B-199795(1), OM, AUG 8, 1980

B-199795(1): Aug 8, 1980

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NYRO - SUSAN TSCHIRHART: THIS IS IN RESPONSE TO YOUR QUESTION REGARDING NEW YORK STATE'S CLAIM FOR REIMBURSEMENT FOR ADMINISTRATIVE COSTS INCURRED BY PRIVATE AGENCIES IN PLACING AID TO FAMILIES WITH DEPENDENT CHILDREN-FOSTER CARE (AFDC-FC) CHILDREN IN FOSTER FAMILY HOMES OR CHILDCARE INSTITUTIONS. THE DEPARTMENT OF HEALTH AND HUMAN SERVICES (HHS) TAKES THE POSITION THAT SUCH COSTS ARE NOT REIMBURSABLE UNDER TITLE IV-A OF THE SOCIAL SECURITY ACT. FEDERAL FINANCIAL PARTICIPATION FOR ADMINISTERING THE STATE AFDC PLAN IS AVAILABLE UNDER SEC. 403(A)(3) OF THE SOCIAL SECURITY ACT. FEDERAL MATCHING IS PROHIBITED FOR ADMINISTRATIVE COSTS - "WITH RESPECT TO AMOUNTS EXPENDED IN CONNECTION WITH THE PROVISION OF ANY SERVICE DESCRIBED IN SEC. 2002(A)(1) OF THIS ACT OTHER THAN SERVICES THE PROVISION OF WHICH IS REQUIRED BY SECTION 402(A)(19) TO BE INCLUDED IN THE PLAN OF THE STATE ***.".

B-199795(1), OM, AUG 8, 1980

SUBJECT: ADMINISTRATIVE COST REIMBURSEMENT FOR PRIVATE PLACEMENT AGENCIES (FILE B-199795)

TEAM LEADER, NYRO - SUSAN TSCHIRHART:

THIS IS IN RESPONSE TO YOUR QUESTION REGARDING NEW YORK STATE'S CLAIM FOR REIMBURSEMENT FOR ADMINISTRATIVE COSTS INCURRED BY PRIVATE AGENCIES IN PLACING AID TO FAMILIES WITH DEPENDENT CHILDREN-FOSTER CARE (AFDC-FC) CHILDREN IN FOSTER FAMILY HOMES OR CHILDCARE INSTITUTIONS. THE DEPARTMENT OF HEALTH AND HUMAN SERVICES (HHS) TAKES THE POSITION THAT SUCH COSTS ARE NOT REIMBURSABLE UNDER TITLE IV-A OF THE SOCIAL SECURITY ACT. WE AGREE WITH THE AGENCY'S POSITION.

FEDERAL FINANCIAL PARTICIPATION FOR ADMINISTERING THE STATE AFDC PLAN IS AVAILABLE UNDER SEC. 403(A)(3) OF THE SOCIAL SECURITY ACT, 42 U.S.C. SEC. 603. HOWEVER, FEDERAL MATCHING IS PROHIBITED FOR ADMINISTRATIVE COSTS -

"WITH RESPECT TO AMOUNTS EXPENDED IN CONNECTION WITH THE PROVISION OF ANY SERVICE DESCRIBED IN SEC. 2002(A)(1) OF THIS ACT OTHER THAN SERVICES THE PROVISION OF WHICH IS REQUIRED BY SECTION 402(A)(19) TO BE INCLUDED IN THE PLAN OF THE STATE ***."

THIS PROHIBITION WAS ENACTED IN 1974 (PUB. L. 93-647, SEC. 3(A)(3), 88 STAT. 2348, WHEN MOST SOCIAL SERVICES MADE AVAILABLE TO NEEDY INDIVIDUALS WERE TRANSFERRED TO TITLE XX. SECTION 2002(A)(1), 42 U.S.C. SEC. 1397AA)(1), LISTS "SERVICES FOR CHILDREN *** IN FOSTER CARE" AND THESE SERVICES ARE NOT REQUIRED BY SEC. 402(A)(19), 42 U.S.C. SEC. 602(A)(19). THEREFORE, FEDERAL MATCHING IS PROSCRIBED FOR THESE SERVICES UNDER SEC. 403(A)(3).

HOWEVER, SEC. 408(D) OF THE SOCIAL SECURITY ACT, 42 U.S.C. SEC. 608(D), PERMITS REIMBURSEMENT FOR CERTAIN ADMINISTRATIVE COSTS OF FURNISHING AFDC- FC. COSTS INCURRED BY EMPLOYEES OF THE STATE OR LOCAL PUBLIC WELFARE AGENCY IN PLACING CHILDREN IN FOSTER CARE ARE REIMBURSABLE AS PART OF THE ADMINISTRATION OF THE STATE PLAN FOR PURPOSES OF SEC. 403(A)(3). ACCORDINGLY, SEC. 408(D) PROVIDES FOR FEDERAL MATCHING IN THE LIMITED SITUATION OF PLACEMENT OF CHILDREN IN FOSTER CARE BY CERTAIN PUBLIC AGENCIES.

NEW YORK STATE IS CLAIMING REIMBURSEMENT FOR PLACEMENT COSTS INCURRED BY BOTH PUBLIC AND PRIVATE AGENCIES. ALL COSTS INCURRED BY THE PUBLIC AGENCY ARE ELIGIBLE FOR FEDERAL MATCHING ACCORDING TO SEC. 408(D). THAT SECTION MAKES NO MENTION OF FEDERAL MATCHING FOR THE SERVICES OF EMPLOYEES OF PRIVATE AGENCIES. THEREFORE, ADMINISTRATIVE EXPENSES INCURRED BY THE PRIVATE NON-PROFIT AGENCIES THAT NEW YORK STATE USES FALL WITHIN THE GENERAL PROSCRIPTION OF FFP FOR FOSTER CARE PLACEMENT, AS DESCRIBED IN SEC. 403(A)(3). FEDERAL FUNDS ARE AVAILABLE FOR THE AMOUNTS PAID TO PRIVATE AGENCIES FOR THE LIVING EXPENSES OF FOSTER CARE CHILDREN, ACCORDING TO SEC. 403(1) AND (2) OF THE SOCIAL SECURITY ACT.