while the
single audit costs are administrative costs, New York was seeking
funding for those costs at enhanced levels of FFP, at rates above those
specifically provided for administrative costs.  The Board emphasized
that eligibility for enhanced funding is "special," must be provided for
specifically by statute, and is available only when a state meets all
the qualifications for enhanced funding.  The Board found that the
Single Audit Act did not provide authority for reimbursement of single
audit costs at an enhanced rate of FFP.  Rather, New York was entitled
to be reimbursed for each program only at the rates provided by the
program statutes and regulations for administrative costs.

Conclusion

Accordingly, based on the analysis in DAB No. 1410, which we incorporate
by reference, we sustain the disallowance of $10,994.

 

                         _________________________ Donald F. Garrett

 

                         _________________________ Norval D. (John)
                         Settle

 

                         _________________________ M. Terry Johnson
                         Presiding Board Member