On January 14, 2011, the Departmental Appeals Board (DAB) ruled on an appeal filed by the Michigan Department of Human Services, following a Title IV-E eligibility review. The primary review examined 80 cases for the period under review of April 1 through September 30, 2009. The Administration for Children and Families (ACF) determined six sample cases to be ineligible for Title IV-E funds during the period under review. A finding of six resulted in a determination by ACF that Michigan was not in substantial compliance. Michigan challenged that ruling on two sample cases – situations where the state had made an initial determination of Title IV-E eligibility, but later determined the cases ineligible. In both instances, a request for a hearing before the state agency on the ineligibility determination was filed on behalf of the child. Michigan argued that, consistent with 45 CFR 205.10 (b), each child was eligible for Title IV-E payments until a decision was made pursuant to a hearing. ACF challenged that argument, stating that this regulation does not apply to these cases.
The DAB ruled that ACF should have treated the sample cases as Title IV-E eligible and reversed the $67,264 disallowed. ACF argued throughout the case that Michigan should have stopped Title IV-E payments at the time of the determination of ineligibility, rather than continue to make federal payments. The DAB disagreed, stating that the right to a fair hearing is contingent on whether or not non-federal payments might be available for assistance payments. ACF also went to the state’s Foster Care Manual, citing that “Michigan’s hearing procedures provide that when a child is found ineligible under the Title IV-E, the notice is not given to the child or his/her foster parents but to the county court where the child is a resident.” The argument that ACF made was that the county is impacted by the ineligibility finding, not an individual, which is the focus of regulation section 205.10 (a) (4). In the same manual, the DAB cited that a “Client Notice” of denial or cancellation of IV-E is to be sent to the Juvenile Court when the court retains jurisdiction – indicating to the DAB that if there is a requirement of notice of denial or cancellation, then a fair hearing procedure must follow.
The interesting twist here is that Michigan never denied that the children were, in fact, found ineligible and did not meet Title IV-E payments. Michigan was not challenging the determination, but rather the right to continue to claim Title IV-E pending the outcome of a fair hearing that was properly filed. It will not be surprising to see new regulation and guidance come out in the Child Welfare Policy Manual, clarifying this issue. The Board was bound by the requirements of the regulation that authorizes continued federal funding payment pending a hearing decision.
About Kay Casey
Kay Casey has over 20 years of experience in federal and state child welfare policy and programs, having worked for the federal Administration for Children and Families (ACF) and the Florida Department of Children and Families prior to joining PCG. She is responsible for the review and assessment of fiscal processing systems that impact a state’s ability to identify, document, and report expenditures for federal reporting purposes accompanied with the programmatic impact on the state’s system of care.
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