California Department of Social Services, DAB No. 875 (1987)

DEPARTMENTAL GRANT APPEALS BOARD

Department of Health and Human Services

SUBJECT: California Department of Social Services

Docket Nos. 86©202 86©221 86©241 87©47
Decision No. 875

DATE: June 16, 1987

The California Department of Social Services (California)appealed four
determinations by the Family Support Administration(FSA) that California
erroneously charged the costs of certainactivities to the income
maintenance program conducted byCalifornia under Title IV©A (Aid to
Families with DependentChildren or AFDC) of the Social Security Act
(Act). FSAdisallowed claims for federal financial participation (FFP)
underTitle IV©A in these costs amounting to a total of $8,888,301 inFFP
for the period from October 1, 1983 to September 30, 1986.

The disputed amounts are based on FSA's estimate that 2.33% ofTitle IV©A
eligibility worker time was related to a section ofthe Application for
AFDC and Other Cash Aid Programs (CA 2application form) entitled "Social
Services." FSA asserted thatthese costs were incurred in connection with
the provision of asocial service described in section 2002(a)(l) of the
Act (TitleXX), and that FFP was expressly precluded for such costs
underthe Title IV©A program.

For the reasons discussed below, we reverse the disallowance.
Weconclude that the activities involved in completing this sectionof the
CA 2 application form do not qualify as social servicesdescribed in
Title XX and merely serve to inform AFDC applicantsof services for which
they would be eligible, in compliance withthe AFDC statute and
regulations. Our decision is based on thereasonableness of California's
interpretation of the statutorydefinition of social services as applied
to the particularcircumstances of this case and the absence of any FSA
directivein regulations or policy guidance documents giving
Californianotice of a contrary interpretation.

”General Background•

Title IV©A of the Act provides for grants to states for aid tofamilies
with dependent children (AFDC). Until 1975, Title IV©Aincluded both
income maintenance and social service components. Effective October 1,
1975, Congress established a new Title XX ofthe Act to finance social
services for low©income children andfamilies, including families
receiving AFDC. Social ServicesAmendments of 1974, Pub. L. 93©647, 88
Stat. 2337 (1975). At thesame time as it created Title XX, Congress
repealed most of theÜj

Public Law 93©647 also contained a provision amending section403(a)(3)
of Title IV©A. As amended, section 403(a)(3) providedfor FFP in Title
IV©A administrative costs with the exceptionthat:

Ì .ÌÌ..Ìno payment shall be made with respect to amountsexpended in
connection with the provision of anyservice described in section 2002(a)
of this Act [TitleXX] . . .#/Þ.JÞ

The Board has found that this provision precludes payment of FFPunder
Title IV©A for Title IV©A administrative costs which arealso within the
definition of a social service under section2002(a) in Title XX. ”See•
Joint Consideration: Reimbursement ofFoster Care Services, Decision No.
337, June 30, 1982(prohibition not limited to traditional "social
services" and mayinclude services independently required under Title
IV©A), ”aff'd•,”Oregon v.• ”Heckler•, 651 F. Supp. 6 (D. Or. 1984); New
York StateDepartment of Social Services, Decision No. 449, July 29,
1983,”aff'd•, ###©###”kStateD•#####”ment of Social• ”Services v. Bowen•,
Civ.Action No. 84©3620 (D. D.C. Nov. 21, 1986). ”2•/ ”
•

Certain exceptions to this clause, not relevant to thiscase,
followed.

California argued that these cases were not applicable##s#nce
the foster care program, with which the cases weredirectly
concerned, was subsequently restructured by statute. Wereject
those arguments because California presented no reason whythe
principles involved would not be applicable to the basicTitle
IV©A program which has not been restructured.

The preclusion in section 403(a)(3) for FFP under Title IV©A
forexpenditures in connection with Title XX services is not
merelydesigned to prohibit duplicative claims submitted to bothprograms.
FFP in Title XX expenditures is capped at a maximumlevel for each state
and, thus, expenditures for Title XXservices are eligible for FFP only
if the cap has not beenreached. This provision was intended by Congress
to contain thecosts of social services (caps had also been in effect for
manysocial service programs when the programs were part of Title IVªA).
”See• Decision No. 449, pp. 9©10. Section 403(a) preventsstates from
avoiding the cap by shifting claims for socialservices to the uncapped
Title IV©A program. ”Id•.

Section 2002(a)(l) of the Act defines social services within theambit of
Title XX as services directed at the goals of Title XX. The section
contains a list of examples of Title XX services,including "information,
referral, and counseling services." Thereare no current regulations
which clarify the statutoryÜj

Ì .Ìinformation about services provided under Title XX andrelated
service programs, brief assessment . . . tofacilitate appropriate
referral, and referral to and followªup with those community resources
which provide or makeavailable such services . . . only when provided by
anagency that has information and referral as a specificrecognized
function and that has a staff with identifiabletasks relating to
information andÞ.JÞ referral. _3/

” •

”3•/ This regulation was originally codified at 45 CFR 228.64;later the
regulation was shifted to 45 CFR 1396.64. 45 Fed. Reg.56682 (Aug. 25,
1980).

”Case Background•

The disputed costs are for AFDC eligibility worker time spentasking the
following questions which appear at the end of the CA2 application form,
after the signature of the applicant, in abox entitled "Social
Services":

Ì .ÌThe following services are free of charge, if you areeligible for
cash aid. Your answers to these questions willnot affect your
eligibility.Þ.JÞ

A.Ì .ÌRegular check©ups to help protect your
family'shealth are available upon request through theChild Health and
Disability Prevention Program(CHDP) for eligible members of your family
underage 21.Þ.JÞ

1.Ì .ÌDo you want more information about
CHDPservices?Þ.JÞ

2.Ì .ÌDo you want CHDP medical or dental
services?Þ.JÞ

B.Ì .ÌDo you want to talk to a social worker or
wantinformation about services which may be availableto you or about any
of the following:Þ.JÞ Üj .ÌÌ..ÌÌ..ÌDiscrimination, personal adjustment,
other livingarrangements, alcoholism, drug addiction ormental/emotional
problems, special services forblind or visually impaired children and
adults,child care, etc.?Þ.JÞ

C.Ì .ÌFamily Planning Services may be available to
helpyou voluntarily limit family size, decide when youwant to have
children and prevent unwantedpregnancies. Do you or any member of your
familywant family planning information?Þ.JÞ

Ex. Q. These questions were part of the application prior to1975, when
Title XX was enacted, and the associated costs havealways been charged
as Title IV©A administrative costs. Ex. R.,p. 2.

The eligibility worker asks each applicant the questions in PartsA, B
and C. If the applicant responds positively to Part A,concerning
medical and dental services, the

applicant is told where to get additional information andservices from
the Child Health and Disability Prevention Program(CHDP). The CHDP is
California's vehicle for fulfilling TitleXIX (Medicaid) requirements
that applicants be informed of andprovided with "early and periodic
screening, diagnostic, andtreatment services." Section 1902(a)(43) of
the Act. If theapplicant responds positively to Parts B or C, the
applicant issent to a social worker who can respond to the
applicant'srequest by determining what services are needed and
actappropriately by making a referral to either a social worker or
acommunity resource. Ex. R, p. 2. The eligibility worker mayprovide a
brochure explaining where to find out about theservice, and records the
referral in the applicant's case file. Ex. Q, p. 6; Ex. R, p. 2.#/

California claimed the costs of completing this section asadministrative
costs of the Title IV©A program. Califor¬nia citedthe regulations
governing AFDC application procedures at 45 CFR206.10(a)(2)(i), which
state that individuals must be giveninformation about coverage,
conditions of eligibility, scope ofthe program and "related services
available." Although not citedby California, section 402(a)(15) of the
Act appears toindependently require an offer of the family planning
servicesthat are the subject of Part C.

”Discussion•

1.Ì .Ì”The services qualify as Title IV©A
administrative•”act#vities•.Þ.JÞ

FSA did not deny that 45 CFR 206.10(a)(2)(i), cited byCalifornia,
created an obligation under the Title IV©A program toadvise applicants
that related medical and social serviceÜj

” •

4/ Although FSA alleged that the eligibility worker also#completes
necessary documents to refer the AFDCapplicant/recipient to the social
services unit," FSA did notexplain what it meant by this or provide any
evidence of aseparate form or documentation that was completed by
theeligibility worker. FSA Brief, p. 4.

the services themselves. #/ Thus, FSA appears to have concededthat the
costs, for at least Parts B and C, would be allowableunder Title IV©A
but for the preclusion provision in section403(a)(3).

FSA disputed, however, the connection with the Title IV©A programof Part
A of the social services section, relating to medical anddental
programs. FSA argued that, since Part A relates to aTitle XIX
(Medicaid) program service, Part A should not qualifyas a Title IV©A
activity at all. This position, however, ignoredthe regulation at 45
CFR 206.10(a)(2)(i) that required Californiato provide information about
related services as part of the AFDCapplication process. California was
complying with thatrequirement in asking the questions in the first part
even thoughCalifornia may have been independently required by Title XIX
toprovide the same information. 6/ Thus, we conclude thatcompletion of
this part quali#ies as a Title IV©A administrativeactivity.

It is of course significant that the statutory exception forsocial
services, discussed below, does not apply to Title XIXservices. The
exception precludes FFP under Title IV©A only forTitle IV©A activities
which could also be Title XX socialservices. No similar provision
applies to Title XIX (of course,California could not seek FFP under both
programs for the samecosts, but FSA did not allege any such
double©claiming). Furthermore, there is no clear financial incentive to
shift thesecosts to one program or another, since, unlike the Title
XXprogram, neither program is capped and, in California, the ratesof FFP
are generally equal. Thus, we find that Part A of thesocial services
section, like Parts B and C, qualifies as a TitleIV©A administrative
activity.

” •

5# FSA stated generally that the social services section #id not"relate
to the income maintenance functions of Title IV©A" andshould not be
considered a Title IV©A activity. FSA Brief, p. 5. But FSA showed no
reason why the activity did not fall within theÜj

Additionally, FSA cited no Medicaid regulation or policyguidance
which made the limited activities of Part A
exclusivelyreimbursable under Title XIX.

2. ”The activi•ties_____#####”:ot precluded fromreimbursement•
Ì .Ì”under Title IV©A s#nce they are not social services as•”defined in
Title XX•.Þ.JÞ

FSA argued that the costs of completing the social servicessection of
the CA 2 application form did not qualify for FFP,even if proper Title
IV©A administrative costs, because section403(a)(3) of the Act precludes
FFP for administrative costsexpended "in connection with the provision
of any servicedescribed in section 2002(a) [Title XX of the Act]."
Thedisallowance letter stated that the social services section, as
awhole, constituted an "information and referral service" underTitle XX.
Alternatively, FSA argued that, even if completion ofthe section was not
itself an information and referral service,completion of the last two
parts was provided "in connectionwith" the operation of an information
and referral service (bythe social worker to whom the applicant was
sent). FSA Brief,pp. 6©7.

California contended that completion of the social servicessection was
an integral part of the overall AFDC application anddid not amount to
the operation of an information and referralservice. California
asserted that, at most, completion of thesection could be viewed as
leading up to an information andreferral service provided by social
workers or a social servicesagency. California argued that this
activity did not constitutea Title XX social service. California Brief,
p. 10.

At the outset, we believe that FSA reasonably questioned whetherthe
costs of completing the application section should have beenclaimed as a
social service, because the title of the sectionsuggests that
characterization. But the title alone is not abasis for viewing the
completion of the section as a Title XXservice when the substance of the
activity does not fall clearlywithin the scope of the statutory
definition of Title XX socialservices. In the Title XX list of
qualifying social services,the three activities of "information,
referral, and counselingservices" are grouped together as though the
three activitiesconstitute one "social service." Thus, the statutory
languagesuggests that Congress did not intend Title XX to
includeisolated information components or referral activities which
arein fact integral to the eligibility process of other programs.

Moreover, the regulations promulgated after Title XX becameÜj

about specific services and programs available in the communityand refer
the individual to appropriate providers or serviceprograms. The
regulations state that a provider of informationand referral services
must have those tasks as specificrecognized functions, along with a
staff with identifiable tasksrelating to those functions. They also
suggest that a providermust have some specialization or expertise in
those functions.

The activity before us here is substantively different from theservice
contemplated by the Title XX regulation. The eligibilityworker merely
advises the applicant as part of the AFDCeligibility process that there
are other programs in addition toAFDC that may meet the applicant's
needs. Rather than providethe individual with specific information or a
referral to aparticular service provider that would respond to an
identifiedproblem, the eligibility worker merely directs the individual
toanother person or agency that makes the actual referral or givesthe
necessary information. At most then, the process here is astep that
precedes the actual social service of assessment,referral and provision
of information.

We have no evidence to suggest that the eligibility workers didanything
more than to read the language of the social servicessection, obtain
responses, and give to applicants who respondedpositively the name of a
social services agency that would makethe assessment and referral.
There is no evidence that theprocess was anything other than routine or
that eligibilityworkers had any training or expertise in the referral
process. If the whole application process took two hours, the
completionof the social services section, according to the FSA time
study,would take less than 3 minutes since it represented only
2.33percent of the eligibility workers' total application time.
Theactivity appears to be sufficient only to satisfy AFDCrequirements,
not to constitute an information and referralservice which would be
sufficient to qualify for FFP under TitleXX.

Obviously, the completion of Parts B and C may have some eventualimpact
on the provision of Title XX services, since someapplicants would be
sent to social workers or social servicesagencies and would receive
services under Title XX. ## But thisimpact is too attenuated to trigger

” •

7/ We have been provided with no evidence of the percentage ofapplicants
who do, in fact, eventually (continued...)

the preclusive effects of section 403(a)(3) without clearÜj

We should also note that California argued, in any event, thatPart A of
the CA 2 application form (on medical and dentalservices) was not at all
related to the Title XX program and,thus, the Title XX exception cited
as the basis for thedisallowance does not, on its face, apply to the
first section. FSA made no attempt to demonstrate how completion of that
sectionqualified as a Title XX service in response to
California'sargument.

Finally, it is significant that the circumstances in this caseare unlike
those considered in prior Board decisions cited byFSA. Those cases
involved the foster care program and the costsdisputed were directly
identifiable as social services: fostercare placement, development of
plans of care and similar servicesprovided by social workers. In those
cases, the statesthemselves conceded that the activities were within the
scope ofTitle XX social services and, in at least one instance,
hadclaimed the activities interchangeably under different programsto
maximize the FFP (precisely what Congress had intended topreclude by
enacting section the 403(a)(3) exception). ”See• NewYork,######. In
this case, California provided unre######ª#v#dence that it had always
viewed these activities as an adjunctto the Title IV©A process and had
always claimed the costs underTitle IV©A. Finally, in ”
•

7/(...continued) #eceive Title XX services as a direct result of the
completion ofthis section.

.. .

Üj .ÌÌ..Ìthe earlier cases, the Office of Human DevelopmentServices
specifically conceded that costs associatedwith the Title IV©A
eligibility determination processwould be allowable under Title IV©A.
”Id•., p. 1. Here,the activities are, by regulation, part of that
veryprocess.Þ.JÞ

”Conclusion•

Ì .ÌÌ..ÌFor the above reasons, we conclude that thedisallowances under
appeal, amounting to a total of$8,888,301, should be reversed.Þ.JÞ

Alexander G.
#er#z