SUBJECT: Puerto Rico Department of the Family

DECISION

The Puerto Rico Department of the Family (Puerto Rico) appeals a determination by the Administration for Children and Families (ACF), dated November 14, 2003. ACF determined that Puerto Rico is subject to a penalty for failure to demonstrate with reliable data that, for fiscal years (FYs) 2001 and 2002, its child support enforcement program under title IV-D of the Social Security Act (Act) met performance standards relating to the establishment of paternity of minor children who were born out of wedlock. The penalty is $592,365, one percent of the amount of the federal funding that Puerto Rico received for FY 2001 under the Temporary Assistance for Needy Families program (TANF) established by title IV-A of the Act, and was imposed by reducing funding during FY 2004.

The Board previously addressed most of the issues raised in this appeal in Alabama Dept. of Human Resources, et. al., DAB No. 1989 (2005). The Board there upheld ACF's determinations, also announced in letters dated November 14, 2003, that nine other States were subject to penalties for failure to demonstrate that their child support enforcement programs met performance standards during FYs 2001 and 2002.

Our decision adopts and summarizes our analysis in DAB No. 1989, and explains why additional issues Puerto Rico raises do not provide a basis for overturning the penalty. Contrary to what Puerto Rico argues, ACF complied with applicable notice requirements. Proposed statutory changes Puerto Rico cited that would have changed the notice requirements in its favor were never enacted, so we and ACF must apply the provisions as in effect. Puerto Rico's actual performance at establishing paternity for FY 2001 was sufficient so that Puerto Rico could have avoided a penalty if it had submitted reliable data on time. While Puerto Rico therefore presents a case that seems sympathetic at first blush, we nevertheless uphold the penalty. The statute and regulations reflect the importance placed on timely submission of reliable data - a matter within a state's control. Puerto Rico submitted data for 18 months (rather than for the correct year), and then failed to meet the required performance level in FY 2002. ACF was not required to disregard Puerto Rico's data failure since that failure adversely affected the timely determination of the FY 2001 performance level. Moreover, ACF's implementation of the penalty provisions gave clear notice to states that a penalty would be imposed for unreliable data in one year followed by failing IV-D performance in the next.

Summary of the applicable law

Title IV-A of the Act (sections 401-419; 42 U.S.C. §§ 601-619), "Block Grants to States for Temporary Assistance for Needy Families" (the TANF program), provides grants to eligible states that have approved programs for providing assistance to needy families with children, and for providing their parents with job preparation, work and support services to enable them to leave the program and become self-sufficient. Sections 401, 402 of the Act. To receive TANF funds, a state must operate a child support enforcement program consistent with title IV-D of the Act. Section 402(a)(2) of the Act. Title IV-D (sections 451-469B; 42 U.S.C. §§ 651-669b) is a cooperative federal-state program that aims at increasing the effectiveness of child support collection by such measures as locating absent parents, establishing paternity, obtaining child and spousal support, and assuring that assistance in obtaining support is available to all children for whom it is requested. Maryland Dept. of Human Resources, DAB No. 1875 (2003), citing section 451 of the Act. States operate their child support enforcement programs subject to oversight by ACF's Office of Child Support Enforcement (OCSE). We refer in this decision to ACF as the respondent federal agency; the IV-D regulations refer to OCSE. Under the TANF and child support enforcement programs at titles IV-A and IV-D, the term "state" includes Puerto Rico. 45 C.F.R. §§ 260.30, 301.1.

Titles IV-A and IV-D and regulations at 45 C.F.R. Part 305 create a system of incentives and penalties under which federal TANF funds are awarded to or withheld from states based on scores they achieve on several IV-D performance measures. The performance measure at issue here is called the "paternity establishment percentage" (PEP). It measures a state's performance at establishing the paternity of children born out of wedlock. (There are five performance measures used to award incentives, of which three are also used to impose penalties.) ACF determines a state's level of performance based on data that the state submits, using a form prescribed by ACF. States are assessed on their performances for each federal fiscal year (FY or FFY), which runs from October 1 through September 30. 45 C.F.R. § 305.32. States must submit complete and reliable performance data for each fiscal year by December 31 following the end of the fiscal year, and only data submitted by that date will be used to determine the state's performance for that fiscal year. Id. ACF conducts data reliability audits, or DRAs, to determine if the data that the state submits for a fiscal year are complete and reliable; the data must meet a 95 percent standard of reliability. 45 C.F.R. § 305.1(i). ACF may disregard the unreliability of data if it determines that the unreliability is of a technical nature that does not adversely affect the determination of the state's performance measures. 45 C.F.R. § 305.62. (For convenience, in this decision we sometimes refer to the complete and reliable data that states must submit simply as reliable data.)

As we concluded in DAB No. 1989, the Act and regulations impose a penalty on a state that, for two consecutive years, fails to demonstrate with reliable data that it achieved the required PEP. Thus, a state is subject to a penalty if, for two consecutive years, it fails either to achieve the required PEP, or to timely submit reliable data needed to calculate its PEP. (A third basis for a penalty, in addition to failing the IV-D penalty performance measures or submitting unreliable data, is failure to substantially comply with the requirements of the IV-D program. That basis is not at issue here, where the penalty is based on unreliable PEP data and failing PEP performance). The penalties consist of reductions in the annual TANF funding that a state receives under title IV-A of the Act, called the State Family Assistance Grant (SFAG). The penalties range from one to five percent, depending on the number of violations and on how many years a state continues to fail to demonstrate with reliable data that it met the required level of IV-D performance. A state may appeal a decision imposing penalties to the Board.

ACF imposed the penalty against Puerto Rico pursuant to section 409 of the Act, titled "Penalties." Section 409(a) provides for TANF penalties against states, for some 14 categories of noncompliance with various requirements imposed by title IV, mostly relating to a state's TANF program under title IV-A. ⁽¹⁾ At issue here is section 409(a)(8) of the Act, which imposes the IV-D performance penalties. Section 409(a)(8) provides in relevant part as follows:

(8) NONCOMPLIANCE OF STATE CHILD SUPPORT ENFORCEMENT PROGRAM WITH REQUIREMENTS OF PART D.--

(A) IN GENERAL.--If the Secretary finds, with respect to a State's program under part D, in a fiscal year beginning on or after October 1, 1997--

(i)(I) on the basis of data submitted by a State pursuant to section 454(15)(B), or on the basis of the results of a review conducted under section 452(a)(4), that the State program failed to achieve the paternity establishment percentages (as defined in section 452(g)(2)), or to meet other performance measures that may be established by the Secretary;
(II) on the basis of the results of an audit or audits conducted under section 452(a)(4)(C)(i) that the State data submitted pursuant to section 454(15)(B) is incomplete or unreliable; or
(III) on the basis of the results of an audit or audits conducted under section 452(a)(4)(C) that a State failed to substantially comply with 1 or more of the requirements of part D (other than paragraph (24) or subparagraph (A) or (B)(i) of paragraph (27), of section 454); and
(ii) that, with respect to the succeeding fiscal year--

(I) the State failed to take sufficient corrective action to achieve the appropriate performance levels or compliance as described in subparagraph (A)(i); or
(II) the data submitted by the State pursuant to section 454(15)(B) is incomplete or unreliable; the amounts otherwise payable to the State under this part for quarters following the end of such succeeding fiscal year, prior to quarters following the end of the first quarter throughout which the State program has achieved the paternity establishment percentages or other performance measures as described in subparagraph (A)(i)(I), or is in substantial compliance with 1 or more of the requirements of part D as described in subparagraph (A)(i)(III), as appropriate, shall be reduced by the percentage specified in subparagraph (B).

For some of the other violations listed at section 409(a), which relate mostly to a state's TANF program under title IV-A, the Secretary may not impose a penalty if he finds that there was reasonable cause for the violation, and must afford a state the opportunity to enter into a corrective compliance plan prior to imposing a penalty. Notably, however, section 409 withholds those ameliorative measures from the title IV-D penalties at issue here. Sections 409(b),(c) of the Act.

The IV-D penalty provisions are implemented at 45 C.F.R. § 305.61, which also refers to two other penalty performance measures created by the regulations. These measures, not at issue here, assess a state's performance at establishing orders of support and at collecting support in IV-D cases.

§ 305.61 Penalty for failure to meet IV-D requirements.

(a) A State will be subject to a financial penalty and the amounts otherwise payable to the State under title IV-A of the Act will be reduced in accordance with § 305.66:

(1) If on the basis of:
(i) Data submitted by the State or the results of an audit conducted under § 305.60 of this part, the State's program failed to achieve the paternity establishment percentages, as defined in section 452(g)(2) of the Act and § 305.40 of this part, or to meet the support order establishment and current collections performance measures as set forth in § 305.40 of this part; or
(ii) The results of an audit under § 305.60 of this part, the State did not submit complete and reliable data, as defined in § 305.1 of the part; or
(iii) The results of an audit under § 305.60 of this part, the State failed to substantially comply with one or more of the requirements of the IV-D program, as defined in § 305.63; and
(2) With respect to the immediately succeeding fiscal year, the State failed to take sufficient corrective action to achieve the appropriate performance levels or compliance or the data submitted by the State are still incomplete and unreliable.
(b) The reductions under paragraph (c) of this section will be made for quarters following the end of the corrective action year and will continue until the end of the first quarter throughout which the State, as appropriate:

(1) Has achieved the paternity establishment percentages, the order establishment or the current collections performance measures set forth in § 305.40 of this part;
(2) Is in substantial compliance with IV-D requirements as defined in § 305.63 of this part; or
(3) Has submitted data that are determined to be complete and reliable.

In the preamble to the Part 305 regulations, forwarded to the states as part of Action Transmittal OCSE-AT-01-01 (Jan. 3, 2001), ACF referred to the first of the two consecutive years as the performance year. 65 Fed. Reg. 82,178, 82,186, 82,187, 87,189 (Dec. 27, 2000). In this appeal the performance year was FY 2001, and the corrective action year was FY 2002.

The penalties range from one to two percent of a state's SFAG for the first finding of two consecutive years of violations, from two to three percent for the second consecutive finding, and from three to five percent, for the each subsequent consecutive finding. Section 409(a)(8)(B) of the Act; 45 C.F.R. § 305.61(c). A state must expend additional state funds to replace any reduction in the SFAG resulting from penalties. Section 409(a)(12) of the Act; 45 C.F.R. § 262.1(e).

The performance measure at issue here, the paternity establishment percentage, is essentially the percentage of children born out of wedlock for whom paternity has been established or acknowledged; it is "commonly known as the PEP." 45 C.F.R. § 305.2(a)(1). The Act and the regulations at Part 305 establish two versions of the PEP, one based on children in a state's IV-D caseload, the other based on all children in the state. States may select either measure and may change their selection from year to year. Id.; section 452(g)(1) of the Act. Puerto Rico selected the "Statewide PEP," which is based on all births in a state and is defined as follows:

[T]he term "statewide paternity establishment percentage" means, with respect to a State for a fiscal year, the ratio (expressed as a percentage) that the total number of minor children--

(i) who have been born out of wedlock, and
(ii) the paternity of whom has been established or acknowledged during the fiscal year, bears to the total number of children born out of wedlock during the preceding fiscal year; . . . .

Section 452(g)(2)(B) of the Act. The regulation expresses the Statewide PEP with the following ratio:

Total # of Minor Children who have been Born Out-of-Wedlock and for Whom Paternity has been Established or Acknowledged During the Fiscal Year

Total # of Children Born Out-of-Wedlock During the Preceding Fiscal Year

45 C.F.R. § 305.2(a)(1).

A state must maintain a PEP of at least 90% to avoid a penalty. A state with a PEP lower than 90% may still avoid a penalty if its PEP increased over the PEP for the previous year by the percentages specified in the following table from the regulation:

--------------------------------------------------------------------------
PEP    Increase required  Penalty FOR FIRST FAILURE if
            over previous         increase not met
           year's PEP
----------------------------------------------------------------------------

90% or more ........... None ................ No Penalty.

75% to 89% ............ 2% .................. 1-2% TANF Funds.

50% to 74% ............ 3% .................. 1-2% TANF Funds.

45% to 49% ............ 4% .................. 1-2% TANF Funds.

40% to 44% ............ 5% .................. 1-2% TANF Funds.

39% or less ........... 6% .................. 1-2% TANF Funds.

45 C.F.R. § 305.40(a)(1), Table 4.

Background: basis for the penalty

ACF notified Puerto Rico that it is subject to a penalty in a letter from the Assistant Secretary for Children and Families dated November 14, 2003. The letter stated that the PEP data that Puerto Rico submitted for FY 2001 did not meet the 95% data reliability standard and could not be used to establish Puerto Rico's PEP for FY 2001, and that Puerto Rico's PEP for FY 2002 was 88%, below the 90% minimum, and did not increase over the previous year's PEP by the 2% required to avoid a penalty. Puerto Rico Exhibit (Ex.) 1. The letter stated that Puerto Rico had thus failed for a second consecutive year to attain the minimum PEP level or to submit reliable data, and was subject to a reduction in TANF funding equal to one percent of its adjusted SFAG for the TANF program for FY 2001, "imposed quarterly, beginning with first quarter of FFY 2004, for the four quarters of FFY 2003 . . . ." ⁽²⁾ Id. ACF subsequently informed Puerto Rico that the funding reductions would begin during FY 2004, because states had not been notified of their penalties until after the start of that fiscal year. Puerto Rico Ex. 12.

Puerto Rico challenges ACF's determination that the data that Puerto Rico submitted on its PEP performance for FY 2001 were not reliable, and the process that ACF used to notify Puerto Rico that it is subject to a penalty. Puerto Rico argues that ACF failed to comply with the regulation governing notice, and that the notice process is defective for failing to afford states a full year after notice of data or performance deficiencies to correct those deficiencies in the following year. Puerto Rico asserts that the unreliability of its FY 2001 data, which resulted from submission of data covering too large a time period, did not significantly impact its FY 2001 PEP, and that ACF should thus have excused its data unreliability pursuant to its authority to disregard unreliability of a technical nature that does not adversely affect the determination of a state's performance. Puerto Rico argues that ACF should have used the correct data that Puerto Rico subsequently submitted after the deadline for FY 2001 data, which showed that Puerto Rico attained a passing PEP score for that year. Puerto Rico also argues that it was not subject to a penalty for failing the PEP performance measure for two consecutive years because its failure for FY 2001 was a data reliability failure.

Most of Puerto Rico's arguments are similar to those that the appellant States made in DAB No. 1989. We adopt and summarize our analysis in DAB No. 1989, and explain why additional issues Puerto Rico raises do not provide a basis for overturning the penalty.

I. ACF complied with applicable notice requirements.

A. ACF was not required to provide notice until Puerto Rico was subject to a penalty for two years of noncompliance.

Puerto Rico argues that ACF failed to comply with the regulation prescribing the notice that ACF provides a state that is subject to penalties, and that the November 14, 2003 letter was inconsistent with what Puerto Rico alleges was the intent of the statute, that states have a year to take corrective action before the imposition of a penalty.

The notice regulation provides (emphasis added):

45 C.F.R. § 305.66 Notice, corrective action year, and imposition of penalty.

(a) If a State is found by the Secretary to be subject to a penalty as described in § 305.61 of this part, the OCSE will notify the State in writing of such finding.
(b) The notice will:

(1) Explain the deficiency or deficiencies which result in the State being subject to a penalty, indicate the amount of the potential penalty, and give reasons for the finding; and
(2) Specify that the penalty will be assessed in accordance with the provisions of 45 C.F.R. § 262.1(b) through (e) and 262.7 if the State is found to have failed to correct the deficiency or deficiencies cited in the notice during the automatic corrective action year (i.e., the succeeding fiscal year following the year with respect to which the deficiency occurred.)
(c) The penalty under § 305.61 of this part will be assessed if the Secretary determines that the State has not corrected the deficiency or deficiencies cited in the notice by the end of the corrective action year.
(d) Only one corrective action period is provided to a State with respect to a given deficiency where consecutive findings of noncompliance are made with respect to that deficiency. In the case of a State against which the penalty is assessed and which failed to correct the deficiency or deficiencies cited in the notice by the end of the corrective action year, the penalty will be effective for any quarter after the end of the corrective action year and ends for the first full quarter throughout which the State IV-D program is determined to have corrected the deficiency or deficiencies cited in the notice.
(e) A consecutive finding occurs only when the State does not meet the same criterion or criteria cited in the notice in paragraph (a) of this section.

Puerto Rico argues that November 14, 2003 letter announcing that Puerto Rico was subject to the penalty it appeals did not comply with this regulation because it was issued too late to provide Puerto Rico with the opportunity to correct its FY 2001 failures during FY 2002, the corrective action year. Puerto Rico argues that ACF failed to comply with the regulation because it provided no specific notice, prior to the November 14, 2003 letter, that a penalty would be imposed if deficiencies during FY 2001 continued in FY 2002.

Puerto Rico's argument that ACF failed to comply with the requirements of 45 C.F.R. § 305.66 is essentially the same argument that the Board rejected in DAB No. 1989. There, we held that the law and regulations do not require notice of a state's IV-D data or performance failures until after the end of the corrective action year, and that the penalty process is self-implementing in that the corrective action year automatically follows the performance year without notice from ACF. We further held that the structure of the system established by section 409 of the Act and the Part 305 regulations necessarily does not permit states a full year following notice of their performance-year failures before the imposition of penalties upon the end of the corrective action year. We concluded that these provisions place on a state the ultimate responsibility for monitoring its own performance, and that the States were aware of their own performances and moreover had been informed of their data reliability problems during FY 2002, the corrective action year. Our reasons for so holding and for determining that Puerto Rico's arguments similarly lack merit are as follows:

• The notice requirements of section 305.66 apply if a state is found to be "subject to a penalty as described in § 305.61 . . . ." Section 305.61 provides that a state will be "subject to a financial penalty," and the amounts otherwise payable to it under title IV-A will be reduced, upon the completion of two consecutive years of failing performance or unreliable data relating to the same performance measure. A state is thus not subject to a penalty, and the notice requirements of section 305.66 do not apply, until the completion of two consecutive years of noncompliance, after which a penalty must be assessed. Similarly, the Act imposes penalties if the Secretary finds that a state failed to attain the required level of performance in the same penalty performance measure, submitted unreliable data needed to calculate performance, or failed to substantially comply with the requirements of the IV-D program, and "that, with respect to the succeeding fiscal year," the state failed to take sufficient corrective action to achieve the appropriate performance levels or compliance, or submitted unreliable data. Section 409(a)(8)(A) of the Act (emphasis added). Section 409(a)(8) makes no reference to notice being required to commence the second of the two consecutive years for which deficient performance or unreliable data will subject a state to a penalty. Thus, ACF is not required to notify a state that it is subject to penalties until after the end of two consecutive years of deficient performance or unreliable data.

• The conditional nature of some of the language in section 305.66, such as its reference to "potential penalties," likely reflects its incorporation of selected regulations from 45 C.F.R. Part 262 that concern penalties for some of the several violations listed in section 409(a) of the Act, other than the IV-D performance and data failures listed at section 409(a)(8) and at issue here. Part 262 addresses the collection of penalties for multiple violations, the maximum reduction that may be made in a state's SFAG regardless of the number of penalties, and the right to appeal penalty determinations to the Board. 45 C.F.R. §§ 262.1(b)-(e), 262.7. A IV-D penalty to which a state is subject following two years of unreliable data or IV-D performance is still a potential penalty because it is subject to these Part 262 provisions before the actual amount of the reduction to be taken in a state's SFAG is determined. The November 14, 2003 letter noted these other provisions, stating that the announced penalty "will be imposed in accordance with the provisions of 45 C.F.R. § 262.1(b) through (e) . . . ." Puerto Rico Ex. 1. However, there is no indication here that the penalty is to be combined with penalties under portions of section 409(a) other than section 409(a)(8), or exceeds the maximum reduction that may be taken in a state's SFAG. In the absence of multiple penalties, ACF could reasonably inform Puerto Rico of the amount of its SFAG reduction in the November 14, 2003 letter issued pursuant to section 305.66, as it did.



• The structure of the penalty system necessarily does not permit the start of the corrective action year to be conditioned on notice from ACF of performance or data reliability deficiencies in the performance year, and further does not afford a state a full year following notice to correct its deficiencies before being subject to penalties. A state has until December 31^st to submit its data relating to performance in a given fiscal year, which ends on the previous September 30. 45 C.F.R. § 305.32(f). As this deadline is approximately 90 days into the immediately succeeding corrective action year, it does not permit review of the data and notification to the state of data or performance findings in time for the state to have a full year to take corrective action. Language from the preamble to the notice regulation confirms that the decision that a state is subject to a penalty is a determination that "will be made as soon as possible after the end of the corrective action year." 65 Fed. Reg. 82,192.



• Section 410(a) of the Act, the Act's only requirement of notice regarding the penalties imposed by section 409(a), requires that the Secretary notify the chief executive officer of the state of any adverse action, including any action with respect to the imposition of a penalty under section 409, within 5 days after the date the Secretary takes such adverse action. Section 410 makes no reference to notice prior to the time that a state is subject to penalties for two consecutive years of IV-D performance and/or data failures, and Puerto Rico does not argue that this section is implicated here.



• Section 409 of the Act withholds from a state some of the opportunities to avoid a IV-D penalty that it affords for some of the other violations listed in section 409(a), which primarily concern the operation of a state's TANF program under title IV-A. Section 409(b) forbids the Secretary from imposing a penalty for those other violations if he finds that there was reasonable cause for the violation, and section 409(c) grants the state the opportunity to enter into a corrective compliance plan prior to suffering a penalty. However, section 409 states that these ameliorative measures, implemented by Part 262 of 45 C.F.R., do not apply to any penalty under section 409(a)(8). Sections 409(b)(2),(c)(4) of the Act. Thus, Puerto Rico's argument that it was not given an opportunity to propose and implement a corrective compliance plan provides no basis to reverse the penalty. The inapplicability of the corrective compliance plan process to IV-D violations underscores the self-implementing nature of the IV-D penalty process, which is not dependent on intermediate action by ACF (such as approving a corrective compliance plan or providing a state notice of its performance failures) before the automatic corrective action year commences.



• The self-implementing nature of the penalty system is confirmed by a statement in the November 14, 2003 letter recognizing that states "do not have a full year to correct deficiencies following the release of final DRA reports." The letter noted that Congress had been considering a "technical fix" to the federal statute to ensure that states receive a full year for corrective action following notice of a deficiency, but that in the absence of such an amendment there was no choice but to impose penalties under current law until Congress enacts legislation. Puerto Rico Ex. 1. The States in DAB No. 1989, like Puerto Rico here, cited these statements as showing that ACF did not provide proper notice of FY 2001 deficiencies in time for corrective action during FY 2002. However, as we held in DAB No. 1989, the cited statement and the legislative history of the subject amendment acknowledge that under the current law the corrective action year commences automatically after the performance year, without any action by ACF in the form of audit reports or notices. The amendment would have "change[d] the corrective action year to the fiscal year following the fiscal year in which the Secretary makes a finding of noncompliance and recommends a corrective action plan." The reason for this proposed change was that "[c]urrent language does not recognize the time necessary to conduct federal audits and that those audits now occur during what is, under current law, a state's corrective action year. This technical correction will give states a full year to correct identified deficiencies." S. Rep. No. 108-162, at 53-54 (Oct. 3, 2003). The subject bill, H.R.4, 108^th Cong., 1^st Sess., as reported in the Senate on October 3, 2003, was apparently never brought to a vote. 150 Cong. Rec. S3520, S3529, S3538 (Apr. 1, 2004). We are thus bound to apply the statute as written.



• States are responsible for monitoring their own performances and the reliability of their data. The Part 305 preamble cautions that a state "should be continuously monitoring its own performance and taking action to improve performance which its own data shows may fail to achieve the performance measures. The State is also responsible for maintaining proper procedures and controls to ensure data reliability and completeness." 65 Fed. Reg. 82,192. The preamble goes on to note that "the State should not wait or rely upon the Secretary's determination of a data or a performance deficiency in order to begin corrective action. Two consecutive years of failure (either poor data or poor performance) in the same performance measure criterion will trigger a penalty imposition." Id. Elsewhere, the preamble describes the automatic corrective action period as a "delay which allows States to identify and to correct either reporting or performance problems prior to being assessed a financial penalty," and again warns states that they "should be diligent in continuously monitoring their own performance and data reliability." 65 Fed. Reg. 82,205.



• States were in any event aware of their own performances because they are responsible for submitting the data used to calculate their performances and can perform the calculations themselves, and were aware of whether their FY 2001 data were reliable because they received draft and final DRA reports during 2002. In DAB No. 1989, we noted that the States had time periods ranging from four to seven months following release of the FY 2001 DRA reports (and from six to eight months following release of the draft reports), to correct any data reliability problems prior to submitting their FY 2002 data, which were due December 31, 2002. Here, ACF's DRA report on Puerto Rico's data submission for FY 2001 was dated June 20, 2002, its draft DRA report was dated May 2, 2002, and Puerto Rico was moreover briefed on the results of the FY 2001 DRA on February 7, 2002. Puerto Rico Exs. 6, 4; Puerto Rico Br. at 3. Puerto Rico was thus aware of the problems with its FY 2001 data in time to assure that those problems did not recur in FY 2002, and ACF in fact found that the PEP data that Puerto Rico submitted for FY 2002 met the data reliability standard.

See DAB No. 1989, at 11-26.

For the above reasons, we conclude that ACF complied with the applicable notice requirements in determining that Puerto Rico is subject to a penalty.

B. Puerto Rico's related arguments have no merit.

Puerto Rico also argues that the regulatory deadline for states to submit data, three months after the end of the federal fiscal year, is inconsistent with what Puerto Rico describes as the intent of the statute, that states have a year to take corrective action before the imposition of a penalty. 45 C.F.R. § 305.32(f). Puerto Rico argues that ACF was required to provide advance notice of its interpretation that 45 C.F.R. § 305.66 does not require notice of deficiencies prior to the start of the corrective action year. Puerto Rico cites federal court decisions holding that a federal agency must fairly inform any party of an interpretation that will be used to cut off that party's rights. Puerto Rico Br. at 10, citing General Electric Co. v. E.P.A., 53 F.3d 1324, at 1330 (D.C. Cir. 1995); GranCare, Inc. v. Shalala, 93 F.Supp. 2d 24 (D.D.C. 2000). Puerto Rico also argues that the regulations violate Puerto Rico's constitutional right to due process and equal treatment under the law by denying it the opportunity to submit and implement a corrective compliance plan, and by treating penalties differently than incentives. ⁽³⁾

As noted in our summary of the analysis in DAB No. 1989, ACF's determination that the corrective action year starts automatically is based on the plain language of the statute and regulations and is confirmed by the subsequent legislative history of the proposed amendment that Congress considered but did not pass. Because this aspect of the penalty system is mandated by the statute and regulations and is not a subsequent agency interpretation of the regulations, the court decisions that Puerto Rico cites are not applicable. Puerto Rico does not explain how the fact that statute does not apply the corrective compliance plan provisions to the IV-D penalties violates a right to due process and equal treatment. Puerto Rico had notice from the statute regarding the corrective action period, and all states are treated equally in this respect. Sections 409(b),(c) of the Act. In any event, Puerto Rico's constitutional argument provides no basis for the Board to ignore or decline to apply applicable statutory and regulatory requirements, as the Board does not have the power to declare a statute or regulation unconstitutional. It is well established that administrative forums, such as this Board, do not have the authority to ignore unambiguous statutes or regulations on the basis that they are unconstitutional. See, e.g., Sentinel Medical Laboratories, Inc., DAB No. 1762, at 9 (2001) (citations omitted), aff'd sub nom Teitelbaum v. Health Care Financing Admin., No. 01-70236 (9^th Cir. Mar. 15, 2002), reh'g denied, No. 01-70236 (9^th Cir. May 22, 2002).

Thus, for the reasons described above and explained in DAB No. 1989, we conclude that ACF complied with the applicable notice requirements in determining that Puerto Rico is subject to a penalty, and that Puerto Rico's related fairness arguments have no merit.

II. Puerto Rico failed to timely submit reliable PEP data for FY 2001.

States must submit complete and reliable data on their IV-D performances for each fiscal year by December 31 following the end of the fiscal year, and only data submitted by that date will be used to determine the state's performance for that fiscal year. 45 C.F.R. § 305.32(f). States report data to ACF using form OCSE-157, the Child Support Enforcement Annual Data Report; ACF has issued this form and instructions for completing it through a series of Action Transmittals. See, e.g., OCSE AT-98-20 (July 10, 1998); OCSE AT-99-15 (Dec. 22, 1999). ACF conducts data reliability audits, or DRAs, to determine if the data that the state submits for a fiscal year are complete and reliable. 45 C.F.R. §§ 305.1(i), 305.60. Congress signaled the importance of a state's responsibility for providing reliable data when it enacted the current IV-D penalty system that, in addition to penalizing deficient performance, also imposes penalties for failure to submit reliable data needed to calculate the performance levels, without regard to whether performance is deficient. States were moreover informed of the importance of reliable data by regulations requiring states to maintain computerized child support enforcement systems that can control, account for, and monitor all the factors in the support collection and paternity determination processes, and which provided federal funding at enhanced rates of 80% and 90% in the costs of developing and installing such systems. 45 C.F.R. §§ 307.5, 307.10, 307.30, 307.31.

ACF determined that Puerto Rico submitted unreliable PEP data for FY 2001, because Puerto Rico had submitted data on out-of-wedlock births and paternity establishments that covered an 18-month period, instead of the 12 months of the fiscal year. Puerto Rico Ex. 6, at 4-5 (FY 2001 DRA Report). ACF found that Puerto Rico submitted data for the period January 1, 2000 to June 30, 2001, when it should have submitted data for the 12-month period August 1, 2000 to July 31, 2001, which would have been consistent with the 12-month period that Puerto Rico used to report PEP data for FY 2000. ⁽⁴⁾ The FY 2001 DRA report explains that ACF counted as errors out-of-wedlock births and paternity establishments Puerto Rico reported at lines 8 and 9 that were from outside the correct 12-month reporting period. Id.

Puerto Rico submitted revised PEP data for FY 2001 covering the correct 12-month period, in a letter dated February 14, 2002. Puerto Rico Ex. 4. ACF responded in March 2002 that it could not accept the revised report because it was untimely, and that, because the data that Puerto Rico had submitted by the deadline were unreliable, a PEP would not be computed for FY 2001 for incentive purposes. Puerto Rico Ex. 5. The letter further stated that Puerto Rico could submit corrected data to be used to compute the FY 2002 PEP or to qualify for an incentive payment based on improved performance in FY 2002, by the deadline for submitting data for FY 2002. Id. Puerto Rico submitted the revised FY 2001 data in December 2002, and ACF determined that these data were reliable. ⁽⁵⁾ Puerto Rico Ex. 7. The correct but late FY 2001 PEP data, along with reliable FY 2000 data that Puerto Rico previously submitted, show that Puerto Rico achieved a PEP score of 92% for FY 2001. ⁽⁶⁾ ACF Br. at 22.

Puerto Rico argues, among other things, that ACF should have excused the unreliability of its FY 2001 data pursuant to its authority to disregard unreliability of a technical nature. Puerto Rico also argues that ACF should have used the correct data to determine that Puerto Rico had attained a passing PEP for that year, and that Puerto Rico thus did not have the two years of failure that subject a state to a penalty. We address Puerto Rico's arguments below.

A. ACF was not required to disregard the unreliability of PEP data that Puerto Rico submitted for FY 2001.

Section 409(a)(8) of the Act authorizes the Secretary to determine that a state's otherwise unreliable data are adequate if the unreliability is of a technical nature that does not adversely affect the determination of the state's performance:

(C) DISREGARD OF NONCOMPLIANCE WHICH IS OF A TECHNICAL NATURE.--For purposes of this section and section 452(a)(4), a State determined as a result of an audit--

(ii) to have submitted incomplete or unreliable data pursuant to section 454(15)(B) shall be determined to have submitted adequate data only if the Secretary determines that the extent of the incompleteness or unreliability of the data is of a technical nature which does not adversely affect the determination of the level of the State's paternity establishment percentages (as defined under section 452(g)(2)) or other performance measures that may be established by the Secretary.

The implementing regulation provides:

45 C.F.R. § 305.62 Disregard of a failure which is of a technical nature.

A State subject to a penalty under § 305.61(a)(1)(ii) or (iii) of this part may be determined, as appropriate, to have submitted adequate data . . . if the Secretary determines that the incompleteness or unreliability of the data . . . is of a technical nature which does not adversely affect . . . the determination of the level of the State's paternity establishment or other performance measures percentages.

Puerto Rico argues that ACF should have disregarded the unreliability of the FY 2001 data. Puerto Rico asserts that submission of data covering 18 months did not significantly impact its FY 2001 PEP, and that its subsequent submission in February 2002 of reliable data covering the correct time period showed that Puerto Rico attained a passing PEP of 92% for FY 2001. Puerto Rico notes that ACF, in its FY 2002 DRA report, acknowledged that the FY 2001 PEP "may not have been impacted significantly" by Puerto Rico's submission of 18 months of data. Puerto Rico Ex. 6, at 6.

Puerto Rico fails to demonstrate that its submission of data covering 18 months would not have adversely affected the determination of its PEP, as required for data unreliability to be disregarded. This is evident from the fact that calculation of the FY 2001 PEP uses data not just from FY 2001 but also from FY 2000, for which Puerto Rico's data covered 12 months. The denominator of Puerto Rico's PEP ratio for FY 2001 is the number of children born out of wedlock during FY 2000, which Puerto Rico reported at line 8 of its OCSE-157 for FY 2000, data that correctly covered a 12-month fiscal year. The numerator of the FY 2001 PEP is the number of children who have been born out of wedlock and for whom paternity has been established during FY 2001, which Puerto Rico reported at line 9 of the OCSE-157 for FY 2001, data that covered 18 months. Increasing the numerator in the calculation by six months' worth of data would generally tend to overstate the PEP significantly, and could likely result in a PEP in excess of 100%. Additionally, the 18 months of data that Puerto Rico reported for FY 2001 failed to include data for one month that Puerto Rico should have included in its FY 2001 data, (since Puerto Rico had not yet changed its fiscal year to end on June 30 rather than July 31). ⁽⁷⁾

Puerto Rico's correspondence with ACF indicates that the PEP data Puerto Rico submitted for FY 2001 yielded a PEP for that year of 93%. It is not clear how the original data and the corrected data could both have resulted in essentially the same PEP (93% and 92%). ⁽⁸⁾ Logically, reporting the number of children for whom paternity had been established in an 18 month period rather than for 12 months would have skewed the PEP upward resulting in an undeserved incentive payment. ACF thus reasonably found the 2001 data unreliable since the PEP is intended to relate to a specific year and to reflect a state's performance for that year. The data submitted by Puerto Rico would thus necessarily "adversely affect the determination of the level" of the PEP.

Moreover, Puerto Rico misconstrues the FY 2001 DRA report as meaning that its data error was not significant. Puerto Rico Ex. 6, at 6. The report presents findings related only to the unreliability of data, and does not provide PEP performance figures or assess the effect of data errors on PEP performance. The fact that the data actually reported for 18 months included data for 11 of the 12 months of FY 2001 that should have been reported does not mean that the data error itself would not have affected the PEP calculation. Puerto Rico takes out of context the report's statement that while the PEP "may not have been impacted significantly, Lines 8 and 9 represented 18 months of data and were overstated by 46 and 47 percent, respectively." Id. Because the PEP data that Puerto Rico timely reported for FY 2001 covered an 18-month period, any performance figures based on the data are inherently suspect. As ACF pointed out in its response to Puerto Rico's comments, it is the state's responsibility to submit reliable data, and not the auditor's responsibility to alter or modify the data reported, or to select only a portion to be used. Id. The penalty and incentive system at Part 305 requires states to establish their IV-D performance levels with reliable data submitted by a set time and imposes penalties for failure to do so, regardless of the level of performance the state attained. Reliable data are necessary for ACF to make incentive and penalty determinations based on data submitted by a state without having to conduct physical reviews of the underlying case records. See DAB No. 1989, at 78-79.

Puerto Rico also argues that its noncompliance should have been excused as technical in nature because of what it calls a technical flaw in the statute. Puerto Rico Reply Br. at 5. Puerto Rico refers to the automatic commencement of the corrective action year, during which a state must rectify data or performance failures that occurred during the immediately preceding year. As discussed above, ACF's November 14, 2003 letter referred to a legislative "technical fix," not passed by Congress, that would have provided states a full year to take corrective action following notice of data or performance failures. Puerto Rico Ex. 1, at 3. As an example of the relief it says it should have been granted, Puerto Rico cites ACF's decision, in December 2001, to disregard the unreliability of FY 2000 data submitted by 23 states, all of the states that submitted unreliable data for that year. Puerto Rico Reply Br. at 5. ACF announced the determination in substantively identical letters to all states from the OCSE Commissioner dated December 19 or 27, 2001. ⁽⁹⁾ Puerto Rico Ex. 2. The letters stated that the basis for that determination was that the new incentive system was being phased in during FY 2000, and that penalties based on state performance would not apply prior to state performance in FY 2001.

In making this argument, Puerto Rico also cites the legislative history of section 458 of the Act, which created the current incentive system and the IV-D performance measures. The history that Puerto Rico cites refers to a phase-in of the new incentive system, to give states time to make program adjustments and improvements necessary to increase their performance to avoid losing funds under the new system. The history also discusses the law's requirement that the Secretary report to Congress on the problems and successes of the new incentive system. House Rep. No. 105-422 (Feb. 27, 1998). Puerto Rico cites the automatic commencement of the corrective action year as one of the problems of the system, and argues that this history supports granting it relief from the penalty process.

As we found in DAB No. 1989, the determination to disregard the unreliability of data for FY 2000 was based on particular circumstances that did not apply in subsequent years. Since penalties for IV-D performance were not being imposed for years prior to FY 2001, ACF had determined that the identified data reliability problems for FY 2000 did not affect performance measures, for purposes of any penalty that would have been based on unreliable data in FY 2000. That basis is not applicable here, where Puerto Rico asks us to excuse the unreliability of its FY 2001 data or its deficient PEP performance for FY 2002 because of perceived unfairness in the existing statutory scheme. That Congress and ACF considered a statutory change delaying the start of the corrective action year does not mean that the "technical nature" exception in the statute is appropriate for all states that have data reliability or performance failures in the corrective action year under the current statute. The mere use of the word "technical" in connection with the proposed amendment does not evidence any connection between that proposal and the technical disregard provision, and does not provide any basis for finding that Puerto Rico's submission of unreliable FY 2001 data or its deficient PEP performance for FY 2002 were technical in nature. Accepting this argument would undercut the whole penalty scheme. Puerto Rico clearly had notice that the data it reported should be only from the relevant year and not from a longer period, so its lack of having more time for a corrective action period does not excuse its failure to timely submit data from the correct period.

Also, by its terms, the "technical nature" relief is not available for Puerto Rico's deficient PEP performance for FY 2002. Section 409(a)(8)(C) permits the Secretary to disregard as technical in nature a state's failure to substantially comply with the requirements of title IV-D of the Act, and its submission of unreliable data, but does not mention a state's failure to attain the required performance levels. The regulation tracks the statute, authorizing the disregard of data unreliability or noncompliance with IV-D requirements but not failure to attain required performance levels. 45 C.F.R. § 305.62.

Puerto Rico has failed to show that it qualifies for application of the "technical nature" provision with respect to the unreliable data that it submitted for FY 2001.

B. ACF was not required to use untimely FY 2001 data to determine that Puerto Rico met the required PEP performance level for FY 2001 and had no deficiencies in that year.

Puerto Rico also argues that ACF should have determined that Puerto Rico achieved a passing PEP score for FY 2001 based on the corrected and reliable but late data, because the statute and regulations define "reliable data" as (among other things) "the most recent data available" that are reliable. Puerto Rico's argument ignores the requirement that data be complete as well as reliable. The regulations define the terms complete and reliable data:

(i) The term reliable data, means the most recent data available which are found by the Secretary to be reliable and is a state that exists when data are sufficiently complete and error free to be convincing for their purpose and context. State data must meet a 95 percent standard of reliability effective beginning in fiscal year 2001. This is with the recognition that data may contain errors as long as they are not of a magnitude that would cause a reasonable person, aware of the errors, to doubt a finding or conclusion based on the data.
(j) The term complete data means all reporting elements from OCSE reporting forms, necessary to compute a State's performance levels, incentive base amount, and maximum incentive base amount, have been provided within timeframes established in instructions to these forms and § 305.32(f) of this part.

45 C.F.R. § 305.1 (emphasis added). Section 305.32(f) requires states to submit complete and reliable performance data for each fiscal year by December 31 following the end of the fiscal year, and states that only data submitted by that date will be used to determine the state's performance for that fiscal year. It contains no provisions for extending the deadline. The requirement that data be complete and reliable thus excludes consideration of untimely data. Enforcement of the deadline ensures timely incentive payments, which are based on the relative performances of all states and could not be determined if performances were subject to ongoing recalculations based on revised or corrected data submitted after the applicable deadline.

The fact that Puerto Rico subsequently submitted reliable data does not mean that ACF was required to disregard the unreliability of Puerto Rico's timely data, or the untimeliness of its reliable data. That rationale would require ACF to disregard any problems where accurate data are submitted after the deadline and are therefore incomplete. Granting such a broad exception for late but accurate data is inconsistent with the emphasis that the statute and regulations place on the need for the timely submission of reliable data and its importance to the operation of the incentive system. It would lessen states' incentive to submit accurate data in a timely manner.

Moreover, Puerto Rico does not explain why it could not have submitted correct, reliable FY 2001 data by the deadline for submitting data for FY 2001. In this regard, we note that on its original OCSE-157 for FY 2001, Puerto Rico reported 43,215 children born out of wedlock during the fiscal year (line 8), and 40,247 children born out of wedlock with paternity established during the fiscal year (line 9). Puerto Rico Ex. 6, at 10. The correct data for these lines, which Puerto Rico offered ACF in February 2002, were 29,570 and 27,452, respectively. Puerto Rico Exs. 3, 4. The magnitude of the difference between the two sets of numbers should have alerted Puerto Rico, at the time that it submitted its FY 2001 data, that they might not have been correct.

In the Part 305 preamble, ACF explained that states may submit reliable data beyond the deadline for a given fiscal year only for the limited purposes of calculating the following year's PEP or determining whether performance increased sufficiently in the following year. 65 Fed. Reg. 82,184. Here, ACF apparently accepted Puerto Rico's correct but late data for both of those purposes. However, ACF could reasonably decline to use Puerto Rico's corrected but untimely FY 2001 PEP data to determine that Puerto Rico passed the PEP performance level for that year and thus was not subject to a penalty. See DAB No. 1989, at 48-50.

We thus conclude that ACF was not required to use untimely FY 2001 data to determine that Puerto Rico met the required PEP performance level for FY 2001 and had no deficiencies in that year.

III. Puerto Rico had two years of failure, subjecting it to a penalty.

Puerto Rico argues that it was not subject to a penalty because it did not fail to attain the minimum PEP performance level for both FY 2001 and FY 2002. Puerto Rico argues that its corrected but untimely PEP data for FY 2001 show that it attained a passing PEP score of 92% for FY 2001, so that its deficient score for FY 2002 was only its first year of deficient performance and not the second of two consecutive years that subject a state to a penalty. Puerto Rico also argues that even if its submission of unreliable FY 2001 data prevented ACF from finding that Puerto Rico passed the PEP performance measure for that year, then its failing PEP for FY 2002 was only its first year of failing performance, and again not the second of two consecutive years that subject a state to a penalty.

In DAB No. 1989, we determined that the two consecutive years of failure that subject a state to a penalty encompassed a performance failure in one year and a data reliability failure in the other. See DAB No. 1989, at 41-45. The preamble to Part 305 confirms that a penalty may be imposed for a year of unreliable data followed by a year of failing performance on the same performance measure. The preamble states:

For example, say a State is determined to have unreliable current collection performance data for FY 2001 and the State corrects the unreliable data for FY 2001 during FY 2002. The State must still have reliable FY 2002 data and meet the current collection performance standard for FY 2002 or incur a penalty in FY 2003.

65 Fed. Reg. 82,190 (emphasis added). The preamble also provides that "[t]wo consecutive years of failure (either poor data or poor performance) in the same performance measure criterion will trigger a penalty imposition." 65 Fed. Reg. 82,192. In other words, to avoid a penalty, a state must demonstrate with reliable data that it met the required performance level. Failure to do so encompasses both failure to meet the required performance level and failure to submit reliable data needed to calculate performance.

The statements in the preamble are consistent with the requirements of the law. Section 409 imposes penalties if the Secretary determines that the state program failed to achieve the paternity establishment percentages, that the state data submitted is incomplete or unreliable or that a state failed to substantially comply with one or more of the requirements of title IV-D and "that, with respect to the succeeding fiscal year" the state failed to take sufficient corrective action to achieve the appropriate performance levels or compliance, or the data submitted by the state are incomplete or unreliable. Section 409(a)(8)(A) of the Act (emphasis added).

Above, we discussed why the corrected FY 2001 data that Puerto Rico submitted after December 31, 2001 were untimely and could not be used to determine that Puerto Rico passed the PEP performance measure for that year. ⁽¹⁰⁾ For FY 2002, Puerto Rico's PEP of 88% was below the required 90% level needed to avoid a penalty. Moreover, ACF found, and Puerto Rico did not deny, that 88% did not represent the increase of two percentage points over its FY 2001 PEP that also would have avoided a penalty. 45 C.F.R. § 305.40(a)(1), Table 4. Puerto Rico's unreliable PEP data followed by its failure to attain the required PEP performance level subjected it to a penalty. To find otherwise would undercut the system of incentives and penalties in which states must demonstrate that they have met performance standards with reliable data.

Conclusion

For the reasons explained in our decision, we sustain the penalty in full.

Judith A. Ballard

Cecilia Sparks Ford

Donald F. Garrett
Presiding Board Member

1. Penalties for those other violations may be combined with IV-D penalties to increase the total amount of the reduction in a state's TANF funding. Those other penalty provisions are not at issue here.

2. The November 14, 2003 letter stated that the penalty was $669,295. Puerto Rico Ex. 1. However, that amount was reduced to $592,365 in a letter from the ACF Deputy Assistant Secretary for Administration, dated January 7, 2004, on the basis that ACF had overstated the original penalty because Puerto Rico had not submitted a financial report for FY 2001 containing information needed to determine its SFAG. Puerto Rico Ex. 12.

3. Puerto Rico argues that the regulations are unconstitutional "[i]f it is determined that the Secretary does not have discretion to confer the same treatment regarding penalty provisions but may do so in respect to incentive provisions . . . ." Puerto Rico Reply Br. at 2, n.1.

4. While the federal fiscal year ends on September 30, ACF permits states to use their own fiscal years as long as "like" data are used from year to year. Puerto Rico Ex. 6, at 6, citing OCSE Action Transmittals AT-01-09 (June 5, 2001) and AT-99-15 (Dec. 22, 1999).

5. As noted earlier, calculation of the PEP for a given fiscal year requires data from the previous fiscal year. In the Part 305 preamble, ACF explained that states may submit reliable data beyond the deadline for a given fiscal year for two limited purposes, but not to pass the performance measure in the given year: to determine whether the following year's performance increased sufficiently to earn an incentive, and to calculate the following year's PEP, which requires information on the number of children born out of wedlock during or as of the end of the given year. 65 Fed. Reg. 82,184.

6. FY 2000 data needed to calculate Puerto Rico's PEP for FY 2001 are not in the record. ACF did not dispute that Puerto Rico's FY 2001 PEP, based on the correct but late FY 2001 data, was 92%.

7. ACF's DRA report on Puerto Rico's FY 2001 data indicates that Puerto Rico reported PEP data for FY 2000 based on a fiscal year ending July 31. Puerto Rico Ex. 6, at 5. In correspondence to ACF in April 2002, Puerto Rico reported that its fiscal year ends on June 30, and took issue with being locked into reporting data based instead on a fiscal year ending July 31. Puerto Rico Ex. 11. The FY 2001 DRA report noted Puerto Rico's comments, cited policy instructions allowing states to use their own fiscal years as long as "like" data are used from year to year, and stated that OCSE permits states to amend their reporting periods, as long as they provide comparable data for prior periods. Puerto Rico Ex. 6, at 6, citing OCSE Action Transmittals AT-01-09 (June 5, 2001) and AT-99-15 (Dec. 22, 1999). Puerto Rico subsequently changed its PEP reporting period to the fiscal year ending June 30. Puerto Rico Ex. 7, at 2 (draft DRA report on Puerto Rico's revised FY 2001 PEP data, dated August 1, 2003). This change in reporting year does not affect this dispute, however.

8. In its letter to ACF offering revised FY 2001 PEP data in February 2002, after the deadline for submitting FY 2001 data, Puerto Rico stated that "information that was included in the original OCSE-157 report was found to be accurate and reliable for the year 2001; in fact, the corrected report will not have the effect of altering the [PEP], which 93% (sic), one of the highest in the United States; . . . ." Puerto Rico Ex. 4. It is not clear whether Puerto Rico was asserting that the 93% PEP derived from the 18 months of data it submitted on its original OCSE-157, or from the revised, correct data it submitted later. In its appeal, Puerto Rico asserts that the corrected data covering 12 months yielded a FY 2001 PEP of 92%, which ACF does not dispute.

9. The Assistant Secretary for Children and Families (and thus ACF) has been delegated the Secretary's authority to administer the TANF and child support enforcement programs at titles IV-A and IV-D of the Act. 62 Fed. Reg. 52,133 (Oct. 6, 1997); 56 Fed. Reg. 42,332, 42,350 (Aug. 27, 1991). Thus, we refer to ACF as sharing the Secretary's authority to determine that data unreliability is of a technical nature.

10. As we noted earlier, states may submit late data where needed to determine the following year's performance, by the deadline for submitting data for the following year. 65 Fed. Reg. 82,184. ACF apparently used the revised but late FY 2001 data from Puerto Rico in December 2002 to determine that Puerto Rico's FY 2002 PEP of 88% did not increase sufficiently over its FY 2001 performance to avoid a penalty, a finding that Puerto Rico did not dispute.