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CASE | DECISION | ANALYSIS | JUDGE | FOOTNOTES

Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Appellate Division
IN THE CASE OF  


SUBJECT: New Jersey Department of Human Services

DATE: November 19, 2001
      

 


 

Docket No. A-01-18
Decision No. 1797
DECISION
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DECISION

The New Jersey Department of Human Services (New Jersey) appealed a determination by the Administration for Children and Families (ACF) disallowing $191,348 in federal financial participation (FFP) claimed under title IV-E of the Social Security Act (Act). This amount represented maintenance payments made by New Jersey on behalf of 49 children in a sample of foster care cases open from October 1, 1999 through March 31, 2000. ACF found the 49 cases ineligible for IV-E payments made for part or all of this period, and in some cases for earlier periods as well, because New Jersey failed to meet one or more statutory requirements for the IV-E program in each case. After reviewing additional documentation provided by New Jersey during the proceedings before the Board, ACF reversed its findings of ineligibility for two cases and stated that it would reduce the disallowance accordingly.

On appeal, New Jersey argued that ACF's findings of ineligibility with respect to all of the cases should be reversed because the procedures and standards for review were arbitrary and capricious. New Jersey also disputed some of ACF's findings of ineligibility involving the statutory requirements that 1) the foster family home or child care institution be licensed or approved as meeting state licensing standards, and 2) there be a judicial determination at the time the court orders the child's removal from home that reasonable efforts were made to prevent the child's removal or that such efforts were not required.

For the reasons discussed more fully below, we conclude that, in four cases, New Jersey established that the foster home was approved as meeting state licensing standards during the periods for which ACF disallowed payments. Accordingly, we reverse the disallowance in the amount attributable to these cases. We reject New Jersey's arguments regarding all of the other cases and sustain the remainder of the disallowance.

Statutory Background

Title IV-E was enacted as part of the Adoption Assistance and Child Welfare Act of 1980, Public Law No. 96-272. Under section 472(a) of title IV-E as enacted in 1980, federal matching of state foster care maintenance payments is available for a child in foster care who would have been eligible for Aid to Families with Dependent Children (AFDC) under title IV-A(1)-

but for his removal from the home of a relative
. . . if-

(1) the removal from the home . . . was the
result of a judicial determination to the effect
that continuation therein would be contrary to the
welfare of such child and (effective October 1, 1983) that reasonable efforts of the type described in section 471(a)(15) . . . have been made[.]

The Adoption and Safe Families Act of 1997 (ASFA), Public Law No. 105-89, amended section 472(a)(1) to insert the phrase "for a child" before "have been made."

Under section 471(a)(15) as enacted in 1980, a state plan under title IV-E must provide, effective October 1, 1983, that-

in each case, reasonable efforts will be made (A) prior to the placement of a child in foster care, to prevent or eliminate the need for removal of the child from his home, and (B) to make it possible for the child to return to his home.

ASFA amended section 471(a)(15) in relevant part to read:

(B) except as provided in subparagraph (D), reasonable efforts shall be made to preserve and reunify families-

(i) prior to the placement of a child in foster care, to prevent or eliminate the need for removing the child from the child's home; and

(ii) to make it possible for a child to safely return to the child's home;

* * * * *

(D) reasonable efforts of the type described in subparagraph (B) shall not be required to be made with respect to a parent of a child if a court of competent jurisdiction has determined that-

(i) the parent has subjected the child to aggravated circumstances (as defined in State law, which definition may include but need not be limited to abandonment, torture, chronic abuse, and sexual abuse)[.]

Section 471(a)(15)(D) as amended further provided that reasonable efforts are not required where the parent has committed murder or voluntary manslaughter of another child of the parent, aided or abetted such a murder or voluntary manslaughter, or committed a felony assault resulting in serious bodily injury to the child or another child of the parent, or the parental rights of the parent to a sibling have been terminated involuntarily. Section 471(a)(15)(D)(ii) - (iii).

ACF issued regulations in 1982 and 1983 implementing Public Law No. 96-272, but these regulations did not elaborate on the judicial determination requirement. 47 Fed. Reg. 30,925 (1982) and 48 Fed. Reg. 23,115 (1983). On January 25, 2000, ACF issued revised regulations which included provisions specifically addressing documentation of judicial determinations. 65 Fed. Reg. 4020. However, ACF stated that it did not rely on these regulations here since they are not applicable to cases involving children who entered foster care prior to the effective date of the regulations, March 27, 2000. ACF Br. at 27.(2) The revised regulations also implemented the ASFA amendments (which themselves became effective on November 19, 1997).

ACF also issued several written interpretations of the judicial determination requirement beginning in 1984. We discuss in our analysis below those interpretations that have a bearing on this appeal.

Another condition for IV-E funding for maintenance payments is the requirement in section 472(b) that such payments be made only on behalf of a child who is in the foster family home of an individual or in a child-care institution. Section 472(c) requires that each type of foster home be "licensed by the State in which it is situated or has been approved, by the agency of such State having responsibility for licensing" homes or institutions "of this type, as meeting the standards established for such licensing."

ANALYSIS
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1. Whether reversal of the disallowance is warranted on the ground that the procedures and standards used to review compliance with IV-E requirements were arbitrary and capricious.

The disallowance was based on ACF's on-site review in September 2000 of a sample of cases for which New Jersey had made foster care maintenance payments. New Jersey argued that the procedures and standards used by ACF in conducting the review were arbitrary, capricious and fundamentally unfair, and that the disallowance should therefore be reversed in full. Among other things, New Jersey alleged that no written protocols were provided to the reviewers; that the review team did not test the review process on actual cases prior to the review; that the review was not halted to resolve any questions of interpretation that arose during the review; and that New Jersey was given insufficient time to search the records for missing documentation.

These allegations, which ACF vigorously disputed, do not warrant reversal of the disallowance, even if true. New Jersey did not dispute that it had notice of the standards for establishing IV-E eligibility from the 20-year-old provisions of title IV-E itself and from ACF's written interpretations of these statutory requirements. In addition, even assuming that New Jersey had insufficient time to provide documentation during the review, New Jersey was afforded ample opportunity during the proceedings before this Board to present additional documentation to establish that the applicable requirements were met.(3) Thus, New Jersey did not demonstrate that any alleged deficiencies in the review procedures ultimately caused any prejudice.

New Jersey also asserted that "[t]he uncertainty of the federal reviewers as to what fact and/or documentation was acceptable to meet certain criteria" was demonstrated by 1) the fact that the amounts disallowed by ACF were different from the amounts shown in a draft report of the review given to New Jersey, and 2) the fact that notes taken by state representatives at the time of the review regarding why a given case had been deemed ineligible did not reflect the same information presented in the disallowance letter. New Jersey Br. at 6. These disparities were of no consequence, however, since nothing precluded ACF from revising the results of its review upon further examination and since New Jersey has had ample opportunity to contest the revised findings.(4)

New Jersey argued in addition that ACF failed to promulgate regulations "specifying the requirements subject to review, and the criteria to be used to measure conformity with such requirements," as required by the Act. New Jersey Br. at 10. This argument has no merit. The statutory provision on which New Jersey relied, section 1123A of the Act (42 U.S.C. § 1320a-1a), was enacted by the Social Security Act Amendments of 1994, Public Law No. 103-432, in part to replace the statutory authority in section 471 of the Act for withholding future funds based on substantial failure to comply. (See sections 203(a) and 203(b) of Public Law No. 103-432.) Section 1123A provides authority to withhold funds if a state's Foster Care and Adoption Program or Child Welfare Services Program substantially fails to conform to its state plan. Under section 1123A, the Secretary must implement a system for program reviews through regulations that specify, among other things, what requirements would be reviewed, when reviews would take place, and what criteria would be used to determine whether there was substantial failure to conform. Section 1123A does not apply to reviews of past maintenance payments for which a state had claimed FFP, such as the review in question here. These reviews may result in a disallowance pursuant to section 474(b)(4)(C) of the Act of maintenance payments determined by ACF not to meet the statutory requirements for IV-E payments. The regulations that became effective on March 27, 2000 distinguish between child and family services reviews of state conformity that can lead to penalties (see e.g., 45 C.F.R. § 1355.31) and IV-E eligibility reviews that can lead to disallowances (see e.g., 45 C.F.R. § 1356.71).

2. Whether cases were properly found ineligible on the ground that the foster family homes or child-care institutions were not licensed or approved as meeting state licensing standards.

We note preliminarily that ACF argued that New Jersey was precluded from raising this issue since it was not identified as a disputed issue in New Jersey's notice of appeal. ACF Br. at 46, n.1. This argument has no merit. The Board's regulations at 45 C.F.R. § 16.7(a) provide that a prospective appellant must submit a notice of appeal to the Board which includes, inter alia, "a brief statement of why the decision is wrong." After the Board acknowledges receipt of the notice of appeal, the appellant must submit "[a] written statement of the appellant's argument concerning why the respondent's final decision is wrong (appellant's brief)," following which the respondent must submit its brief. Section 16.8(a). There is nothing in the language of these or other provisions of the Board's regulations that requires that the notice of appeal identify all issues the appellant intends to raise in its appeal, nor has the Board ever required that as a matter of practice. In any event, New Jersey's notice of appeal states in part that "[t]his dispute concerns the disallowance of FFP under the Title IV-E program for various reasons, including: placement of foster children in non-licensed foster homes. . . ." Letter dated 11/20/00, at 1. Thus, New Jersey's notice of appeal did in fact raise this issue.

ACF initially found 33 cases ineligible on the ground that they did not meet the requirement that, to qualify as a foster family home or child-care institution, a foster home must be licensed or approved as meeting state licensing standards. New Jersey disputed the finding of ineligibility in 18 cases: case nos. 1, 2, 8, 12, 19, 22, 25, 35, 41, 42, 43, 50, 54, 56, 63, 65, OS5, and OS6.(5) After reviewing the documentation provided with New Jersey's appeal brief, ACF reversed its finding of ineligibility with respect to case nos. 1 and 2.(6)

New Jersey maintained that the disputed cases were approved as meeting state licensing standards by the Bureau of Licensing, Division of Youth and Family Services (DYFS). DYFS issues certificates of approval to foster homes that meet state licensing standards. According to New Jersey, these cases raised the issue of whether ACF properly found that a foster home should not be considered to be approved as meeting state licensing standards during the period between the expiration date shown on a certificate of approval (or temporary certificate of approval) and the issuance date of a new certificate of approval.(7) New Jersey argued that the Board had addressed this issue in two decisions, holding that the expiration of a license was not a basis for a finding of ineligibility where the foster home was subsequently relicensed. New Jersey Br. at 53-54, citing Pennsylvania Dept. of Public Welfare, DAB No. 1508 (1995), and Illinois Dept. of Children and Family Services, DAB No. 1564 (1996).

We conclude that New Jersey's reliance on these two Board decisions is misplaced. First, not all of the disputed cases fit the fact pattern in these decisions. In case no. 19, the record lacks any documentation of approval of the foster home in which the child resided during the period October 1, 1999 through March 31, 2000. In case nos. 25 and 43, the record lacks any documentation that the foster home was approved prior to that period.(8) In case nos. 65 and OS6, the record contains a document indicating that each foster home was approved before October 1, 1999, but (unlike documents in some other cases) not the duration of the approval.(9) Second, whether a foster home is licensed or approved as meeting state licensing standards is a matter of state law. To establish eligibility for IV-E, a state must show that under its state law in effect during the relevant time periods, a foster home was licensed or approved as meeting state licensing standards. In the Board decisions on which New Jersey relied, ACF had found some cases ineligible while not questioning other, similar cases in the same sample. Having accepted the foster homes in some cases as approved as meeting state licensing standards, ACF could not reasonably contend that similarly-situated foster homes in the same state were not approved as meeting state licensing standards. Here, however, ACF did not accept as approved any of the foster homes for which there was a gap between the expiration date of one certificate of approval and the date a new certificate was issued.

New Jersey did not cite to any state law or regulation on how to treat a gap in approval or licensure, but provided other evidence which we accept as sufficient to show that four of the disputed cases were approved as meeting state licensing standards. New Jersey provided the sworn statement of Richard Crane, Chief of the Bureau of Licensing, DYFS, which states that the foster homes in case nos. 35, 50, 63 and OS5 "were operating in good standing and in compliance with Division regulations" during the periods for which each case was found ineligible. Certification of Richard Crane dated 5/7/01 (NJ App. 304). Mr. Crane also states that these foster homes "had been inspected in keeping with timeframes set by State regulation and were continuing to meet State requirements." Mr. Crane attributes the delayed issuance of a recertification document "solely to administrative or clerical delays." Id. Although New Jersey did not submit the documents on which Mr. Crane relied, ACF did not contend that Mr. Crane was unqualified to determine that the foster homes he identified were approved as meeting state licensing standards, nor did ACF otherwise directly challenge the veracity of his statement. Thus, Mr. Crane's statement on its face supports the conclusion that the foster homes in the cases he identified were approved as meeting state licensing standards.

ACF asserted, however, that New Jersey had "represented to ACF that, under New Jersey regulations, foster homes that are originally approved or licensed must be renewed every two years and that without such renewal, the license expires." ACF Br. at 47. ACF pointed out that New Jersey had responded to ACF's request, made prior to the IV-E review, for a description of New Jersey's licensing procedures for foster homes as follows:

Facilities and homes under the regulatory authority of the bureau must make application for renewal of their license/certificate every two years. The Bureau of Licensing provides adequate advance notice of the facility's or [home's] impending expiration of the Certificate of Approval. The license/certificate would not be allowed to expire unless the facility or the home decided to cease operation and this cessation happened to coincide with the expiration date of the license. Otherwise, the Bureau would institute enforcement action against any facility/home that failed to apply for recertification in order to compel compliance with the regulations, and would refuse to renew the certificate if the facility/home did not comply.

ACF Ex. 16, at 5. Unlike ACF, we do not read this description to mean that after the expiration date on a foster home's certificate of approval has passed, the foster home is necessarily viewed as not approved as meeting licensing standards during the period until a new certificate is issued. On its face, the description merely states that a certificate expires if the foster home fails to apply for recertification. Since Mr. Crane indicated that the four foster homes he identified had been inspected, and since a new certificate of approval was ultimately issued in each case, it appears that they had applied for recertification. Thus, his statement is not inconsistent with the quoted language.

ACF also pointed to the fact that each certificate of approval contained an expiration date. ACF pointed to a letter from DYFS advising a foster home that its certificate of approval authorized it "to operate as a foster home until the expiration date specified on the Certificate." ACF Br. at 47-48, quoting NJ App. 275. The issue is not, however, whether the expired certificate evidences approval after it expires. Instead, the issue is whether the expiration of the certificate necessarily precludes a state from either extending the approval beyond the expiration date or treating the subsequent reapproval as retroactive to the expiration date where there is some assurance that the licensing standards were met during this period. We find that New Jersey's standard operating procedure did not preclude New Jersey from treating as approved as meeting state licensing standards a foster home that had been inspected and found in compliance but for which a new certificate was not issued until after the expiration date on the prior certificate.

We therefore conclude that case nos. 35, 50, 63 and OS5 were IV-E eligible.(10)

New Jersey also submitted the sworn statement of Donna L. Perna, an Administrative Analyst in DYFS, as evidence that the foster homes in four additional cases were approved as meeting state licensing standards. Ms. Perna states that the foster homes in case nos. 5, 9, 44, and 75 are shown in New Jersey's Provider Caretaker Information System (PCIS) as "homes approved for placement during the period of the federal Title IV-E audit." Certification of Donna L. Perna dated 5/9/01 (NJ App. 305-306). Unlike Mr. Crane's statement, however, Ms. Perna's statement does not state that the foster homes complied with DYFS requirements or regulations, that the foster homes had been inspected, or that the lack of a current certificate during the relevant period was due solely to administrative or clerical delays. Moreover, the PCIS status "approved for placement" does not clearly relate to licensing standards, and Ms. Perna does not explain the significance of this status. Thus, her statement does not establish that the foster homes she identified were approved as meeting state licensing standards.

New Jersey also suggested that ACF's findings of ineligibility were unwarranted because "New Jersey had undertaken a major change in its licensing procedures, which required a 'phased in' implementation." New Jersey Reply Br. at 8. ACF acknowledged in issuing the disallowance letter that "the phased-in implementation of the new procedures contributed to the large number of foster care providers who were found ineligible for the review period because their license had expired or a license had not been issued." ACF Ex. 17, at 5. Nevertheless, there is simply no authority in the statute for providing federal funding for periods during which there was no assurance that either the old or the new licensing standards were met.

As discussed above, Mr. Crane's statement provides such an assurance with respect to the foster homes in four of the cases. However, the fact that his statement is limited to these four cases indicates that he did not view any other cases in which there was a gap between the expiration date of one certificate and the date a new certificate was issued as approved as meeting state licensing standards. We note, moreover, that the gap between these dates in the other cases (case nos. 8, 22, 41, 42, 54, and 56) is six months or longer. A gap of this duration suggests that the delay in issuing a new certificate was not simply administrative or clerical, as was true for the cases addressed in Mr. Crane's statement. In addition, the documentation provided for these cases contains some additional information that would make us reluctant to infer that the licensing standards were met during the gap period merely because approval was documented for periods before and after. For example, in case no. 41, the earlier approval was for four children while the later approval was for only one child. NJ App. 259 and 261. In case no. 54, the space for indicating the "Renewal Date" was left blank on the inspection report that preceded the later approval. NJ App. 276.

Accordingly, we conclude that ACF properly found all of the cases at issue here ineligible except case nos. 35, 50, 63 and OS5, as to which we reverse the disallowance.

3. Whether cases were properly found ineligible on the ground that there was no judicial determination that reasonable efforts were made to prevent the child's removal from home.

ACF found 14 cases ineligible on the ground that there was no judicial determination that reasonable efforts were made to prevent the child's removal from home ("RE determination").(11) New Jersey did not dispute that there was no express RE determination in the court order removing the child from home. New Jersey argued, however, that in all but one case the court nevertheless made the requisite judicial determination.(12)

New Jersey argued first that the court orders in most of the cases complied with the requirement for a RE determination because they cited to certain provisions of the state's child protection and welfare laws. ACYF-PIQ-86-02, issued on May 8, 1986, stated in pertinent part that--

. . . if State law unambiguously requires
that removal may only be based on a determination
that remaining in the home would be contrary to the
child's welfare (and in the appropriate ircumstances, that removal can only be ordered after reasonable efforts to prevent removal have been made), it must be assumed that a judge who orders a child's removal from the home in accordance with that State law does so only for the reasons authorized by the State statute. This conclusion can be drawn only if the State law clearly allows removal under no other circumstances except those required under section 472(a)(1) of the Act. If a State can show that it has such a clear and unequivocal State law, and if the court order is expressly based on that law, then the order can be accepted as sufficient evidence that the required determinations have been made.

ACF Ex. 7, at 2. However, as discussed below, there is no basis for finding any cases eligible under this policy.

New Jersey noted that the court orders in case nos. 4, 11, 21, 33, 37, 55, 67, 71, 74, 77, 79, and 80 cited to N.J.S.A. 30:4C-12 (mis-cited in New Jersey's brief as N.J.S.A. 30:4D-12), captioned "Filing complaint; investigation; application for court order; hearing." This provision sets out the procedures for the filing of a complaint with DYFS by any person or public or private agency or institution interested in a child whose parent, guardian, or other person having custody and control of the child appears to be "unfit to be entrusted with the care and education of such child . . ."; for investigation of the complaint by DYFS; and for application by DYFS for a court order placing the child under DYFS' care and supervision. New Jersey asserted that the court's citation to N.J.S.A. 30:4C-12 signified that the court had relied on the results of the DYFS investigation required by this provision. New Jersey would have us conclude that the citation therefore established that the court made a RE determination. However, the cited provision does not require that DYFS investigate whether efforts were made to prevent the child's removal from home or preclude DYFS from filing a complaint unless reasonable efforts have been made to prevent the child's removal. Further, there is nothing in the cited provision that addresses the court's authority to order a child's removal. Thus, the court's citation to this provision is not evidence that the court made a RE determination.

New Jersey noted that the court orders in the cases listed above also cited to N.J.S.A. 9:6-8.21 et seq., which includes N.J.S.A. 9:6-8.28, captioned "Preliminary orders of court before preliminary hearing held." (Some of these orders specifically cited to N.J.S.A. 9:6-8.28 as well.) This provision permits temporary removal of a child prior to a hearing "if the child appears so to suffer from the abuse or neglect of his parent or guardian that his immediate removal is necessary to avoid imminent danger to the child's life, safety or health." New Jersey asserted that the court found as required by this section that the child was in imminent danger. New Jersey then argued that the cases were not ineligible since reasonable efforts to prevent the child's removal from home are not required when a child is in imminent danger.

This argument has no merit. However, our analysis is different for those cases in which the court order was issued prior to the November 19, 1997 effective date of ASFA (case nos. 4, 11, and 21) than for the remaining cases, in which the court order was issued after that date.

ACF's longstanding interpretation of the requirement for a RE determination prior to the effective date of ASFA stated in pertinent part:

With regard to emergency situations, if the agency'sjudgment was that services could not have prevented removal of the child, the court at the time of the adjudicatory hearing must find that the lack of preventive efforts was reasonable.

ACYF-PA-84-1, issued January 13, 1984 (ACF Ex. 4, at 3). This statement reflected ACF's view that "an emergency situation does not automatically render reasonable efforts ineffective, unnecessary or inappropriate."(13) ACF Br. at 82. According to ACF, examples of services which might adequately address emergency situations and make the child's removal unnecessary include housing services provided to a family that is on the verge of eviction and homemaking services, family preservation services and/or counseling services provided to a parent who is overwhelmed and unable to properly care for the household and children. Id. Thus, even where the child's removal was alleged to be necessary due to an emergency situation, the court was required to find either that reasonable efforts were made to prevent removal or that the lack of such efforts was reasonable. The court orders in the disputed cases do not make either finding.

The ASFA amendments created an exception to the requirement for reasonable efforts where "a court of competent jurisdiction has determined that" the parent has subjected the child to "aggravated circumstances . . . as defined in State law," or that certain other extreme circumstances exist. If a court determines pursuant to this amendment that such circumstances exist, there is no need for the court to determine that reasonable efforts are not required, since that conclusion follows by operation of law. On the other hand, the exception to the requirement for reasonable efforts does not apply unless the court has determined that such circumstances exist. Thus, New Jersey must document that the court made the latter determination in order to show that a RE determination was not required.

We find no basis for concluding that the court made a determination that the circumstances specified in ASFA existed in the cases at issue here (case nos. 33, 37, 55, 67, 71, 74, 77, 79, and 80). N.J.S.A. 9:6-8.28 permits temporary removal of a child prior to a hearing "if the child appears so to suffer from the abuse or neglect . . ." (emphasis added). This provision does not contemplate a final determination at that time as to whether the child in fact suffers from abuse or neglect. The orders in these cases were all designated as Orders to Show Cause and were issued prior to a hearing. As New Jersey noted, R. 4:52-1(a) of the New Jersey Court Rules requires that such orders be based on an affidavit or verified complaint that immediate and irreparable damage will likely result without a temporary restraint. There is no requirement in the court rules that the court determine at that time that the allegations in the affidavit or verified complaint are true. Moreover, effective March 31, 1999, N.J.S.A. 30:4C-11.2 (quoted in ACF Ex. 16, at 6) provided that DYFS need not provide reasonable efforts to prevent placement of the child if a court has determined that "the parent has subjected the child to aggravated circumstances of abuse, neglect, cruelty or abandonment." The fact that none of the court orders issued after this date cited to this provision of state law strongly suggests that the court had made no such determination.

In addition to relying on citations in court orders to state statutory provisions, New Jersey argued that a RE determination could be inferred where the court order referred to a complaint, petition or DYFS report that indicated that reasonable efforts had been made or that reasonable efforts were not necessary because the child was in imminent danger. This argument ignores longstanding ACF policy. ACYF-PA-84-1 stated in pertinent part:

The court, after hearing the evidence, must be satisfied that reasonable efforts . . . have been made. Review and approval of the [state] agency's report and recommendation alone are not sufficient to meet the requirements of the Act; the court must make a determination that the agency's efforts were, in the judgment of the court, reasonable for preventing placement.

ACF Ex. 4, at 3. In addition, ACYF-PIQ-86-02 stated that reference in the court order to a petition does not satisfy the requirement in section 472(a)(1) for a judicial determination. This issuance further stated that "[o]nly if the court order expressly adopts the specific relevant language of the petition and makes clear that a judicial determination has been made" would this requirement be met. ACF Ex. 7, at 4.

ACF determined not to apply the policy regarding reference to petitions to cases in which the child entered care prior to October 1, 1986 (due to confusion about the applicable requirements when the foster care program was transferred from title IV-A to title IV-E).(14) However, none of the children in the cases in question here entered care prior to that date.(15)

New Jersey also asserted generally that "there was no requirement in the statute . . . that a certain formula needed to be followed, or that State courts must specifically note in their Orders that a determination of reasonable efforts had been made." New Jersey Br. at 21. New Jersey appeared to rely on Suter v. Artist M., 503 U.S. 347 (1992), as support for this proposition, quoting a statement in that decision to the effect that "[h]ow the State was to comply with this directive, and with the other provisions of the Act, was, within broad limits, left up to the State." Id. at 20. New Jersey's reliance on Suter is misplaced. The quoted statement refers to the requirement in section 471(a)(15) of the Act that states make reasonable efforts to prevent the child's removal from home, not to the requirement in section 472(a) that the court determine before removing the child from home that such efforts had been made. In any event, we have held (in cases not governed by the regulations that became effective March 27, 2000) that the absence of express language in the court order does not preclude a state from establishing that the child was eligible through other evidence adequate to show that the court in fact made the requisite determination. We have simply declined to infer from the mere fact that a court cited a document describing the actions taken by a state that the court necessarily determined that the efforts described were reasonable. See e.g., Pennsylvania Dept. of Public Welfare, DAB No. 1508, at 11 ("Evidence that reasonable efforts were in fact made may provide some support for a finding that such a determination was made; however, such evidence is not determinative without some basis for finding that the court examined the question and itself determined that reasonable efforts were made").

Accordingly, we conclude that New Jersey did not establish that the requisite RE determination was made in the cases at issue. We emphasize that our inquiry here is a limited one: whether New Jersey has met its burden of documenting its claims for FFP in the maintenance payments. Thus, our finding that New Jersey did not meet this burden "does not necessarily mean that the court's action was unsound or that the proper social work was not done, but simply represents a finding that the state agency has failed to document that its claims met the conditions Congress established as a prerequisite for title IV-E funding." Pennsylvania Dept. of Public Welfare, DAB No. 1702 (1999), quoting West Virginia Dept. of Health and Human Services, DAB No. 1257, at 10 (1991). Nevertheless, it is a fundamental principle of grants management that a grantee is required to document its costs, and that the burden of demonstrating the allowability of costs for which funding was received under a grant rests with the grantee. See, e.g., California Dept. of Health Services, DAB No. 1095 (1989); see also 45 C.F.R. §§ 74.50-74.53 (1994). Thus, the lack of documentation is an appropriate basis for the disallowance.

Conclusion

For the foregoing reasons, we reverse the disallowance with respect to four cases for which New Jersey provided documentation establishing that the foster family home or child-care institution in question was approved as meeting state licensing standards. We uphold the remaining disallowance (as reduced by ACF based on its determination in these proceedings that two additional cases met the licensing/approval requirement) since New Jersey did not provide documentation sufficient to establish that it met the applicable IV-E requirements.

JUDGE
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Donald F. Garrett

Marc R. Hillson

Judith A. Ballard
Presiding Board Member

FOOTNOTES
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1. The Personal Responsibility and Work Opportunity Reconciliation Act of 1996, Public Law No. 104-193, abolished the AFDC program and amended title IV-E to refer to title IV-A as in effect as of June 1, 1995.

2. The October 20, 2000 disallowance letter refers to some other provisions of the amended regulations, none of which affects the issues raised in this appeal.

3. New Jersey was required to retain records supporting its IV-E claims until such time as this matter was resolved. See 45 C.F.R. § 74.53.

4. New Jersey also complained initially that the disallowance letter did not inform it of the time periods for which each of the cases was deemed ineligible. After ACF identified those time periods in its brief, New Jersey maintained that its "chances of locating" missing documentation were "effectively diminishe[d]. . . when, as here, there was limited to time to do so." New Jersey Reply Br. at 8. New Jersey did not request more time to provide any additional documentation to the Board, however, nor did it specifically identify any cases affected by the lack of prior notice.

5. We conclude that New Jersey did not dispute the findings of ineligibility in the remaining cases because New Jersey did not specifically address them in its briefs or submit any documentation pertaining to these cases to the Board.

6. ACF stated, however, that case no. 1 remains ineligible for a "partial period" on other grounds not contested by New Jersey. ACF Br. at 51. ACF also indicated that it would reverse its finding of ineligibility in case no. 12 if New Jersey provided additional information showing that a certificate of approval for the period March 2, 1999 to May 31, 2000 pertains to the foster home in which the child was placed during the period covered by the disallowance. Id. at 52.

7. ACF asserted, however, and New Jersey did not deny, that the cases were not found ineligible for any month during this period during which a certificate of approval was in effect at least one day. ACF Br. at 53, n.5.

8. New Jersey asserted that the foster home in case no. 25 was approved in July 1997. However, there is no evidence of that in the record before the Board, and ACF indicated that the documentation provided to it during the on-site review showed only that the home was not approved in August 1998.

9. In case no. OS6, the child was in a foster home in North Carolina, with which New Jersey had an interstate compact. New Jersey argued that it is not reasonable to require it to produce licensure documents from North Carolina. Since New Jersey was claiming FFP in the maintenance payments, however, the burden of documenting that the applicable requirements were met remains with it. Furthermore, we see no basis for finding that the December 2, 1999 home study New Jersey provided was sufficient to document that the foster home was approved as meeting state licensing standards.

10. None of these cases was found ineligible on any other ground.

11. Although ACF was willing to accept a judicial determination that reasonable efforts were made to reunify the child with his or her family (ACF Br. at 85, n.8), New Jersey did not argue that the court orders in any of the cases contained such a determination.

12. The disputed cases were: case nos. 4, 9, 11, 21, 33, 37, 55, 67, 71, 74, 77, 79, and 80. We conclude that New Jersey did not dispute ACF's finding with respect to case no. 27 because New Jersey did not address this case in its briefing and submitted no documentation for this case to the Board.

13. We note that ACYF-PA-84-1 requires only that this finding be made at the "adjudicatory hearing." Thus, the fact that this finding was absent from the temporary removal order would not render a case ineligible if New Jersey could show that the finding was made in the order issued pursuant to the adjudicatory hearing. New Jersey did not rely on the latter type of orders in these cases, however.

14. This was explained in a document referred to as the "Livingston memorandum," dated August 11, 1986, which ACF said was applicable both to the contrary to the welfare determination and to the reasonable efforts determination. See Pennsylvania Dept. of Public Welfare, DAB No. 1508.

15. New Jersey also pointed to the statement in the preamble to the revised regulations that "[t]he suggestion that the court order reference the facts of a court report . . . , or sustained petition as a mechanism for demonstrating that judicial determinations are made on a case-by-case basis . . . is an excellent one and would satisfy this requirement." 65 Fed. Reg. 4020, 4056 (Jan. 25, 2000). The requirement to which this statement refers is the requirement in the revised regulations that judicial determinations regarding reasonable efforts "must be explicitly documented and must be made on a case-by-case basis and so stated in the court order." Id. at 4089 (45 C.F.R. § 1356.21(d)). Thus, contrary to New Jersey's suggestion, ACF approved reference to the petition as a way to show that an express statement by the court that reasonable efforts were made (or were not required) was made on a case-by-case basis, not as a substitute for such a statement.

 

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