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**POLICY INTERPRETATION QUESTIONS**

**PIQ-07-02**

**PIQT-07-02**

**DATE: **May 11, 2007

**TO: ** State and Tribal IV-D Directors

**FROM: ** Margot Bean Commissioner Office of Child Support Enforcement

**SUBJECT: **FFP for State Automated Systems Costs related to Service
Agreements with Tribal IV-D Programs; Submitting Tribal IV-D cases for
Federal Tax Refund Offset; and Submitting Requests to the Federal Parent
Locator Service (FPLS) in Tribal IV-D

Currently, Tribal IV-D program regulations do not allow Tribes operating
IV-D programs Federal funding to design, develop, or install automated
systems. At this time, Federal Financial Participation (FFP) is
available to Tribal IV-D programs for basic office automation and for
maintenance and operation of existing State and Tribal automated data
processing computer systems. We are in the process of developing a
Tribal systems regulation that will set forth the process and options
available to comprehensive Tribal IV-D grantees to automate the
operation of their Tribal Child Support Enforcement programs.

We have recently received questions concerning the availability of FFP
for costs incurred by a State IV-D program which enters into a service
agreement with a Tribal IV-D program for access to and use of the
State's automated system. 

The Administration's FY 2008 budget includes legislative proposals to
allow direct access to FPLS and Federal tax refund offset for Tribal
IV-D programs.  Some Tribal IV-D agencies have agreements with State
IV-D agencies for use of the State automated system and we are concerned
that the State may submit arrearages owed in a Tribal IV-D case for
Federal tax refund offset and may submit names in a Tribal IV-D case to
the FPLS. Therefore, we are issuing this policy clarification to ensure
current Federal requirements for access to Federal tax refund offset and
FPLS are met.

**QUESTION 1:** What State systems expenditures associated with a Tribal
IV-D program using the State's automated system are eligible for FFP?

**RESPONSE 1:** The regulations at 45 CFR 304.20 outline the
availability and rate of FFP in reasonable and necessary State IV-D
program costs. The rules at §304.20(b) allow FFP in costs for services
and activities pursuant to the approved State plan which are determined
to be necessary expenditures properly attributable to the Child Support
Enforcement program, including systems costs. Moreover, §302.36(a)(2)
requires that a State extend the full range of services available under
its plan to all Tribal IV-D programs.  Therefore, a State may submit
maintenance and operation costs of the State's automated system
attributable to a comprehensive Tribal IV-D agency's use of the system
through the Advance Planning Document approval process. State and Tribal

IV-D agencies are reminded that Tribal IV-D programs are subject to the
same safeguarding rules that apply to the State IV-D programs if they
use the State's automated system.

**QUESTION 2:** May a State claim FFP for costs to modify its system to
meet the needs of a Tribal IV-D program?

**RESPONSE 2:** A State may not claim FFP for costs to modify and
enhance the State's system to meet the needs of a Tribal IV-D
program. Section 454A of the Social Security Act (the Act) mandates that
a State have in effect a "single statewide" system. The Act does not
authorize FFP to design, develop or install, or operate multiple IV-D
systems. Further, the regulations at 45 CFR 307.15 require that the
Advance Planning Document submitted by a State for funding represent the
sole system effort being undertaken by the State.

In determining whether an expenditure related to providing Tribal IV-D
access is "minor" enough to meet the definition of Maintenance and
Operation as opposed to system development or modification, the IV-D
agencies are directed to the definition of Maintenance and Operation
specified in OCSE AT-06-03 issued to States on August 11, 2006. While
OCSE does not have a specific dollar threshold for determining cost
reasonableness, OCSE will apply the OMB Circular A-87 rules on a
case-by-case basis when considering a State's request for costs related
to the use and minor modification of the State's automated CSE system
under an intergovernmental agreement.

**QUESTION 3:** May a State and Tribal IV-D program enter into a service
agreement under which the Tribal IV-D program reimburses the State for
the costs associated with the Tribe's use of the State's automated
system and the Tribal IV-D program submits such costs as part of its
program expenditures? 

**RESPONSE 3:** Yes, if the costs for allowing the Tribe to use the
State's automated system are reasonable. The State must report the
Tribal payments to the State as program income. A service agreement
between a State and a Tribal IV-D program may not include costs to
Tribal IV-D programs relating to the modification and enhancement of a
State's automated system to meet the needs of a Tribal IV-D program,
unless OCSE has determined, as outlined above, that the cost of a minor
modification meets the cost reasonableness standards of OMB Circular
A-87.

**QUESTION 4:** What costs may a start-up Tribal grantee claim in order
to prepare for automation?

**RESPONSE 4:** Start-up Tribal grantees may seek FFP for pre-conversion
and data clean-up activities. Automation is not a requirement for a
comprehensive Tribal IV-D program. The Tribal program may have a process
that is manual, or uses basic office automation (word processing,
databases, spreadsheets, email) to meet the initial requirements for a
comprehensive Tribal IV-D program. Once the grant application for a
comprehensive Tribal IV-D program is approved, the Tribe may request FFP
for systems-related costs permitted under the Tribal IV-D
regulations. For example, it would be an acceptable FFP activity to
review hard copy files to ensure that mandatory and/or optional data
elements on a case are complete and ready to be entered into a Tribal or
Statewide CSE system in anticipation of the comprehensive program grant
being approved.

**QUESTION 5:** What are the circumstances under which a State IV-D
agency may submit arrearages owed in a Tribal IV-D case for Federal tax
refund offset?

**RESPONSE 5:** A State may submit arrearages owed in Tribal IV-D cases
for Federal tax refund offset if the following conditions are met:

1\. The approved Tribal IV-D plan or plan amendment indicates that the
Tribe has entered into a cooperative agreement with the State under
§309.60(b) and (c) for the State to submit arrearages owed in Tribal
IV-D cases for Federal tax refund offset. The Tribe must submit as part
of its Tribal IV-D plan or plan amendment copies of any such agreement.

The regulations governing Tribal IV-D programs at §309.35(d) require
that after approval of the original Tribal IV-D program application, all
relevant changes required by new Federal statutes, rules, regulations,
and Department interpretations are required to be submitted so that the
Secretary may determine whether the plan continues to meet Federal
requirements and policies.

2\. The cooperative agreement between the Tribe and State includes a
statement that the Tribal IV-D program will comply with all safeguarding
requirements with respect to Federal tax refund offset in accordance
with §309.80, section 454(26) of the Act and the Internal Revenue Code
26 USC 6103, which prohibits the release of IRS information outside of
the IV-D program.

3\. The Tribal IV-D plan provides evidence that the Tribe's application
for IV-D services under §309.65(a)(2) includes a statement that the
applicant is applying for State IV-D services for purposes of submitting
arrearages for Federal tax refund offset. 

**QUESTION 6:**  What are the responsibilities of States and Tribes if
the above conditions are not currently being met?

**RESPONSE 6:** If there are instances in which a State is submitting
arrearages owed in a Tribal IV-D case for Federal tax refund offset
which do not meet the conditions set forth in Response 5, a State may
not submit arrearages owed in Tribal IV-D cases for Federal tax refund
offset. This applies to both new and existing cases.

A Tribal IV-D program must amend its plan to indicate that the Tribe has
entered into a cooperative agreement as outlined above for the State to
submit arrearages owed in Tribal IV-D cases and include a statement that
the Tribal IV-D program will comply with all safeguarding
requirements. The Tribal IV-D plan must also provide evidence that the
application for IV-D services under §309.65(a)(2) includes a statement
that the applicant is applying for State IV-D services for purposes of
submitting arrearages for Federal tax refund offset. 

**QUESTION 7:**  May a State send the names of individuals that a Tribal
IV-D program is attempting to locate to the FPLS for locate purposes and
share that information with the Tribal IV-D program?

**RESPONSE 7:** Section 453(c)(3) of the Act defines an "authorized
person" who may submit a request to the FPLS to include "an agent of a
child ...." A Tribal IV-D agency would qualify as an "agent of a child"
for cases being handled by the Tribal IV-D agency for purposes of
submitting a request to the FPLS. The State will submit the location
request to the FPLS through the State Parent Locator Service as a
request from "an agent of a child." The State IV-D agency should code
these locate requests as "LC" for "Locate Only."

As provided in AT-02-04, the following information will be made
available in response to the request: SSN, address, wage and
unemployment compensation amounts, employment benefits (e.g., health
care coverage) and the employer's name, address, and employer
identification number. Asset information from a source other than the
IRS may also be provided, if available. The information made available
as a result of the request is subject to use and disclosure by the
Tribal IV-D agency only for child support enforcement purposes.

Inquiries should be directed to the appropriate Regional Office.

cc: ACF/OCSE Regional Program Managers