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  ![](media/image1.png){width="1.1395833333333334in"   U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES\
  height="1.1430555555555555in"}                       Administration for Children and Families\
                                                       Administration on Children, Youth and Families\
                                                       Children's Bureau

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**Title IV-E Foster Care**

**Eligibility Review Guide**

**March 2006**

**Preface**

This Title IV-E Foster Care Eligibility Review Guide (Guide) provides a
consistent and uniform approach for Federal and State staff to use in
complying with requirements set forth in 42 U.S.C. §672 and 45 CFR
§1356.71. The Guide contains policy and procedural guidance on planning,
conducting, and completing a foster care eligibility review. It is
intended to complement, not supplant, applicable statutory and
regulatory provisions. In the event of conflict or inconsistency between
this Guide and the statute or regulations, the latter govern.

This Guide applies solely to the periodic title IV-E foster care
eligibility reviews. It does not apply to other types of reviews or
checks on eligibility, such as those that may be conducted by the Office
of the Inspector General or that arise out of the Administration for
Children and Families Regional Office reviews of title IV-E claims filed
by States.

**Table of Contents**

> **Page**

  ---------------- ---------------- ----------------------------- -- ------ ------------- ------------
                                                                                          

  **Chapter 1.**   **Framework for                                                        **1**
                   the Title IV-E                                                         
                   Foster Care                                                            
                   Eligibility                                                            
                   Reviews**                                                              

                                                                                          

                   Purpose of the                                                         
                   Reviews                                                                

                   Review Process                                                         

                                    Requirements Subject to                               
                                    Review                                                

                                    Sampling Guidance                                     

                                    Payment History                                       

                                    Compliance Standards                                  

                                    Improper Payments                                     

                   Steps in the                                                           
                   Review Process                                                         

                                                                                          

  **Chapter 2.**   **The Review                                                           **14**
                   Team**                                                                 

                                                                                          

                   Composition of                                                         
                   the Review Team                                                        

                   Functions of the                                                       
                   Review Team                                                            

                   Leadership of                                                          
                   the Review Team                                                        

                                                                                          

  **Chapter 3.**   **On-Site                                                              **17**
                   Reviews**                                                              

                                                                                          

                   Advance                                                                
                   Preparation for                                                        
                   the On-Site                                                            
                   Review                                                                 

                                    ACF Central Office                                    
                                    Responsibilities                                      

                                    ACF Regional Office                                   
                                    Responsibilities                                      

                                    State Agency Responsibilities                         

                   Case Selection                                                         
                   and Review                                                             

                                    Sample of Cases Reviewed                              

                                    Preparation of Case Records                           
                                    for Review                                            

                                    Use of Electronic Files for                           
                                    Review                                                

                                    On-Site Review Instrument and                         
                                    Instructions                                          

                   On-Site Review                                                         
                   Activities                                                             

                                                                                          

  **Chapter 4.**   **Eligibility                                                          **24**
                   Requirements**                                                         

                                                                                          

                   Judicial                                                               
                   Removals                                                               

                                    Contrary to the Welfare                               

                                    Reasonable Efforts                                    

                   Voluntary                                                              
                   Placements                                                             

                   Responsibility                                                         
                   for Placement                                                          
                   and Care Vested                                                        
                   With the State                                                         
                   Agency                                                                 

                   AFDC Eligibility                                                       

                                    Determination of Dependency                           

                                    Documentation for Initial                             
                                    Eligibility Determination                             

                                    Documentation for Ongoing                             
                                    AFDC Eligibility                                      
                                    (Re-determination)                                    

                                    Reconstruction of AFDC                                
                                    Eligibility                                           

                   Placement in a                                                         
                   Licensed Foster                                                        
                   Family Home or                                                         
                   Childcare                                                              
                   Institution                                                            

                   Safety                                                                 
                   Requirements for                                                       
                   Children Placed                                                        
                   in Foster Care                                                         

                                                                                          

  **Chapter 5.**   **Final Report**                                                       **43**

                                                                                          

                   Purpose of the                                                         
                   Final Report                                                           

                   Preparation of                                                         
                   the Final Report                                                       

                   Dissemination of                                                       
                   the Final Report                                                       

                                                                                          

  **Chapter 6.**   **Program                                                              **46**
                   Improvement                                                            
                   Plans**                                                                

                                                                                          

                   Criteria for                                                           
                   Developing a PIP                                                       

                   Content of the                                                         
                   PIP                                                                    

                   Preparation and                                                        
                   Approval of the                                                        
                   PIP                                                                    

                   Timeframes for                                                         
                   Implementing the                                                       
                   PIP                                                                    

                   Quarterly                                                              
                   Progress Reports                                                       

                   Technical                                                              
                   Assistance                                                             

                                                                                          

  **Glossary**                                                                            **49**

                                                                                          

  **Appendices**   I: Title IV-E                                                          **I-1**
                   Foster Care                                                            
                   Eligibility                                                            
                   On-Site Review                                                         
                   Instrument and                                                         
                   Instructions                                                           

                                                                                          

                   II: Sample State                                                       **II-1**
                   Notification                                                           
                   Letter                                                                 

                                                                                          

                   III: Materials                                                         **III-1**
                   to Read in                                                             
                   Preparation for                                                        
                   a Title IV-E                                                           
                   Foster Care\                                                           
                   Eligibility                                                            
                   Review                                                                 

                                                                                          

                   IV: Recommended                                                        **IV-1**
                   Topics for                                                             
                   Discussion by                                                          
                   the Title IV-E                                                         
                   Foster Care                                                            
                   Eligibility                                                            
                   Review Team                                                            
                   During the                                                             
                   Pre-Review                                                             
                   Conference Call                                                        
                   and Before                                                             
                   Reviewing                                                              
                   Records On-Site                                                        

                                                                                          

                   V: Suggested                                                           **V-1**
                   On-Site Quality                                                        
                   Control Tasks                                                          
                   for the                                                                
                   Administration                                                         
                   for Children and                                                       
                   Families                                                               
                   Regional Office                                                        
                   Team Leaders                                                           

                                                                                          

                   VI: Title IV-E                                                         **VI-1**
                   Foster Care                                                            
                   Eligibility                                                            
                   Reviews Table of                                                       
                   Completed Case                                                         
                   Records and                                                            
                   Description of                                                         
                   Improper                                                               
                   Payments                                                               

                                                                                          

                   VII: Title IV-E                                                        **VII-1**
                   Eligibility                                                            
                   Criteria for the                                                       
                   Foster Care                                                            
                   Maintenance                                                            
                   Payments Program                                                       

                                                                                          

                   VIII: Sample                                                           **VIII-1**
                   Transmittal                                                            
                   Letter Including                                                       
                   Notice of                                                              
                   Disallowance                                                           

                                                                                          

                   IX: Model Report                                                       **IX-1**
                   Title IV-E                                                             
                   Foster Care                                                            
                   Eligibility                                                            
                   Review                                                                 

                                                                                          

                   X: Timeframes                                                          **X-1**
                   for Title IV-E                                                         
                   Foster Care                                                            
                   Eligibility                                                            
                   Review                                                                 
                   Activities                                                             

                                                                                          

                   XI\. Title IV-E                                                        **XI-1**
                   Foster Care                                                            
                   Eligibility                                                            
                   Chart                                                                  

                                                                                          

                   XII\. Matrix of                                                        **XII-1**
                   AFDC Factors                                                           
                   Related to Title                                                       
                   IV-E Foster Care                                                       
                   Eligibility                                                            

                                                                                          

                   XIII\. Provider                                                        **XIII-1**
                   Requirements,                                                          
                   Title IV-E                                                             
                   Foster Care                                                            
                   Eligibility                                                            

                                                                                          

                   XIV\.                                                                  **XIV-1**
                   Calculation of                                                         
                   the Maintenance                                                        
                   Payment and                                                            
                   Administrative                                                         
                   Cost                                                                   
                   Disallowances                                                          
                   for the Title                                                          
                   IV-E Primary and                                                       
                   Secondary Foster                                                       
                   Care Eligibility                                                       
                   Reviews and of                                                         
                   the National                                                           
                   Foster Care                                                            
                   Error Rate for                                                         
                   the Title IV-E                                                         
                   Foster Care                                                            
                   Program                                                                

                                                                                          
  ---------------- ---------------- ----------------------------- -- ------ ------------- ------------

**Chapter 1**

**Framework for the\
Title IV-E Foster Care Eligibility Reviews**

Purpose of the Reviews

Title IV-E foster care funds enable States to provide foster care for
children who were or would have been eligible for assistance from Aid to
Families With Dependent Children (AFDC) under the State's approved title
IV-A plan (as in effect on July 16, 1996), but for their removal from
their home. The Social Security Act (the Act) includes requirements that
define the circumstances under which the State must, in accordance with
its approved title IV-E State plan, make foster care maintenance
payments \[§472(a)\] and mandate a child's placement in an approved or
licensed facility \[§472 (b) and (c)\].

The periodic title IV-E foster care eligibility reviews assist in the
validation of the accuracy of a State's claim for reimbursement of
payments made on behalf of eligible children placed in eligible homes
and institutions. The validations are made most effectively by an
examination of the case records of the child and provider and payment
documentation. Payment eligibility also is monitored and reviewed by
audits conducted by the Office of the Inspector General and the
Administration for Children and Families (ACF) Regional Office when
conducting a claims review. In conducting foster care eligibility
reviews, ACF is fulfilling its financial and programmatic stewardship
responsibilities, while also complying with statutory provisions
mandated in the Improper Payments Information Act (IPIA) of 2002. The
IPIA requires Federal agencies to manage and reduce or eliminate, where
possible, improper payments in Federal programs. Ultimately, this effort
is expected to enable the Federal Government to provide more accurate
financial assistance to States, enable programs to service additional
eligible recipients without increasing their budgets, and reduce program
costs.

The periodic eligibility reviews:

-   Help determine whether Federal funds are spent on behalf of eligible
    children, in eligible placements, and in accordance with Federal
    statute, regulation, and policy;

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-   Help identify improper payments, which consist of underpayments,
    erroneous payments, overpayments, duplicate payments, and otherwise
    ineligible program payments;

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-   Provide a link to the joint planning, technical assistance, and
    program improvement processes that exist between the ACF Regional
    Offices and the States; and

-   Provide timely and specific feedback to States that can directly
    impact the proper and efficient administration and implementation of
    their title IV-E foster care maintenance payments programs.

Review Process

The title IV-E foster care eligibility review is a collaborative effort
between the Federal and State governments and is conducted by review
teams composed of both Federal and State staff. The review is conducted
on site, typically in the State capital where the child welfare central
office is located. The State agency may negotiate an alternative
location with the ACF Regional Office, if warranted due to record access
or other logistical concerns.

The eligibility review process began with an *initial* *primary review*
of foster care cases to ensure that children for whom title IV-E foster
care maintenance payments are made meet the eligibility requirements at
§472(a) of the Act and the implementing regulations at 45 CFR §1355 and
§1356. The initial primary review was the first title IV-E foster care
eligibility review conducted in a State following the passage of the
final rule in the Federal Register on January 25, 2000, and afforded
States an opportunity to implement the various requirements in the
regulations. During the initial primary review, 80 cases were reviewed
and 8 or fewer error cases were allowed for a State to be determined to
be in substantial compliance with the eligibility requirements. If the
State was determined not to be in substantial compliance, the State was
required to develop and implement a Program Improvement Plan (PIP)
designed to correct the areas of non-compliance and a secondary review
was conducted following the completion of the implementation of the PIP.

A subsequent *primary review* must be conducted within 3 years from the
date of the initial primary review, or of the secondary review, if the
State was determined not to be in substantial compliance during the
initial primary review. During the primary review, the review team
examines 80 cases. If five or more cases are in error, the State is
determined not to be in substantial compliance and is required to
develop a PIP. Like the initial primary review, the State has a maximum
of 1 year in which to implement and complete the provisions of the PIP
unless State legislation is required. In such instances, an extension
may be granted, with the ACF and the State negotiating the terms and
length of the extension, not to exceed the last day of the first
legislative session after the projected date of the PIP completion.
States determined to be in substantial compliance based on the primary
review will be reviewed at 3-year intervals. States that are determined
not to be in substantial compliance will undergo their next primary
review 3 years from the date of the secondary review.

A *secondary review* must be conducted whenever a State is determined
not to be in substantial compliance based on the findings of a primary
review (or the initial primary review). During the secondary review, a
substantially larger number of sample cases is reviewed following full
implementation of the PIP. If a State exceeds the error threshold for
the case error rate and the dollar error rate, the State is determined
not to be in substantial compliance.

Following the evaluation of the State's performance in achieving
compliance with the eligibility requirements, *improper payments* are
identified and a *payment disallowance* is assessed for any sample case
identified as having *ineligible payments,* which are title IV-E
payments made for an unmet eligibility criterion, for a duplicate
payment, for an overpayment, or for any other unallowable program cost.
The payment disallowance includes all title IV-E foster care maintenance
payments and administrative costs associated with the ineligible payment
occurrence and covers the entire period that the ineligible payments are
made. In addition to the ineligible payments, the identification of
improper payments will include *underpayments* that are observed during
the review of a sample case. An underpayment will be considered to have
occurred when a title IV-E maintenance payment or administrative cost is
not claimed, but may be claimed, for an allowable title IV-E activity or
a period of eligibility.

*Requirements Subject to Review*

States are reviewed against the requirements of title IV-E of the Act
regarding:

-   The eligibility of the children on whose behalf foster care
    maintenance payments are made (§472(a)(1)-(4), (e), (f), and (g) of
    the Act) to include:

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-   Judicial determinations regarding "reasonable efforts" and "contrary
    to the welfare" in accordance with 45 CFR §1356.21(b) and (c),
    respectively;

-   Voluntary placement agreements in accordance with §472(e), (f),
    and (g) of the Act and 45 CFR §1356.22;

-   Responsibility for placement and care vested with the State agency
    in accordance with §472(a)(2) of the Act and 45 CFR
    §1356.71(d)(iii);

-   Placement in a licensed foster family home or childcare institution
    as defined in §472(b) and (c) of the Act and 45 CFR §1355.20(a); and

-   Eligibility for AFDC under the State plan that was in effect on July
    16, 1996, in accordance with §472(a)(4) of the Act and 45 CFR
    §1356.71(d)(1)(v).

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-   Allowable payments made to foster care providers that comply with
    §471(a)(10), §471(a)(20), and §472(b) and (c) of the Act and 45 CFR
    §1356.30. During the title IV-E foster care eligibility review, the
    provider's license or approval document is examined to determine
    whether the provider is an appropriate type of foster care facility,
    the license is valid for the duration of the child's placement
    during the period under review (PUR), and the safety requirements at
    45 CFR §1356.30 are met. A provider is considered an appropriate
    type of foster care facility when the provider is a foster family
    home or childcare institution as defined in the Act at §472(b)
    and (c) and the Federal regulations at 45 CFR §1355.20(a).

    The reviewers will use the most current On-Site Review Instrument
    and Instructions (checklist) to determine compliance with the
    eligibility requirements. (See Appendix I.) The review instrument
    may be updated intermittently by the Children's Bureau and is
    available to State agencies through the ACF Regional Offices, and is
    posted on the Children's Bureau Web site.

*Sampling Guidance*

**Selecting the Sample and Oversample**

The sample of cases to be read for the review will be drawn from the
Adoption and Foster Care Analysis and Reporting System (AFCARS) data
that are transmitted by the State agency to the ACF Central Office. ACF
statistical staff will draw the sample utilizing probability sampling
methodologies such as simple random sampling to make sure that the case
record of each child in the State's title IV-E foster care maintenance
payment program will have an equal and independent chance of being
selected for inclusion in the review sample. Other probability
methodologies may be used, when necessary, to ensure that the review
sample represents to a greater degree the characteristics of the child
population that makes up the State's title IV-E foster care maintenance
payment program. For example, in selecting cases for the primary review,
the sample may be stratified to make sure the sample includes a
sufficient representation of children who receive title IV-E foster care
maintenance payments through a placement and care agreement between the
State child welfare agency and another public agency such as the State
juvenile justice agency or tribal child welfare agency.

To make sure a sufficient number of sample cases are available for
review, an oversample that consists of 10 percent or more cases will be
randomly selected in addition to the 80 sample cases that must be drawn
for the primary review or the 150 cases that must be drawn for the
secondary review.

In summary:

-   For *primary reviews*, a sample of 80 cases (plus at least a 10
    percent oversample of eight cases) will be selected from the most
    recent AFCARS data submission using a probability sampling
    methodology. An alternate data source may not be substituted for the
    AFCARS for sample selection purposes.

-   For the *secondary review*, a sample of 150 cases (plus at least a
    10 percent oversample of 15 cases) will be drawn from the most
    recent AFCARS data submission using a probability sampling
    methodology. An alternate data source may not be substituted for the
    AFCARS for sample selection purposes.

The case sample and oversample drawn for review will consist of cases of
individual children who received at least one title IV-E foster care
maintenance payment during the 6-month reporting period reflected in the
State's most recent AFCARS data submission. The AFCARS reporting period
is the PUR, which serves as a reference point for determining whether a
sample case will be considered a case in error. The "most recent AFCARS
data submission" is usually the reporting period that ends at least 3 to
6 months before the date of the on-site review. The AFCARS data are
submitted to the ACF Central Office within 45 calendar days following
the end of the reporting period and are not available for use until 30
calendar days later. Therefore, the AFCARS data submission for the
October 1 thru March 31 reporting period must be transmitted to the ACF
Central Office no later than May 15 and for the April 1 thru September
30 reporting period must be transmitted no later than November 14.

The review sample is drawn and provided to the State agency a minimum of
60 calendar days before the on-site review. The ACF Regional Office may
negotiate with the State agency to obtain a case sample that is drawn
closer to the scheduled date of the on-site review, but under no
circumstance will the review sample be drawn later than 4 weeks before
the on-site review. In this instance, the ACF Regional Office should
consult with the ACF statistician or team leader for eligibility
monitoring before approving the State agency's request to draw a sample
that is closer to the begin date of the on-site review.

The validity of the sample and oversample depends on the accuracy with
which the State agency completes the AFCARS data element #59, Title IV-E
Foster Care. The AFCARS data element #59 inquires whether or not title
IV-E foster care maintenance payments are being paid on behalf of a
child in foster care. If title IV-E foster care maintenance payments are
being paid on behalf of the child, the data element should be coded "1."
If title IV-E foster care maintenance payments are not being paid on
behalf of the child, the data element should be coded "0."

The sampling frame will consist of all cases (children) with a "1" coded
in AFCARS data element #59 for the PUR. It is critical, therefore, that
State agencies report data element #59 accurately.

**Verifying the Sample**

The State agency must verify, before the review is conducted, that each
child coded as a "1" in data element #59 received a title IV-E foster
care maintenance payment during the PUR. If a child did not receive a
title IV-E foster care maintenance payment during the PUR, the child's
case cannot be included in the sample. This also is true if a child's
case is closed before the PUR and a payment for that case is made during
the PUR. In addition, if the State agency determined that title IV-E
foster care maintenance payments for a child were claimed improperly
during the PUR, the child's case must be excluded from the sample of
cases to be drawn if all title IV-E payments made on behalf of the child
during the PUR are rescinded before the sample being provided to the
State agency. Payments are "rescinded" if any adjusting claim submitted
by the State agency to reflect these payments is received by the ACF
Regional Office before the sample is provided to the State agency.

If a child's title IV-E eligibility is affected by a State's
participation in a federally approved title IV-E waiver demonstration
project, the child's case should be eliminated from the sample as well.
Before the on-site review, the State agency must provide the ACF
Regional Office with a list of all cases eliminated from the sample and
the supporting documentation to substantiate the case elimination. The
ACF Regional Office must verify the accuracy of the information included
on the list and determine the appropriateness of eliminating the case
from the review sample.

**Using the Oversample**

When it is established that a case is incorrectly coded with a "1" in
data element #59, the case may be replaced with a case from the
oversample, under special circumstances. However, sample cases must not
be replaced with an oversample case because of difficulties in
performing the review or because of problems in obtaining the necessary
information about the case. If the case file or information documenting
the child's or provider's eligibility cannot be located, that case will
be considered to be in error and a disallowance will be taken. An
oversample case cannot be used as a substitute for a closed adoption
case (Child Welfare Policy Manual Section 5.2)[^1] or for a sample case
in which the State agency retained placement and care responsibility of
a child the State agency placed with an out-of-state foster care
provider. Therefore, cases from the oversample will be substituted and
reviewed for a sample case only when the case is included in the sample
erroneously.

> Some examples of sample cases included erroneously that may be
> substituted with oversample cases are the following:

-   There has been no title IV-E foster care maintenance payment made
    for the case during the PUR.

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-   Compliance with the title IV-E eligibility requirements is excluded
    under a federally approved title IV-E waiver demonstration project.

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-   Documentation verifies that the title IV-E payment is made in error
    and subsequently rescinded before the eligibility review sample is
    transmitted to the State agency.

Any instructions to the State agency by the ACF Central Office
statistician regarding sampling and oversampling or special sampling
requirements will be provided in writing, either electronically or in
hard copy. The ACF Regional Office should receive copies of all
correspondence related to sampling and participate in all necessary
conference calls between the ACF Central Office statistician and the
State agency staff.

*Payment History*

For each of the sample and oversample case records, the State agency
must provide the ACF Regional Office with the *complete payment history*
before the on-site review \[45 CFR 1356.71(b)(2)\]. The complete payment
history consists of all foster care payments, including title IV-E
maintenance payments and administrative costs, claimed for the *most
recent foster care episode*. The most recent foster care episode refers
to the period that begins with the date of the child's last removal from
the home and placement in foster care before the end of the PUR and
continues to the child's discharge from foster care for such removal. If
a child has multiple entries into foster care during the PUR, the
child's title IV-E eligibility is examined for each foster care entry
during the PUR. If a child has remained in foster care since the
original removal from the home, the duration of this foster care event
is considered the most recent episode.

The ACF Regional Office will review the payment history to make a
preliminary assessment of the accuracy of the payment profile and to
determine whether a case should be removed from the review sample. While
on site, the State agency must provide an *updated payment history* for
each sample and oversample case record to help identify payments claimed
between the time the sample is drawn and the on-site review. The updated
payment history must include all title IV-E maintenance payments and
administrative costs that are made before the beginning of the on-site
review and continuing through the end of the service month that is
before the month in which the on-site review will be conducted.

All payments in the payment history should include the following:

-   the invoice number or other identifier,

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-   the date of the invoice,

-   the amount paid and service period covered,

-   the activity or service paid and funding source,

-   the date of payment,

-   the date of payment adjustment or reversal and period covered,

-   the child's name and case number, and

-   the provider's name and number.

The ACF Regional Office must retain all documentation provided by the
State agency for calculating maintenance and administrative cost
disallowances. This includes the complete payment history for all sample
cases including those sample cases in which a disallowance is not
assessed. Retention of the material is necessary to calculate the
State-by-State and national payment error rates for the title IV-E
foster care program in order to comply with the IPIA.

*Compliance Standards*

Compliance is based on the number of cases or amount of payments (when
applicable), that are found to be *in error* during an eligibility
review. A sample case is determined to be in error when a review of the
case record indicates that a title IV-E eligibility criterion is not met
at the time of the child's removal from home, or any time during the
PUR, and a title IV-E maintenance payment or administrative cost is made
for the ineligible period. An eligibility criterion that must be
satisfied at removal, such as "contrary to the welfare" or "reasonable
efforts to prevent removal" that is not met timely will render the child
ineligible for the entire foster care episode. When the previously
claimed title IV-E payment is rescinded in either situation, the case is
in error if the ineligible payment is not rescinded before the State
agency receives the case sample, as verified by the payment history and
the receipt of a payment adjustment on a Form ACF-IV-E-1 by the ACF
Regional Office.

**Substantial Compliance.** Substantial compliance means that the case
error threshold is not exceeded. For primary reviews held subsequent to
the initial primary review, the total number of error cases must be four
or fewer. (For the initial primary review, the total number of error
cases must have been eight or fewer). For the secondary review,
substantial compliance means that either the case error rate or dollar
error rate is 10 percent or less.

**Noncompliance.** Noncompliance means not in substantial compliance.
For primary reviews held subsequent to the initial primary review, if
five or more cases are determined to be in error, the State is not in
substantial compliance. (For the initial primary review, nine or more
sample cases meant the State was noncompliant). For secondary reviews,
noncompliance means both the case error rate and the dollar error rate
exceed 10 percent.

*Improper Payments*

**Disallowing Ineligible Payments**

Disallowance of ineligible payments refers to the amount of Federal
funds to be recovered by the ACF and is determined by the extent to
which a State is not in substantial compliance with the eligibility
provisions of title IV-E or applicable regulations in 45 CFR Parts 1355
and 1356. A payment disallowance is assessed whenever a title IV-E
eligibility criterion is not met and title IV-E funds are paid, or a
title IV-E payment is made for an unallowable activity or cost. The
payment disallowance includes all unallowable title IV-E foster care
maintenance payments and related administrative costs[^2] of the error
cases and non-error cases that occurred during the foster care placement
episode, including ineligible periods that occurred in each foster care
entry during the PUR.

A case is determined to be in error and a payment disallowance is
assessed when a review of the sample case record indicates that a title
IV-E payment for a maintenance or administrative cost is made during the
PUR on behalf of a child determined not to meet the criteria for title
IV-E eligibility, including ineligible periods that occurred in each
foster care entry during the PUR.

A payment disallowance is assessed for a non-error case when a review of
the sample case record indicates that a title IV-E payment for a
maintenance or administrative cost is made solely outside the PUR on
behalf of a child determined not to meet the criteria for title\
IV-E eligibility.

For States that are found to be in substantial compliance following
either a primary or secondary review, a disallowance will be assessed on
the basis of maintenance payments and administrative costs associated
with error cases and non-error cases for all title IV-E payments made
during the entire period that these cases are ineligible for the title
IV-E payments. The findings and payment disallowances that pertain to
the non-error cases are not considered in the determination of the
State's substantial compliance with Federal requirements. If a child has
multiple entries into foster care during the PUR and case errors are
identified for more than one entry, the sample case is counted as one
error case in determining substantial compliance regardless of the
number of foster care entries determined to be in error during the PUR.

For States found not to be in substantial compliance during a primary
review, a disallowance will be assessed on the basis of maintenance
payments and administrative costs associated with error cases and
non-error cases for all title IV-E payments made during the entire
period that these cases are ineligible for title IV-E payments. The
findings and payment disallowances that pertain to the non-error cases
are not considered in the determination of the State's substantial
compliance with Federal requirements.

For States found not to be in substantial compliance following a
secondary review, an extrapolated disallowance will be assessed for the
PUR on the basis of the universe of claims paid during the PUR. The
universe of claims paid refers to the Federal share of maintenance
payments and administrative costs expended and claimed by the State
agency for the period of time that a case is ineligible. The
extrapolated disallowance is equal to the lower limit of a 90 percent
confidence interval for the population's total dollars in error for the
amount of time corresponding to the AFCARS reporting period (PUR).
Disallowance of foster care maintenance and administrative payments for
non-error cases determined to have received ineligible title IV-E
payments during the PUR are included in the computation of the
extrapolated disallowance. (These cases are excluded in the
determination of the case error rate for the secondary review). If a
child has multiple entries into foster care during the PUR and errors
are identified for more than one entry, then the amount of dollars
identified as payments being made for either (or both) of the episodes
would be included when calculating the dollar error rate. In addition to
the extrapolated disallowance, a case specific disallowance will be
assessed on the basis of maintenance payments and administrative costs
associated with error and non-error cases for ineligible payments that
occurred prior and subsequent to the PUR.

The ACF Regional Office will calculate maintenance payment and
administrative cost disallowances on an individual case basis. The ACF
Central Office statistician will calculate the extrapolated
disallowances to be taken following a secondary review, at the request
of the Regional Office staff.

The disallowances reported in the final findings of the on-site review
will consist of all ineligible maintenance payments and administrative
costs that occurred during the period of ineligibility beginning with
the first month of ineligibility and continuing through the date that is
the earlier of the end of the month that immediately precedes the month
of the on-site review or when the ineligibility ceases for the most
recent foster care episode. Any ineligible payments claimed for
non-error cases also must be included in the disallowances reported.

If an ineligible payment occurred after the on-site review, the State
agency is instructed, and expected, to remove the ineligible payments
from its financial claiming system and suspend claiming the unallowable
costs until ineligibility ceases. These post on-site review costs should
be identified separately in the final report letter to the State agency.
A summary of the disallowance of foster care maintenance and
administrative costs that differentiates the error cases, non-error
cases with ineligible payments, and extrapolations (if applicable) will
be included in the report of final findings of the eligibility review.
(See "Final Report," Chapter 5.)

Guidance on the methodology for computing payment disallowances for the
primary and secondary reviews is included in the information packet
entitled "Calculation of the Maintenance Payment and Administrative Cost
Disallowances for the Title IV-E Primary and Secondary Foster Care
Eligibility Reviews and of the National Foster Care Error Rate for the
Title IV-E Foster Care Program." (See Appendix XIV.)

**Reporting Underpayments**

The fundamental purposes of the title IV-E foster care eligibility
reviews are to determine State compliance with the Federal requirements
for title IV-E reimbursement and to systematically correct improper
payments, which include ineligible payments and underpayments. An
underpayment will be considered to have occurred when a title IV-E
maintenance payment or administrative cost is not made, but may be made,
for an allowable title IV-E activity or a period of eligibility. If an
underpayment is observed during the review of the case record, provider
documentation or payment documentation, the information will be recorded
on the case summary log and reported in the final findings of the
eligibility review. (See "Title IV-E Foster Care Eligibility Reviews
Table of Completed Case Records and Description of Improper Payments,"
Appendix VI; and "Final Report," Chapter 5.)

Underpayments identified as the result of the review may be claimed
subsequently by a State by filing an increasing adjustment on its form
IV-E-1 in the next quarter, but no later than 2 years after the calendar
quarter in which the State agency made the expenditure (45 CFR §95.7).

Steps in the Review Process

The following general steps in the review process include both Federal
and State roles, and some joint Federal/State responsibilities. (See
"Timeframes for Title IV-E Foster Care Eligibility Review Activities,"
Appendix X.)

**1. Determine the dates for the review.** The ACF Regional Office, in
consultation with the ACF Central Office team leader for eligibility
monitoring, collaborates with the State officials to determine the dates
for the on-site review. A date for the on-site review should be
determined at least 4 to 6 calendar months before the Federal fiscal
year in which the review must be conducted. Reviews must be conducted
within the time frames specified in the regulations governing the
frequency of State reviews. \[See 45 CFR §1356.71(a)(3)\]. The State
agency must be given written confirmation of the review date within 120
calendar days before the scheduled date of the on-site review. (See
"Sample State Notification Letter," Appendix II.)

**2. Identify the review team.** This involves identifying Federal and
State members of the review team. The State agency determines which
State staff will participate on the review team. The ACF Regional Office
determines which Federal Regional Office staff will participate on the
review team. At least one ACF Regional Office program specialist and
fiscal specialist and ACF Central Office representative will participate
on the review team. (See "The Review Team," Chapter 2.)

**3. Select the sample.** On the basis of the review to be conducted
(that is, either primary or secondary), 80 or 150 case records (plus at
least a 10 percent oversample) are selected by the ACF Central Office
from the State's most recent AFCARS submission. The ACF Central Office
statistician works directly with the State agency to determine the
sample. The sample is drawn at least 60 calendar days before the on-site
review.

**4. Arrange the on-site review logistics.** The ACF Regional Office, in
collaboration with the State agency, plans logistical arrangements for
the review, including hotel accommodations and transportation for review
team members and space for meetings and review activities. One large
room is preferable for the on-site review to enable Team Leaders to
provide technical assistance to reviewers, thereby increasing
consistency in the review process and findings.

**5. Organize sample cases for review.** Before the on-site review, the
State agency assembles the sample cases in accordance with the list of
random numbers provided by the ACF Central Office statistician. Both the
ACF Central and Regional Offices will work with the State agency to
resolve issues regarding the selection and preparation of cases before
the on-site review. The tagging, labeling, or segregating of sample case
documents to identify specific material pertaining to the PUR or on-site
review is not encouraged or recommended. Nor is it recommended that
separate case folders be established primarily for the on-site review.
The complete case record under review must be accessible on site to help
resolve issues pertaining to case-specific eligibility that may arise
during the on-site review. This includes the records pertaining to
eligibility, child welfare services, and provider licensure.

**6. Conduct pre-review conference call.** At least 45 calendar days
before the beginning of the on-site review, the ACF Regional Office
arranges and leads a telephone conference call with the State agency and
the ACF Central Office representative assigned to the review. The
purpose of the conference call is to initiate discussions pertaining to
relevant State policies and practices and to discuss the on-site review
logistics and schedule. Policy and reference material submitted by the
State agency should be reviewed by the ACF representatives before this
conference call. (See "Materials to Read in Preparation for a Title IV-E
Foster Care Eligibility Review," Appendix III; and "Recommended Topics
for Discussion During the Pre-Review Conference Call and Before
Reviewing Records On-Site," Appendix IV.) Additional conference calls
may be scheduled as needed.

**7. Conduct entrance conference.** An entrance conference on the first
day of the on-site review will be convened with the review team and
State officials identified by the State agency. Representatives from the
State's Court Improvement Program, licensing agency, eligibility
program, and foster care program should be invited to attend the
conference. The ACF Regional Office, in collaboration with the ACF
Central Office, will provide an overview of the eligibility review
process, including the purpose and scope; Federal/State partnership;
standards of substantial compliance; and agenda for the review week**.**
This activity usually requires approximately one hour.

**8. Provide orientation and/or training for review team members.**
Typically, this is provided on site by the ACF Regional Office Review
Team Leader. The ACF Central Office representative will assist in
providing the on-site training to reviewers when necessary. The training
will consist of a focused discussion of the On-Site Review Instrument
and Instructions and will be supplemented with pertinent State laws and
policies on eligibility. (See "On-Site Review Instrument and
Instructions," Appendix I; "Materials to Read in Preparation for a Title
IV-E Foster Care Eligibility Review," Appendix III; and "Recommended
Topics for Discussion by the Title IV-E Foster Care Eligibility Review
Team During the Pre-Review Conference Call and Before Reviewing Records
On-Site," Appendix IV.)

**9. Conduct the on-site review in the State.** The on-site review is
conducted in the State capital or other location as negotiated between
the ACF Regional Office and the State agency. The review is completed
within 5 working days by the Federal and State review team. The case
record, provider documentation and payment documentation tied to the
sample cases are reviewed by the team to verify title IV-E funds are
paid for eligible children and their foster care providers; to identify
any erroneous payments, including duplicate payments and overpayments;
and to provide technical assistance to help improve the State's foster
care maintenance payment program. The review team also will examine the
case record, provider documentation, and payment documentation of the
sample cases to identify and record underpayments to assist the State
agency in accurately claiming title IV-E funds.

> A sample case in which eligibility is in question because State agency
> documentation is insufficient or lacking during the on-site review may
> be assigned a preliminary finding of undetermined at the exit
> conference*.* See the below discussion topic "Complete and disseminate
> the final report" for further information on resolving a sample case
> finding of undetermined.

**10. Conduct exit conference.** An exit conference at the conclusion of
the on-site review will be held with the review team and State officials
identified by the State agency. The representatives from the State
agency should include the child welfare director and senior management
staff. The ACF Regional Office Review Team Leader will provide a summary
of the review week and tentative findings, including determination of
substantial compliance, estimated disallowances, error case findings,
estimated underpayments and other eligibility issues; provide
observations about the State's foster care maintenance payment program
focusing on strengths, areas needing improvement and technical
assistance for program enhancements; and identify the next steps in the
review process.

**11. Complete and disseminate the final report.** The ACF Regional
Office Review Team Leader, in consultation with the ACF Central Office
review representative and team leader for eligibility monitoring,
prepares the final report of the review, which includes the written
determination regarding compliance. The final report must be sent to the
head of the State agency within 30 calendar days of the completion of
the on-site review. If State agency documentation is not provided on
site or within 30 calendar days of the completion of the on-site review,
the case finding is changed from an undetermined sample case to an error
sample case. The ACF Regional Office Review Team Leader can negotiate
with the State agency regarding an opportunity for submitting additional
documentation to correct an error case. However, the 30-day deadline for
completing and disseminating the report must be met and must not be
delayed pending receipt of supplemental material from the State agency.
(See "Final Report," Chapter 5.) The final report is signed and issued
by the Regional Administrator and an electronic copy is forwarded to the
ACF Central Office team leader for eligibility monitoring. The report
should be transmitted to the State by certified mail, with a request for
a return receipt.

> If additional documentation is received after the final report is
> issued, and the documentation results in a change to the review
> compliance determination or payment disallowance, written notification
> of the revised finding must be provided to the State. The notification
> is signed and issued by the Regional Administrator and an electronic
> copy is forwarded to the ACF Central Office team leader for
> eligibility monitoring.

**12. Withhold Federal funds.** The amount of funds to be disallowed
will be determined by the extent to which the State agency complies with
child or provider title IV-E eligibility provisions.

> States determined to be in substantial compliance during the primary
> or secondary review will have disallowances determined on the basis of
> individual cases reviewed and found to be in error or not in error
> with ineligible payments. The amount of the disallowance will be
> computed on the basis of title IV-E maintenance payments and
> associated administrative costs for the entire period that an
> ineligible payment was claimed in each case.

[]{.mark}

> States found to be in noncompliance during the primary review will
> have disallowances determined on the basis of individual cases
> reviewed and found to be in error or not in error with ineligible
> payments; will enter into a PIP; and will undergo a secondary review
> of 150 cases following the PIP completion. If both the case and dollar
> error rates of a secondary review exceed 10 percent, a disallowance
> that includes maintenance payments and administrative costs will be
> determined on the basis of extrapolation from the sample to the
> universe of claims paid for the duration of the AFCARS reporting
> period (the PUR). An additional disallowance is assessed for
> individual cases with periods of ineligibility that occur outside the
> PUR. If neither the case error rate nor dollar error rate exceeds 10
> percent, an extrapolated disallowance is not assessed. In this
> instance, the amount of disallowance will be computed on the basis of
> payments and administrative costs associated with error cases and
> non-error cases for the entire period these cases have been determined
> to claim ineligible payments.

**13. Conduct subsequent primary review.** Once States are determined to
be in substantial compliance following the completion of a primary or a
secondary review, subsequent primary reviews will be conducted at 3-year
intervals. The subsequent primary review must be conducted within 3
months of the anniversary date on which the previous on-site review is
completed. For example, if an on-site review was conducted during the
week of May 10, 2004, a subsequent primary review should be completed no
later than August 31, 2007.

**14. Develop the PIP.** A PIP is required whenever a State is found not
to be in substantial compliance. The State agency, in collaboration with
the ACF Regional and Central Offices, develops a PIP that covers all
areas of noncompliance and submits it to the ACF Regional Office for
approval within 90 calendar days of receiving the written notice of
noncompliance. During PIP development, the ACF Regional Office may
negotiate with the State agency regarding an opportunity to extend the
PIP deadline up to 30 calendar days for submitting supplemental
documentation to reverse a finding related to a period of ineligibility.
If additional documentation is received that results in a change to the
review compliance determination or payment disallowance, written
notification of the revised finding must be provided to the State
agency. The notification is signed and issued by the Regional
Administrator and an electronic copy is forwarded to the ACF Central
Office team leader for eligibility monitoring.

> An electronic copy of the approved PIP and the ACF notification
> letter, with the date of PIP approval by ACF, should be sent to the
> ACF Central Office team leader for eligibility monitoring. (See
> "Program Improvement Plans," Chapter 6.)
>
> If the State agency does not submit an approvable PIP or complete its
> PIP in accordance with the provisions at 45 CFR §1356.71(i)(1) and
> (2), a secondary review will be conducted as soon as feasible.

**15. Schedule the secondary review, if necessary.** At the completion
of the PIP, the State must undergo a secondary review where 150 cases
are reviewed. The sample for the secondary review is drawn from the
State's AFCARS data that represent the first full reporting period that
immediately follows the PIP completion date. The secondary review then
is conducted during the next AFCARS reporting period. This will afford
States a sufficient opportunity to make changes in accordance with the
PIP and come into substantial compliance.

> The PIP completion date is the date that is the earlier of the latest
> completion date of an action item in the ACF approved PIP or 12
> calendar months from the approved implementation date of the PIP. For
> example, if the ACF approved implementation date for the State PIP is
> May 10, 2003, and there are three action steps outlined in the PIP
> with completion dates of November 1, 2003, January 30, 2004, and April
> 30, 2004, the PIP completion date is April 30, 2004 (not May 10,
> 2004). The case sample, and oversample, will be drawn using AFCARS
> data from the October 1, 2004 - March 31, 2005, AFCARS report period.
> The secondary review will be conducted during the AFCARS report period
> of April 1, 2005 - September 30, 2005.

**Chapter 2**

**The Review Team**

Composition of the Review Team

A team of individuals, including the following members, conducts the
reviews:

-   ACF Central and Regional Office staff, and

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-   State central and local office staff.

The State agency may elect to include representatives on the State team
who are external to the State agency. The external representatives
should possess expertise that can be utilized to assist the State agency
in identifying strategies for training, technical assistance, and
program improvement, and to augment the knowledge of State agency staff
about the title IV-E eligibility requirements. Examples of external
representatives the State agency may consider including on the State
team are staff of the judicial system and tribal and public agency
representatives who entered into a title IV-E "placement and care"
agreement with the State agency.

A designated ACF Regional Office staff person leads the review team. If
possible, the review teams should always consist of an equal number of
Federal and State staff as negotiated between the ACF Regional Office
and the State agency. From 8 to 10 team members have proven to be an
ideal number for a primary review and from 12 to 14 team members for a
secondary review. At times, it may be advantageous to have a greater
number of State staff, if there is not an equal number of Federal staff.
The team also may include cross-ACF Regional or cross-State
representatives at the option of the State agency to be reviewed and at
the expense of the ACF Region or State sending staff to the review. An
ACF Regional Office or State interested in participating in another
State's review will make its requests through the ACF Regional Office
that is leading the review. The ACF Regional Office review leader will
obtain the review State's consent for cross-State or cross-Region
participation.

Functions of the Review Team

The role of the review team is to verify every element of eligibility
and decide whether the State agency made a correct determination of
eligibility for the sample cases. If an incorrect determination is made,
the review team must decide which elements of eligibility and payment
are incorrect and when the improper payment occurred. The effectiveness
of the eligibility review depends on the performance of the review team.
Information gathered by the review team is used to identify all sources
of improper payments, calculate underpayments and disallowances, and
formulate Program Improvement Plans (PIPs). Therefore, it is important
that decisions concerning the correctness of sample cases are based on
an evaluation of the available facts and are thoroughly and accurately
documented on the review instrument. Membership on the review team
involves a significant commitment of time and effort.

All team members are expected to:

-   participate in any scheduled orientation or training sessions before
    or during the review;

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-   remain present at the review site for the duration of the on-site
    review, including participation in all scheduled review activities
    from the entrance conference through the exit conference;

-   conduct all assigned activities associated with the review of case
    records, including completion of the review instrument(s);

-   participate in a debriefing before the exit conference to discuss
    the strengths and areas in need of improvement noted during the
    review;

-   remain available for consultation following the review, if needed,
    to clarify or supplement information recorded on the instruments;
    and

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-   perform quality control functions as designated by the Team Leader.

Leadership of the Review Team

The On-Site Review Team Leader will be a Federal staff member from the
ACF Regional Office who is the liaison to the State agency for the title
IV-E foster care eligibility review and who consults with the ACF
Central Office in planning the review. The Team Leader serves as the
official spokesperson for the ACF while on site and is responsible for
ensuring the completion of all tasks. The major responsibilities of the
Team Leader and any staff assisting the Team Leader include the
following:

-   serve as the liaison with State agency leadership in planning review
    activities;

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-   ensure that the sample data are sent to the State agency on a timely
    basis and that the sample and payment history are available in time
    to plan the on-site review;

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-   plan the details of the on-site review with the ACF Central Office
    and State agency representatives, including arranging conference
    calls as needed, transmitting review instructions and procedures to
    State agency liaisons, and transmitting State material to Federal
    team members;

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-   provide leadership for entrance and exit conferences at the
    beginning and conclusion of the on-site review;

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-   coordinate the development of the written notification letter
    regarding substantial compliance to the State;

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-   coordinate with the ACF Central Office the development, revision,
    circulation, and release of the final report of the review;

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-   provide guidance, as needed, to designated State agency staff toward
    development of the PIP, when a PIP is necessary;

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-   designate someone on the team to perform quality control of the
    On-Site Review Instruments, in order to identify missing information
    and inconsistencies (see "Suggested On-Site Quality Control Tasks
    for the Administration for Children and Families Regional Office
    Team Leaders," Appendix V);

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-   ensure a 10 percent, or more when necessary, quality control review
    of all cases read (see "Suggested On-Site Quality Control Tasks for
    the Administration for Children and Families Regional Office Team
    Leaders," Appendix V);

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-   participate in review activities by reading case records or
    performing quality assessments of the On-Site Review Instruments;

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-   maintain a log indicating whether a case is a sample or an
    oversample case, who read the case, the result of the case review,
    and a description of the errors, ineligible payments, and
    underpayments (for an example of a case summary log, see "Title IV-E
    Foster Care Eligibility Reviews Table of Completed Case Records and
    Description of Improper Payments," Appendix VI);

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-   maintain a list of missing documentation that the State agency could
    provide that would change a case with ineligible payments to an
    accurate case;

-   if adequate documentation is provided during the on-site review,
    apply it to the appropriate case record and adjust the On-Site
    Review Instrument accordingly, in consultation with the case
    reviewer;

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-   maintain a list of sample cases that are eliminated from the sample
    indicating the replacement oversample case and reason for
    substitution;

-   retain all documentation provided by the State agency pertaining to
    underpayments and required for calculating maintenance and
    administrative cost disallowances that includes the complete payment
    history for all sample cases including those sample cases in which a
    disallowance is not assessed (see "Calculation of the Maintenance
    Payment and Administrative Cost Disallowances for the Title IV-E
    Primary and Secondary Foster Care Eligibility Reviews and of the
    National Foster Care Error Rate for the Title IV-E Foster Care
    Program", Appendix XIV).

    **Chapter 3**

    **On-Site Reviews**

Advance Preparation for the On-Site Review

The ACF Central Office Team Leader for Eligibility Monitoring serves as
the contact point for questions and concerns before, during, and after
the on-site review.

*ACF Central Office Responsibilities*

-   Develop a national review schedule based on information provided by
    the ACF Regional Offices with input from States.

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-   Identify the ACF Central Office review team member(s) and ensure
    that each team member is available for the entire review period.

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-   Provide the ACF Central Office reviewer(s) with training and
    preparation to participate as reviewers or in a leadership role.

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-   Consult with the ACF Regional Office and the State agency on the
    sample and issues needing particular attention in the review.

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-   Provide from the AFCARS data a listing of random numbers that will
    be used to identify the sample of cases to be reviewed on site, and
    work with the ACF Regional Office to provide the sample to the State
    agency, no less than 60 calendar days before the on-site review.

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-   Coordinate, in collaboration with the ACF Regional Office, the
    transportation and lodging of the ACF Central Office team member(s).

*ACF Regional Office Responsibilities*

-   Transmit to State agency officials within 120 calendar days before
    the on-site review a written confirmation of the scheduled primary
    or secondary review and notify the State agency of material it is
    required to provide before and during the on-site review. (See
    "Sample State Notification Letter," Appendix II.)

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-   Assign an overall review team leader and identify other ACF Regional
    Office staff, including a fiscal specialist, to serve on the review
    team.

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-   Consult with the ACF Central Office and State agency staff about the
    review team size and composition, including representatives from
    other ACF Regional Offices or States, if appropriate.

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-   Coordinate with the ACF Central Office to obtain the random sample
    of foster care cases from the AFCARS to be reviewed on site.

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-   Arrange for and lead conference calls among the ACF Central and
    Regional Offices, and the State agency, as needed, to discuss issues
    that may need clarification before the on-site review, for example,
    sampling, case payment history, State policy on AFDC and title IV-E
    eligibility, and electronic files.

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-   Coordinate the orientation and training of review team members.

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-   Consult with State agency staff and the ACF Central Office to
    discuss how the State Automated Child Welfare Information System
    (SACWIS) or other electronic files support the State's eligibility
    process, and the system's role in facilitating the on-site review,
    if electronic files will be used during the on-site review. It is
    expected that the ACF Regional Office will become familiar with the
    State's automated system before the pre-review conference call and
    on-site review. (See "Electronic Files," Chapter 3.)

-   Develop the agenda for the review in collaboration with the State
    agency and lead the entrance and exit conferences.

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-   Request advance copies of information from the State agency at least
    120 calendar days before the on-site review, ensure that all Federal
    team members have copies of materials, and become familiar with
    materials, for example, policy on eligibility determinations, case
    record format, criminal background check processes, safety
    requirements, sample court orders, agreements for placement and care
    (§472(a)(2) of the Act), and payment and placement histories for the
    sample cases. The request for advance material from the State agency
    may be included in the letter that confirms the date of the on-site
    review. (See "Sample State Notification Letter," Appendix II.) The
    ACF Regional Office team leader must be familiar with the State's
    AFDC plan as it was in effect on July 16, 1996, or earlier; the
    eligibility determination process; and the most recently approved
    title IV-E plan and amendments.

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-   Designate one or more team members to perform quality control
    functions during the on-site review in order to ensure consistency,
    objectivity, and accuracy in reviewing cases.

*State Agency Responsibilities*

-   Assign a State coordinator for the review to act as the liaison with
    the ACF Regional Office in making arrangements for the review.

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-   Ensure that all State reviewers are oriented to the review process
    and are available for the entire review week.

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-   Consult with the ACF Regional Office staff on logistical
    arrangements for the review, including the identification of
    locations for entrance and exit conferences.

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-   Ensure that all sample and oversample case files are available and
    ready for review.

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-   Provide information requested by the Federal team leader at least 90
    calendar days before the on-site review, for example, policy on
    eligibility determinations, case record format, and safety
    requirements. Material may be transmitted electronically.

-   Provide payment and placement histories to the Federal team leader
    at least 60 calendar days before the on-site review. Material may be
    transmitted electronically.

Case Selection and Review

*Sample of Cases Reviewed*

The ACF Central Office statistician selects the sample of foster care
cases to be reviewed on site from the most recent AFCARS data and
transmits the sample by e-mail to the State agency. The ACF Regional
Office may request a stratified sample to ensure the sample
proportionally represents the title IV-E foster care population when the
State agency has a title IV-E agreement for placement and care with
another public agency, such as the juvenile justice agency or a
federally recognized tribal agency.

Cases selected for the sample must have a related title IV-E foster care
maintenance payment during the 6-month period under review (PUR). Before
the on-site review, the State coordinator must record the reason for
eliminating any cases from the sample of cases that will be reviewed on
site and furnish that information to the ACF Regional Office team
leader.

*Preparation of Case Records for Review*

Case records must be organized and up to date. The tagging, labeling, or
segregating of sample case documents to identify specific material
pertaining to the PUR or on-site review is not encouraged or
recommended. Nor is it recommended that separate case folders be
established primarily for the on-site review. The State agency must make
sure that all documents needed to substantiate individual child and
provider eligibility in each of the sample cases are available to the
review team. The review team will not infer or speculate about the
eligibility of a child or provider. The determination of case compliance
must be supported by the appropriate documentation, even when the State
agency placed a child with an out-of-state foster care provider and the
placing State agency retained placement and care responsibility of the
child. If acceptable documentation is not provided during the on-site
review, the case may be assigned a preliminary finding of
*undetermined.* Subsequently, if acceptable documentation is not
provided before the issuance of the final report of review findings the
case will be determined to be *in error.*

Sample case records being reviewed must be available at the review site
so that the reviewers will have access to pertinent case material.
Furthermore, the State agency must provide any records maintained
separately, i.e., provider records and/or eligibility records necessary
for the review. During the on-site review, the reviewer typically should
be able to examine the child's entire case record, family record, and
provider licensing file. This allows for a thorough review of the
child's placement beginning from entry into foster care and extending
throughout the life of the foster care episode. It also affords the
review team better insight into how the State implements the foster care
maintenance payment program, and provides the State agency an
opportunity to receive immediate training and technical assistance on
site. The ACF authority for requiring access to sample case records is
included in the Federal regulations at 45 CFR Parts 92 and 1356. The
following list provides general guidelines concerning pertinent case
documentation:

-   The child's service records, including all court orders, must be
    available for review to establish that the judicial requirements of
    "contrary to the welfare" and "reasonable efforts" are met for
    initial and ongoing eligibility concerning children who are
    judicially removed. The voluntary placement agreements and
    subsequent court orders must be available for review to establish
    that the initial and ongoing requirements are met for children who
    are removed pursuant to a voluntary placement agreement.

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-   The foster family home provider's licensure file must contain, at a
    minimum, the licensing history and a copy of the provider license,
    certificate, or letter of approval that verifies licensure status
    and type covering the entire PUR. The license/letter should include
    the provider name, provider type, starting and ending date of
    licensure, and some indication of the State agency's endorsement.
    For those States that have not opted out of the criminal records
    check requirement, documentation that a criminal records check has
    been conducted and that the prospective foster parent has not been
    convicted of any of the felonies enumerated in §471(20)(A)(i)
    and (ii) of the Act also must be provided. For those States that
    have opted out of the criminal records check requirement,
    documentation that verifies that safety considerations with respect
    to the prospective foster parent have been addressed must be
    provided.

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-   The childcare institution's licensure file must contain, at a
    minimum, the licensing history and a copy of the provider license or
    letter of approval that verifies licensure status and type covering
    the entire PUR. The license/letter should include the institution
    name, institution type, starting and ending date of licensure, and
    an indication of the State agency's endorsement. The licensing
    record must contain documentation verifying that safety
    considerations with respect to the staff of the institution have
    been addressed.

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-   For the initial AFDC determination of the child's financial need and
    deprivation, the child's case file should contain documentation
    verifying that the family's financial need is evaluated, including
    resources, and indicating the reason that the child is deprived of
    parental support or care. The manner used to substantiate that the
    school attendance criterion is satisfied for the 18-year-old youth
    should be included as well. At a minimum, the documentation should
    include an eligibility worksheet that contains the name of the
    household for which the child's AFDC eligibility is based, period of
    eligibility, eligibility decision, basis of eligibility decision,
    and an indication of the State agency's sanction of the decision,
    such as a supervisory signature on the worksheet. The eligibility
    worksheet or summary should provide a clear, evidence-based path to
    the eligibility decision. The documentation should verify whether
    the child is AFDC eligible during the month the voluntary placement
    agreement is signed or the month the removal petition is filed, or
    removal court order is granted if a petition is not filed.

-   At annual intervals, there should be documentation that the
    AFDC-related criteria are re-determined. The documentation, at a
    minimum, should include an eligibility worksheet that contains the
    eligibility decision, period of eligibility, basis of decision, and
    an indication of the State agency sanction of the eligibility
    decision, such as a supervisory signature on the worksheet. The
    eligibility worksheet or summary should provide a clear,
    evidence-based path to the eligibility decision. The documentation
    should verify whether the child is AFDC eligible during the entire
    PUR.

For further information on the review procedures pertaining to the title
IV-E foster care eligibility requirements, refer to Chapter IV of this
review guide.

*Use of Electronic Files for Review*

The State agency may use electronic files to substantiate title IV-E
eligibility. If electronic files are used on site, the State agency
should make computers and technical assistance available to the
reviewers for viewing the electronic records or obtain hard copies of
all the files or portions of the files that contain information relevant
to the review. The State agency must provide training to the review team
members to acquaint the team with the State's child welfare data system,
and provide staff to assist reviewers in obtaining documentation that
verifies the child's eligibility. The electronic files may be used to
provide evidence of: the child's removal as a result of judicial
determinations of "contrary to the welfare" and "reasonable efforts" or
via a voluntary placement agreement; responsibility for placement and
care vested with State agency; placement in a licensed foster family
home or childcare institution; eligibility for AFDC under the State plan
as it was in effect on July 16, 1996; and verification of safety
requirements for children placed in foster care.

Before the on-site review, the ACF Regional Office should request that
the State agency demonstrate how the automated system sustains the
functional aspects of the eligibility program, such as provider
licensing, AFDC eligibility determination, and court documentation.
Perusal of ACF Action Transmittal (AT) ACF-OSS-05 and consultation with
the ACF Office of State Systems will assist the ACF Regional Office in
assessing the extent to which the State's automated system will support
the on-site review and alleviate the State agency's burden to reproduce
paper documentation. The AT ACF-OSS-05, issued August 21, 1998, provides
guidance to States with State Automated Child Welfare Information
Systems concerning the level of automation required for supporting title
IV-E eligibility determination, and lists a number of approaches States
may take to automate the determination process. This document is located
on the Children's Bureau Web site at
<http://www.acf.hhs.gov/programs/cb/systems/sacwis/at98.htm>.

The ACF Regional Office also should become familiar with the State
statutes and administrative policies on electronic files, including
signature and document authentication. It is expected that the State's
automated system will document the data used to establish child and
provider eligibility and apply all eligibility factors consistently and
accurately in every eligibility determination. The ACF Regional Office's
assessment of the automated process should entail a basic exploration
of:

-   source of eligibility data in the system;

-   how data is input into the system;

-   how financial eligibility, legal decisions, and provider
    licensure/approval (including safety considerations) are determined
    and documented;

-   how eligibility decisions are sanctioned by the agency;

-   policy for accepting or certifying electronic signatures;

-   how the system captures all of the necessary factors considered in
    calculating eligibility;

-   how the system ensures that the eligibility rules are applied
    uniformly in every eligibility determination;

-   how data accuracy is ensured;

-   how data is maintained, updated, and secured; and

-   how agency sanction of eligibility decisions and case actions is
    documented.

The above information is not intended to be an exhaustive list of all
the factors to consider in examining the State's automated system. In
general, the State agency should demonstrate to the satisfaction of the
ACF Central and Regional Offices that the automated system is a valid
representation of the State's business practice and policy pertaining to
the eligibility determination process. A comparison of information in
actual case records to that contained in the electronic files also will
help the ACF Regional Office determine the validity of the State
agency's automated system and degree of representation.

*On-Site Review Instrument and Instructions*

The On-Site Review Instrument and Instructions (checklist) used for the
review will be provided to the team by the ACF Regional Office or its
designee (at least 100 copies for the primary review). Copies of the
On-Site Review Instrument also are available on the Children's Bureau
Web site at [www.acf.hhs.gov/programs/cb](). (See "On-Site Review
Instrument and Instructions," Appendix I; see also "Title IV-E
Eligibility Criteria for the Foster Care Maintenance Payments Program,"
Appendix VII; and "Title IV-E Foster Care Eligibility Chart," Appendix
XI.)

An On-Site Review Instrument is completed for each sample case in which
at least one title IV-E foster care maintenance payment is made during
the PUR. If the child exits and subsequently re-enters foster care
during the PUR, an On-Site Review Instrument is completed for each
foster care entry during the PUR.

On-Site Review Activities

It is preferable to conduct the review in one large room rather than
several small rooms to allow for effective interaction among the team
members. The room should be accessible to the review team at all times
and secure to protect the confidentiality of the case records. Team
members are expected to be flexible about their working hours in order
to complete the review of all cases in the allotted 5 working days.

The State agency schedules the following activities for the on-site
review:

-   An entrance conference for Federal staff to meet with the review
    team members to discuss the structure and agenda of the week's
    activities and provide opportunities to raise and clarify issues
    pertinent to the review. This usually requires approximately 1 hour.
    State officials should be invited to attend the entrance conference.

-   An orientation of the review team members at the start of the review
    to the On-Site Review Instrument, the orientation questions, the
    case record format, electronic files, if any, and the functions of
    the review team. The ACF Regional Office typically conducts the
    orientation to the On-Site Review Instrument. The State is
    responsible for providing information in response to the orientation
    questions. From 1 to 3 hours should be set aside to complete these
    activities. (See "Recommended Topics for Discussion by the Title
    IV-E Foster Care Eligibility Review Team During the Pre-Review
    Conference Call and Before Reviewing Records On-Site," Appendix IV.)

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-   A meeting of the entire review team at the end of the review week to
    compile a summary of error cases, if any, to discuss the model
    practices and areas in need of improvement that were revealed during
    the review, and to prepare for the exit conference. Team members
    also may raise concerns and offer suggestions that will help to
    improve the review process, on-site review activities, and the
    On-Site Review Instrument. About 1 to 2 hours should be allotted for
    the review team debriefing.

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-   An exit conference for Federal staff to meet with the senior
    management staff identified by the State agency. During this
    conference, the ACF staff provide an overview of tentative findings
    of the review, discuss next steps, and raise and clarify issues
    related to the review or the findings. It is usually sufficient to
    allow 1 hour to complete the exit conference. The entire review team
    should be present for the exit conference.

    **Chapter 4**

    **Eligibility Requirements**

States will be reviewed against the requirements of title IV-E of the
Act regarding the eligibility of the children on whose behalf the foster
care maintenance payments are made, including their placement in a
properly licensed or approved foster care facility.

The following documentation must be provided to verify the child's
eligibility:

-   evidence of judicial removal as a result of judicial determinations
    of "contrary to the welfare" and "reasonable efforts" or via a
    voluntary placement agreement;

-   responsibility for placement and care vested with the State agency
    or another public agency with which the State agency has a title
    IV-E \[§472(a)\] agreement;

-   eligibility for AFDC under the State plan as it was in effect on
    July 16, 1996, or earlier, if the child was removed before this
    date;

-   placement in a licensed or approved foster family home or childcare
    institution; and

-   verification of safety requirements for children placed in foster
    care.

> The child is not eligible for title IV-E funding until all eligibility
> criteria pertaining to the child's removal from home and placement in
> foster care are met. This means that if the judicial finding of
> "contrary to the welfare" is rendered in November 2004, and the
> finding of "reasonable efforts to prevent removal" is rendered in
> January 2005, title IV-E eligibility and Federal financial
> participation may not begin until January 2005, on the condition that
> State agency responsibility for placement and care, provider
> eligibility and AFDC eligibility are established in January 2005 or
> earlier for the most recent foster care episode. The child also is not
> eligible for title IV-E funding if the child is not removed pursuant
> to a judicial determination or a voluntary placement agreement.

Documentation for ongoing eligibility also includes evidence of: a
judicial determination regarding reasonable efforts to finalize a
permanency plan; a judicial determination within 180 days of placement
through a voluntary placement agreement that the placement continues to
be in the child's best interest; and continued eligibility for AFDC.

The eligibility requirements are summarized in the narrative that
follows and the "Title IV-E Foster Care Eligibility Chart," Appendix XI.

Judicial Removals

Removals pursuant to a court order must be the result of judicial
determinations of "contrary to the welfare" and "reasonable efforts." A
removal is considered to not have occurred in situations in which the
child is judicially removed from the parent or another specified
relative and the child is permitted to remain in that same relative's
home under the supervision of the State agency. The physical removal
from the home must coincide with the judicial ruling that authorizes the
child's removal from the home and placement in foster care under the
responsibility of the State agency. In these situations, the child is
not eligible for title IV-E funding for the duration of the foster care
episode, in accordance with 45 CFR §1356.21(k)(2).

The judicial determinations of "contrary to the welfare" and "reasonable
efforts" must be made in valid court orders, that is, court orders that
the State's statute defines as legally enforceable within the State. For
the eligibility review, a court order is considered valid if it conforms
to the State's statutory definition of a legally enforceable vehicle
that conveys a judicial ruling within the State about a particular
course of action or behavior. A distinction is not made about the type
of court order in which the "contrary to the welfare" or "reasonable
efforts" determination is required. Nor is it necessary for the judicial
determination to take place during a court hearing.

Judicial determinations must be made on a case-by-case basis; explicitly
stated in the court order; and signed by a reviewing judge or other
State designated court official, if a signature is required in State
law; and in conformity with regulatory timeframes. The judicial
determination that relies solely on references to State statutes in an
attempt to substantiate the requisite judicial finding or implies a
judicial finding is not explicit and is not sufficient for title IV-E
eligibility. To be explicit, the court orders must definitively
articulate the judge's child-specific ruling pertaining to the "contrary
to the welfare" and "reasonable efforts" determinations. The judicial
determinations do not need to include the exact term "reasonable
efforts" or "contrary to the welfare," but the findings must
specifically convey that the court determined that reasonable efforts
were made or were not required to be made by the State agency, or that
it was contrary to the welfare of the child to remain in the home. The
eligibility reviewer may not infer a determination made by the court.

Courts may demonstrate that the judicial determination is child specific
and has been made on a case-by-case basis in a number of different
manners, including referencing in the court order "the facts of a court
report, related psycho-social report, or sustained petition." \[See
Preamble to the Final Rule, 65 FR 4020, 4056 (January 25, 2000)\]. Such
documentation establishes that the judge reviewed the particular facts
and circumstances of the specific child. Although not required,
including in the court order the facts upon which the "contrary to the
welfare" and "reasonable efforts" determinations are based significantly
improve the quality of the court order. The date the court ruling is
rendered, rather than the date the court order is signed, should be used
to establish timeframes for judicial determinations related to a child's
eligibility for title IV-E foster care.

The reviewer's analysis of the case record or State agency's report and
recommendation cannot serve as a substitute for the appropriate judicial
finding. The court's mere review and approval of the State agency's
report and recommendation absent an expressed ruling concerning
"contrary to the welfare" or "reasonable efforts" are not sufficient.
The court must make a definitive finding. Affidavits attesting that the
judicial determination occurred at a previous hearing and nunc pro tunc
("now for then") court orders that change the substance of a prior
judicial determination or constitute a judicial determination not
previously made are not acceptable documentation in support of a
judicial determination. If an acceptable court order containing the
requisite judicial determination is not furnished, a transcript of the
court proceeding is the only alternative to a court order to
substantiate that the judicial determination requirement is met
satisfactorily. When an affidavit or nunc pro tunc order is presented to
document a judicial determination the reviewer must examine the court
transcript to verify that the judicial ruling is made at the time of the
court proceeding in question and within the specified timeframe.

*Contrary to the Welfare*

A child's removal from the home must be the result of a judicial
determination to the effect that continuation in the home would be
contrary to the child's welfare, or that placement in foster care would
be in the best interest of the child.

*For a child removed before March 27, 2000,* the judicial determination
regarding "contrary to the welfare" may be made in the removal order or
in a subsequent order resulting from court proceedings that are
initiated (the petition filed) no later than 6 months from the date the
child is removed from home, consistent with Departmental Appeals Board
Decision Number 1508 (DAB 1508). In that decision, the DAB ruled that a
petition to the court stating the reason for the State agency's request
for the child's removal from home, followed by a court order granting
custody to the State agency, is sufficient to meet the contrary to the
welfare requirement. The petition must be filed within 6 months of the
child's physical removal from home; however, the resultant court finding
may occur in a later court ruling and must sustain the removal petition.
The removal petition alone will not satisfy the title IV-E eligibility
requirement. There must be a judicial finding of "contrary to the
welfare." However, if the petition contains the "contrary to the
welfare" finding and the court sustains the petition, the eligibility
requirement is met. Title IV-E eligibility may not begin before
attaining the requisite judicial finding. []{.mark}

*For a child removed on or after March 27, 2000*, the judicial
determination regarding "contrary to the welfare" must be made in the
first order that sanctions the State agency's action to remove the child
from the home. This requirement is applicable even when the order is an
emergency order or "pick-up" order. The child's physical removal from
the home must coincide with the judicial ruling of "contrary to the
welfare." A physical removal that does not coincide with the judicial
determination requirement will not comply with 45 CFR §1356.21(c) and
the child is not eligible for title IV-E funding for the duration of the
foster care episode.

*Reasonable Efforts*

The State agency must obtain a judicial determination that it made
reasonable efforts to (1) maintain the family unit and prevent the
unnecessary removal of a child from the home, as long as the child's
safety is ensured, and (2) make and finalize a permanency plan in a
timely manner. The State agency's performance in obtaining the requisite
judicial determination is assessed through the title IV-E foster care
eligibility review. The judicial decision concerning whether or not the
State agency has made necessary and reasonable efforts to prevent the
child's removal from the home or made reasonable efforts to finalize a
permanency plan is an eligibility criterion. However, the activity that
the State agency undertakes to prevent the child's removal from the home
or to make and finalize a permanency plan is a State plan requirement.
Compliance with the title IV-E State plan is assessed during the course
of the child and family services review (CFSR).

If the eligibility criterion of "reasonable efforts" is not satisfied,
the child is not eligible for title IV-E funding. All judicial
determinations with respect to "reasonable efforts," even determinations
that such efforts are not required, must be clearly documented in the
judge's ruling and must be obtained within the prescribed time frames.
The reasonable efforts requirements do not apply to children who enter
foster care as a result of a voluntary placement agreement.

**Reasonable Efforts to Prevent Removal**

*For a child removed before March 27, 2000*, the judicial determination
that reasonable efforts were made to prevent removal or that reasonable
efforts were made to reunify the child and family satisfies the
reasonable efforts requirement*.* The judicial determination may be made
at any point in the foster care episode. However, as stated previously,
title IV-E foster care maintenance payments may not begin until the
first month all eligibility requirements pertaining to the removal are
satisfied. If the "reasonable efforts to prevent removal" criterion is
not satisfied at any point in the episode, the child is not eligible for
title IV-E funding on his behalf for the duration of the foster care
episode.

*For a child removed on or after March 27, 2000*, the judicial
determination that reasonable efforts were made, or were not required,
to prevent removal must be made no later than 60 days from the date of
the child's removal from the home \[45 CFR §1356.21(b)(1)\]. The State
agency may obtain this judicial determination earlier than 60 days from
the date of removal. If the eligibility criterion is not satisfied
within the time frame prescribed in the Federal regulations, the child
is not eligible under title IV-E for the duration of the foster care
episode.

**Reasonable Efforts to Finalize the Permanency Plan**

Once title IV-E eligibility has been established initially, a judicial
determination regarding the efforts the State agency made to finalize a
permanency plan is required annually to maintain title IV-E eligibility.

A judicial determination regarding reasonable efforts to finalize the
permanency plan \[45 CFR §1356.21(b)(2)\] must be made within 12 months
of the date on which the child is considered to have entered foster care
and at least once every 12 months thereafter while the child is in
foster care. If a judicial determination regarding reasonable efforts to
finalize a permanency plan is not made within this timeframe, the child
is ineligible at the end of the 12th month from the date the child is
considered to have entered foster care or at the end of the month in
which the subsequent judicial determination of reasonable efforts is
due, and remains ineligible until the beginning of the month in which
such a judicial determination is made.

If the court finds that the agency has not made reasonable efforts to
finalize the permanency plan, the case is ineligible until the court
determines such efforts have been made. Although the permanency hearing
may serve as the mechanism for obtaining the judicial determination of
"reasonable efforts to finalize," there is no requirement that the
judicial determination be made at the permanency hearing. (The
requirement to hold a permanency hearing is a State plan requirement for
title IV-E. It is not an eligibility criterion. If the State agency
fails to hold timely permanency hearings, it is out of compliance with
the title IV-E State plan requirements, and the child is not ineligible
for title IV-E funding solely for this reason).

The court's ruling regarding "reasonable efforts to finalize" may be
based on the State agency's efforts pertaining to the permanency plan
that was in effect at the time that the State agency sought the judicial
determination; a permanency plan that had been in effect for a brief
period of time immediately preceding the judicial ruling; or the
activities related to achieving permanency that took place over the 12
months immediately preceding the judicial ruling, even if the plan had
been abandoned during that 12-month period. Generally, a finding that
the agency is making reasonable efforts to reunify the family is not
sufficient if the permanency plan is not or has not been reunification
during the past 12 months. The judicial determination should reflect the
court's judgment as to whether the agency activities that were performed
during the previous 12 months were meaningful in bringing about
permanency for the child.

The effective date of the "reasonable efforts to finalize" provision is
March 27, 2001, in order to allow States a transition period to fulfill
this requirement for children who were already in foster care for 12
months or longer at the time the final rule was published.

*For a child removed before March 27, 2000*, the judicial determination
of "reasonable efforts to finalize" must have been made no later than
March 27, 2001, because such a child would have been in care for 12
months or longer. If the judicial determination of "reasonable efforts
to finalize" was not made by March 27, 2001, the child became ineligible
for title IV-E foster care maintenance payments from April 1, 2001,
until such time that a judicial determination of "reasonable efforts to
finalize" was made. The title IV-E foster care eligibility review does
not verify the State agency's compliance with the March 27, 2001,
implementation date as a separate eligibility review issue. Rather, it
examines whether or not the judicial determination requirement is
satisfactorily met during the 12-month period that encompasses the PUR.
If the judicial determination requirement is not met, the reviewer must
go back to the date on which the requirement is met or March 27, 2001,
whichever is later, to establish whether title IV-E payments are made
for a period of ineligibility.

*For a child removed on or after March 27, 2000*, the judicial
determination of "reasonable efforts to finalize" must be made no later
than 12 months from the date the child is considered to have entered
foster care. The date the child is considered to have entered foster
care is defined as the earlier of the date of the first judicial finding
of child abuse and/or neglect; or, the date that is 60 calendar days
after the date on which the child is physically or constructively
removed from the home. \[See 45 CFR §1355.20(a).\] A State may assign an
earlier date, such as the date of the child's physical removal from the
home. However, for the purposes of title IV-E eligibility, the *date
child entered foster care* is the date as defined in the regulatory
reference cited here. This regulatory definition applies irrespective of
how the child enters foster care. The date child entered foster care
should not be confused with the date the child is removed from the home,
which is the date that the child is physically or constructively removed
and placed in a foster care setting. The purpose of the "date child
entered foster care" is to set the timing for certain case review system
requirements, including the permanency hearing, and the judicial
determination of reasonable efforts to finalize the permanency plan.

The *judicial finding* of child abuse or neglect refers to the
definitive ruling by the court that a child was subjected to abuse or
neglect. Typically, this definitive finding does not take place at a
shelter or emergency placement hearing where the State agency is given
temporary custody of the child due to an allegation of child abuse or
neglect. The judicial finding of child abuse or neglect typically is the
result of the court's adjudication or settlement of a formal allegation
of child maltreatment.

The On-Site Review Instrument requires the State agency to document the
date child entered foster care for each sample case under review with a
removal date of March 27, 2000, or after, for the most recent foster
care episode. The timing for securing the initial judicial determination
of "reasonable efforts to finalize" is no later than 12 months from the
date the child is considered to have entered foster care. Subsequent
judicial determinations of "reasonable efforts to finalize" must occur
at regular 12-month intervals and no later than 12 months from the month
in which the prior determination actually is obtained. If the judicial
determination of "reasonable efforts to finalize" is not made or is not
timely, the child becomes ineligible from the time the finding is due
and remains ineligible until such a judicial determination is made.

The members of the review team examine a case record to discern whether
the "reasonable efforts to finalize" judicial determination requirement
is satisfied during the 12-month period encompassing the PUR. However,
if through the conduct of the case record examination the reviewer
determines that a judicial determination of "reasonable efforts to
finalize" is not made timely, the related ineligible payments will be
disallowed. The untimely judicial determination of "reasonable efforts
to finalize" for which ineligible payments are made, will render the
case in error if the judicial determination is: due before or during the
PUR, but is not made during the PUR; or due before or during the PUR and
is made during the PUR, but is not made timely during the PUR. The
exception to this Federal policy occurs when a judicial determination of
"reasonable efforts to finalize" is not made until some time during the
month following the month such determination is due.

The untimely judicial finding will not render the case ineligible
because of the *end of the month-beginning of the month* eligibility
principle. Under this principle, when a judicial determination regarding
reasonable efforts to finalize a permanency plan is not made, title IV-E
eligibility exists until the end of the month in which the judicial
determination is required to be made \[45 CFR §1356.21(b)(2)ii)\]. Title
IV-E eligibility may begin again on the first day of the month in which
the judicial determination regarding reasonable efforts to finalize a
permanency plan is satisfied, irrespective of the date during the month
the judicial determination is satisfied. Thus, in the case when the
"reasonable efforts to finalize" judicial determination is obtained
during the month following the month that it should be obtained, there
is no period of ineligibility regarding this judicial requirement.

Voluntary Placements

A voluntary placement is an out-of-home placement of a minor child by or
with the participation of the State agency, after the child's parents or
legal guardians request the assistance of the agency and sign a
voluntary placement agreement. A representative of the State agency must
sign the voluntary placement agreement as well.

A removal pursuant to a voluntary placement agreement is considered to
not have occurred in situations where the parent or another specified
relative has signed the voluntary placement agreement and the child is
permitted to remain in that same relative's home under the supervision
of the State agency. In these situations, the child is not eligible for
title IV-E funding for the duration of the foster care episode, in
accordance with 45 CFR §1356.21(k)(2).

An otherwise eligible child is eligible for title IV-E foster care
maintenance payments for a period of 180 days, pursuant to a voluntary
placement agreement. The 180 days begin on the date the child is placed
in foster care. However, if the child is constructively removed, the 180
days begin on the date that the voluntary placement agreement is signed
by all parties. Title IV-E eligibility ceases on the 181^st^ day unless,
within the first 180 days, there is a judicial determination that
indicates continued voluntary placement is in the best interest of the
child. Title IV-E eligibility also ceases when a State agency fails to
obtain the requisite judicial determination within the first 180 days,
but petitions the court on the 181^st^ day and is granted a judicial
removal with determinations of "contrary to the welfare" and "reasonable
efforts." Under these conditions, the State agency fails to meet the
timeliness requirement for the voluntary placement program and is
ineligible for continued Federal reimbursement for that foster care
episode. The fact that a removal petition is filed within 6 months of
the signed voluntary placement agreement will not change the nature of
the child's removal from voluntary to court-ordered in that foster care
episode and permit the State agency to claim Federal reimbursement for a
judicial removal during that foster care episode.

If it is determined that a valid voluntary agreement does not exist
between the child's parents or legal guardians and State agency, the
sample case will be cited as an error case and included in the
determination of substantial compliance. The associated foster care
maintenance payments and administrative costs claimed will be
disallowed. For purposes of the eligibility review, a voluntary
placement agreement will be considered valid if it is signed by the
parent or legal guardian and the State agency.

Responsibility for Placement and Care Vested With the State Agency

Section 472(a)(2) of the Act requires that the responsibility for
placement and care of a child be with the State agency administering the
title IV-E plan approved under §471 of the Act, or any other public
agency with whom the State agency has a written agreement in effect. The
agreement under §472(a)(2) of the Act permits another public agency to
operate as a title IV-E agency for a specified population of children in
foster care. This agreement is not merely an interagency agreement that
addresses activities to be carried out by the State agency and other
public agency (herein referred to as "public agency"), but it is one
that gives the public agency responsibility to administer the title IV-E
foster care program on the State agency's behalf for children under the
placement and care of the public agency.

The public agency that enters into a §472(a)(2) agreement with the State
agency must be authorized under State law to operate as a child-placing
agency and must be operating as such during the period that the
agreement is in effect. To receive Federal financial participation for
the placement and care of children, both the State agency and public
agency with which the State agency entered into a §472(a)(2) agreement
must ensure that all the title IV-E statutory and regulatory
requirements are met for the children covered by the agreement. The
State title IV-E agency must have access to the public agency's case
records, reports, or other materials in order to fulfill its
responsibility to monitor title IV-E compliance.

A copy of all existing §472(a)(2) agreements should be made available to
the Federal team leader before the on-site review to determine that the
public agency has a bona fide agreement in effect with the State agency
to operate a title IV-E program. If it is determined that a proper
§472(a)(2) agreement does not exist for a child during the PUR, the
sample case will be cited as an error case and included in the
determination of substantial compliance. The associated foster care
maintenance payments and administrative costs claimed will be
disallowed.

During the on-site review, the State agency must present documentation
that it, or another public agency under a §472(a)(2) agreement, has
responsibility for placement and care of the child for the entire PUR.
The court order or voluntary placement agreement must indicate that the
agency has this responsibility. Placement and care responsibility may be
granted in the removal court order or in a subsequent court ruling for a
judicial removal. However, Federal financial participation may not be
claimed before the eligibility requirement of placement and care is met.

If the State agency does not present documentation that verifies the
State agency or another public agency has placement and care
responsibility of the child for the PUR, the sample case will be cited
as an error case and included in the determination of substantial
compliance. The associated foster care maintenance payments and
administrative costs claimed will be disallowed. The sample case remains
in error for the foster care episode until the State agency, or another
public agency, is granted (or verifies it has) placement and care
responsibility for the child. It should be noted that although
responsibility for placement and care generally is associated with child
custody, the agency need not be given legal custody of the child as
legal custody is not a requirement under title IV-E.

When the title IV-E State plan authorizes Federal financial
participation for an 18-year-old youth, the State agency must provide
verification through the PUR to substantiate that placement and care
responsibility for the youth is retained beyond the age of 18. (See "Age
and School Attendance" in the following section for further discussion
on this subject). If the State agency does not present documentation
that verifies the State agency or another public agency has placement
and care responsibility of the youth during the PUR, the sample case
will be cited as an error case and included in the determination of
substantial compliance. The associated foster care maintenance payments
and administrative costs claimed will be disallowed. The youth remains
ineligible for title IV-E funding in the foster care episode until the
State agency, or another public agency, is granted (or verifies it has)
placement and care responsibility for the youth.

AFDC Eligibility

The purpose of the title IV-E foster care program is to provide
financial assistance to States for maintaining children who meet the
eligibility requirements for the Aid to Families with Dependent Children
(AFDC) program and cannot remain safely in their homes of origin. Thus,
a child's eligibility for title IV-E maintenance, in part, is predicated
on the child's eligibility for AFDC. The Personal Responsibility and
Work Opportunity Reconciliation Act of 1996 (PRWORA), which repealed the
AFDC program, requires States to apply the AFDC eligibility requirements
that were in place in the State's title IV-A plan on July 16, 1996
(disregarding any Section 1115(a) waivers that may have been in effect
on that date), when determining whether children are eligible for
Federal foster care assistance. If the child was removed from the home
before July 16, 1996, States are to apply the AFDC eligibility
requirements that were in place in the State at the time of the child's
removal.

In general, to meet the AFDC requirements the child must be determined
to be a "dependent child." The term "dependent child" means a child in
need who has been deprived of parental support or care, has been living
with a parent or other specified relative in a place maintained as the
home of the relative, and has not reached the maximum age designated for
program eligibility. The major provisions are summarized in the
narrative that follows and the "Matrix of AFDC Factors Related to Title
IV-E Foster Care Eligibility," Appendix XII.

There is no eligibility linkage between the AFDC program and the
Temporary Assistance to Needy Families (TANF) program. A child's
eligibility for AFDC is not based on a child's eligibility for TANF.
TANF income should be excluded from the AFDC budget computations
because, in accordance with Federal policy, TANF is a needs-based
program that also considers the individual's needs, income and resources
in determining recipient eligibility for the program.

*Determination of Dependency*

**Financial Need**

The State agency must establish that the child is financially needy
using criteria in effect as of July 16, 1996, in the State's title IV-A
plan. Typically, the initial determination of need is based on the home
from which the child is removed pursuant to a judicial order or a
voluntary placement agreement. (See "Removal from a Specified Relative"
in this section of the review guide for further discussion on this
subject). The composition of the AFDC family unit must be determined
first in establishing whether the child is financially needy. The family
unit is defined as a group of individuals whose income, resources, and
needs are considered as a unit for purposes of determining AFDC
eligibility.

Financial need must be established based on the circumstances that
existed in the home of the family unit during the month the court
proceedings leading to the child's removal were initiated or the
voluntary placement agreement was signed. In accordance with 45 CFR
§206.10(a)(1)(vii), the State agency must include in the family unit:
the child, the natural or adoptive parents, and the blood-related or
adoptive siblings who are otherwise eligible and who live in the same
household as the child. In States with support laws of general
applicability that require a step-parent to support his step-children to
the same extent as a natural or adoptive parent, step-parents married
under State law to the natural or adoptive parent and in the same
household as the child also must be included in the family income unit.

Certain individuals who live in the same household as the child must be
excluded from the family unit because they are not eligible for the AFDC
program due to other provisions of the Act. Examples of exceptions to
the requirement regarding composition of the family unit include:
individuals eligible to receive Supplemental Security Income (SSI),
certain aliens, and individuals who are ineligible for the AFDC program
due to receipt of a lump sum payment from any source.

After establishing the family unit, the determination of need is made by
considering all available income and resources of the individuals who
are included in the family unit. Income and resources are considered
available when the money or asset is accessible for use by an individual
in the family unit. The income and resources of individuals who are
statutorily excluded from the family unit are not considered for
purposes of determining the AFDC eligibility component of need for the
family unit. The financial need of a family is measured against the
State's need standard which is defined by the State, expressed in money
amounts, and is in effect in the State plan as of July 16, 1996. In
considering income to determine whether need exists for the family unit
in establishing initial eligibility, the State must use the AFDC
program's two step process:

1.  After applicable disregards, the family's total available income is
    measured against 185% of the State's AFDC standard of need for a
    family of the same size. If the family's total income before
    application of certain earned income disregards exceeds 185% of the
    AFDC need standard, the child does not meet the eligibility
    requirements for the AFDC program \[45 CFR § 233.20 and §
    233.20(a)(3)\].

2.  If the family's total available income does not exceed 185% of the
    AFDC need standard, additional specified income disregards are
    applied and the family's countable income is measured against 100%
    of the need standard to determine AFDC eligibility. Federal law
    requires that certain earned income disregards be applied after
    eligibility otherwise is established. If the family's total
    available income exceeds 100% of the AFDC need standard, the child
    does not meet the eligibility requirements for the AFDC program \[45
    CFR § 233.20(a)(3)\].

In considering the real and personal property to determine whether
financial need exists for the family unit, the combined value of
available, non-excludable resources for the family unit must not exceed
\$10,000. (The Foster Care Independence Act of 1999 amended §472(a) of
the Act to increase the resource limit to \$10,000.)

After a child enters foster care, the child becomes his or her own
financial unit and continuing financial need is determined by looking at
the income and resources available to the child. To re-determine a
child's AFDC eligibility, the State may apply a slightly different
process from the one used to determine initial eligibility. The child's
countable income may be measured against 185% of the AFDC need standard
or the child's foster care payment rate (i.e., foster care payment
standard) to determine continuing AFDC eligibility. The State does not
have to measure the child's income against 100% of the need standard. As
long as the child's countable income does not exceed 185% of the foster
care payment standard and the child meets the \$10,000 resource limit,
the child is considered to meet the financial need test under AFDC.

[]{.mark}

**Deprivation**

The State agency must establish that the child was deprived of parental
support or care at the time of the child's removal from his home. The
initial determination of deprivation must be established based on the
circumstances that existed in the child's home during the month the
court proceedings leading to the child's removal were initiated or the
voluntary placement agreement was signed. In addition, the initial
determination of need is based on the home from which the child was
removed pursuant to a judicial order or a voluntary placement agreement.

Deprivation of parental support or care of the child is defined as a
child who is in need, and whose parent, either father or mother:

-   has died;

-   has a medically documented physical or mental incapacity; or

-   is continually absent from the home in a manner such that the
    absence interrupts or terminates the parent's functioning as a
    provider of maintenance, physical care, or guidance for the child.

Deprivation also may be based, at the State's option, on the
unemployment of the child's parent who is the principal wage earner in
the family assistance unit. Deprivation may not be based on the fact
that the child is placed in foster care and absent from the home or that
the child is incapacitated. The determination of deprivation is made in
relation to the child's natural or adoptive parent or (in States with a
support law of general applicability) in relation to a step-parent who
is married to the child's natural or adoptive parent.

To determine continuing deprivation after a child enters foster care,
the State agency must refer to the home of the child's removal to
confirm that deprivation still exists in that home.

**Living With a Specified Relative**

Sections 472(a)(1) and (4) of the Act and 45 CFR §1356.21(l) require a
child to have lived in the home of a parent or other relative specified
at 45 CFR §233.90(c)(1)(v) and to have been eligible for AFDC in that
relative's home in the month of legal removal, that is, the month the
court proceedings leading to the removal are initiated or the voluntary
placement agreement is signed. If the child was not living with that
specified relative in the month of legal removal, the child: (1) must
have been living with the specified relative from whom legally removed
at some time within the previous 6 months of removal; and (2) must have
been AFDC eligible in that specified relative's home in the month of
legal removal as if the child still had been living with that relative
in the month of the petition or voluntary placement agreement. (See
below discussion for the exception to this Federal provision that
pertains to States under the jurisdiction of the Ninth Circuit Court.)

A child is considered to meet the requirement of living with one of the
relatives specified in the regulations at 45 CFR §233.90(c)(1)(v) if the
child lived with a parent or person in one of the following groups:

-   any blood relative, including those of half-blood, and including
    first cousins, nephews, or nieces; persons of preceding generations
    as denoted by prefixes of grand, great, or great-great;

-   stepfather, stepmother, stepbrother, and stepsister;

-   persons who legally adopt a child or the child\'s parent as well as
    the biological and other legally adopted children of such persons,
    and other relatives of the adoptive parents in accordance with State
    law; and

-   spouses of any persons named in the above groups, even after the
    marriage is terminated by death or divorce.

**Removal From a Specified Relative**

In addition to "living in the home of a specified relative," §472(a)(1)
and (4) of the Act and 45 CFR §1356.21(k) require the child to have been
removed from the home of a parent or other relative specified at 45 CFR
§233.90(c)(1)(v) and to have been eligible for AFDC in the month of
legal removal, that is, the month the court proceeding leading to the
removal is initiated or the voluntary placement agreement is signed. The
removal must occur as a result of a voluntary placement agreement which
leads to a physical or constructive removal (i.e., non-physical, paper
removal) of the child from the home, or a judicial order for a physical
or constructive removal of the child from the home. In accordance with
45 CFR §1356.21(k)(2), a removal has not occurred when a judicial ruling
or voluntary placement agreement sanctions the removal of the child from
the parent or another specified relative and the child is allowed to
remain in the home of the same specified relative under the supervision
of the State agency.

*For a child removed before March 27, 2000*, there must be a "physical
removal" of the child from the specified relative's home in which the
child resided during the month the child was legally removed from that
specified relative and placed into foster care. If the child is not
living with the specified relative (from whom removed) during the month
of the voluntary placement agreement or initiation of court proceedings,
a physical removal from an interim caretaker may satisfy the removal
requirement provided that at some point during the 6 months before the
voluntary placement agreement or initiation of court proceedings the
child has lived with that specified relative. Under these circumstances,
the child is considered to have been living with and removed from the
home of the specified relative who is the basis of the judicial removal
or who enters into the voluntary placement agreement with the State
agency. AFDC eligibility must be determined for that specified relative
as if the child had been living in that home in the month of the
initiation of court proceedings or the voluntary placement agreement. A
constructive removal is not allowable for title IV-E funding.

*For a child removed on or after March 27, 2000*, the child may be
"physically" or "constructively" removed. A child is considered to be
constructively removed when a judicial ruling or voluntary placement
agreement sanctions the child's removal from the parent or another
individual, but the child is permitted to remain in the home of an
interim caretaker. The child is considered constructively removed on the
date of the first judicial order removing the child from the home or the
date the voluntary placement agreement is signed by all relevant
parties.

As stated earlier, the child must have been living with the specified
relative (from whom legally removed) within six months of physical
removal from the specified relative. If the child is not living with
that specified relative during the month of the voluntary placement
agreement or initiation of court proceedings, a physical removal from an
interim caretaker may satisfy the removal requirement provided that at
some point during the 6 months before the voluntary placement agreement
or initiation of court proceedings the child has lived with the
specified relative (from whom constructively removed). Under these
circumstances, the child is considered to have been living with and
removed from the home of the specified relative who is the basis of the
judicial removal or who enters into the voluntary placement agreement
with the State agency. AFDC eligibility must be determined for that
specified relative as if the child had been living in that home in the
month of the initiation of court proceedings or the voluntary placement
agreement.

The "living with" and "removal from" requirements must be satisfied by
the same specified relative's home and AFDC eligibility must be based on
that home. The statute did not contemplate the "living with" and
"removal from" requirement to be satisfied by two discrete individuals.
When the home from which the child is removed is not specifically
identified in the judicial order or petition for removal, the foster
care eligibility review examines whether AFDC eligibility is based on
the home of the individual that the State's law prescribes as the party
from whom the child must be legally removed in order for the child to be
under the placement and care of the State agency. Typically, this is the
home of the individual who is the subject of the "contrary to welfare"
judicial determination or voluntary placement agreement.

The only exception to the requirement that the child be "living with"
and "removed from" the same home is when a child, at the time of
removal, resides in a State that is under the jurisdiction of the United
States Court of Appeals for the Ninth Circuit (hereafter Ninth Circuit).
As a result of the decision of the Ninth Circuit in the case of *Rosales
v. Thompson* (hereafter *Rosales*), the child's "home of removal" need
not be the home upon which the child's AFDC eligibility is based.
Therefore, States within the Ninth Circuit must consider whether a child
would have been eligible for AFDC, at the time the child legally was
removed from the home, in either: the home from which the child legally
was removed or the home of any specified relative with whom the child
lived in the 6 months before removal, provided that the relative upon
whom the AFDC eligibility is based had established a home for the child
that is consistent with 45 CFR §233.90(c)(1)(v)(B). Under this
definition, the child's home is the family setting maintained or in the
process of being established as evidenced by assumption and continuation
of responsibility for the day-to-day care and control of the child by a
relative with whom the child is living, if the relative is one of
specified degree.

The *Rosales* decision applies only to States within the Ninth Circuit,
specifically, Alaska, Arizona, California, Hawaii, Idaho, Montana,
Nevada, Oregon, and Washington. These States must amend their State
title IV-E plans so that they are consistent with the *Rosales* decision
and the title IV-E plan amendments must be approved by ACF. States that
are outside of the Ninth Circuit must continue to base AFDC eligibility
on the home of the specified relative from whom the child is legally
removed (i.e., removal resulting from a voluntary placement agreement or
judicial ruling of contrary to the welfare).

**Age and School Attendance**

As stated previously in this section, to meet the AFDC requirements the
child must be determined to be a dependent child, that is, a needy child
who has been deprived of parental support or care, living with a parent
or other specified relative in a place maintained as the home of the
relative, and who has not reached the maximum age designated for program
eligibility. AFDC eligibility may be granted to an otherwise eligible
child who is under 18 years of age. When a child reaches his or her 18th
birthday, generally eligibility for AFDC ceases beginning on the first
day of the month following attainment of age 18.

However, a State agency may have elected to include in its AFDC State
plan eligibility coverage for youth age 18 who are full-time students in
a secondary school, or in the equivalent level of vocational training or
technical training, and who may reasonably be expected to complete the
program before reaching age 19. If the State agency does not exercise
this State plan option, eligibility for title IV-E foster care ceases at
the end of the month the child turns 18. If the State agency exercises
this State plan option, eligibility for title IV-E foster care ceases at
the end of the month in which the child leaves school or when the child
turns 19, whichever occurs earlier. To meet the eligibility requirement
under this State plan option when the State agency's jurisdiction over a
child automatically ceases at age 18, the State agency must provide
verification that the child signed an authorization that explicitly gave
the State agency placement and care of the child. A court order
extending the State agency's custody of the youth beyond age 18 also
satisfies the placement and care requirement. School records,
independent living plans, or other documentation similar in purpose are
examples of evidence that may be used to satisfy the eligibility
requirement.

*Documentation for Initial AFDC Eligibility Determination*

During the title IV-E foster care eligibility review, the State agency
must document that the child is financially needy and deprived of
parental support during the month of the child's legal removal from
home. For the initial determination of the child's financial need and
deprivation, the child's case file should contain documentation
verifying that financial need is evaluated, indicating the reason that
the child is deprived of parental support or care. The manner used to
substantiate that the school attendance criterion is satisfied for the
18-year-old youth must be included as well.

Unless otherwise specified, the method for substantiating financial need
and deprivation is derived from the State agency's policy and
procedures. The documentation, at a minimum, should include an
eligibility worksheet that contains the name of the household on which
the child's AFDC eligibility is based, period of eligibility,
eligibility decision, basis of eligibility decision, and an indication
of the State agency's sanction of the decision, such as a supervisory
signature on the worksheet. There must be a specification of how the
child was determined to be in need and deprived of parental support or
care. The eligibility worksheet or summary should provide a clear,
evidence-based path to the eligibility decision.

The documentation should verify whether the child is AFDC eligible
during the month the voluntary placement agreement is signed or the
month that the removal petition is filed, or removal court order is
granted, if a removal petition is not filed. The child must be eligible
at the time of entry into foster care as well as continue to be eligible
throughout the foster care episode. Failure to conduct a determination
of the child's initial eligibility for AFDC will render the child
ineligible for title IV-E foster care maintenance payments and
administrative costs paid on behalf of the child during the entire
foster care episode. The child's case will be an error case and the
ineligible payments that were claimed will be disallowed.

*Documentation for Ongoing AFDC Eligibility\
(Re-determination)*

For a child in foster care longer than 1 year, the State agency must
document periodically, but not less than annually, that the child
continues to be financially needy and deprived of parental support or
care. All factors of AFDC eligibility must be reconsidered. At
re-determination, a child in foster care is considered his/her own
assistance unit and financial need is determined based on income and
resources available to the child. The income test against the State need
standard is applicable to the child's available income at all times
throughout the foster care episode.

Deprivation is re-determined by looking at the home from which the child
was legally removed for evidence that the child continues to be deprived
of parental support or care. Although the child's placement in foster
care does not constitute deprivation, once deprivation is established at
the time of the child's removal from the home, a termination of parental
rights can serve as documentation of continued deprivation.

The documentation, at a minimum, should include an eligibility worksheet
that contains the eligibility decision, period of eligibility, basis of
decision, and an indication of the State agency sanction of the
eligibility decision, such as a supervisory signature on the worksheet.
There must be a specification of how the child was determined to
continue to be financially needy and deprived of parental support or
care. The eligibility worksheet or summary should provide a clear,
evidence-based path to the eligibility decision. For the foster care
eligibility review, the documentation should verify whether the child
was AFDC eligible during the entire PUR.

Re-determination of eligibility is a State plan requirement. It is not
an eligibility requirement for the individual child in care. Failure to
conduct timely periodic reviews of the status of each child receiving
assistance may result in the State being out of compliance with its
State plan in accordance with §472(a) of the Act. While the timeliness
of the re-determination is not an eligibility issue, the State agency
must be able to show that the child continues to meet the mandatory
eligibility requirements.

*Reconstruction of AFDC Eligibility*

During the foster care eligibility review, if there is not a
determination of initial or continuing eligibility to cover the entire
PUR, the State agency will be allowed to reconstruct the AFDC factors to
verify the child's eligibility. If the State agency is unable to
determine the AFDC eligibility of a child for a period during the foster
care episode, any title IV-E payments claimed for the period of
ineligibility will be disallowed and any ineligible periods that occur
during the PUR will render the case in error. If the State agency is
able to determine the AFDC eligibility of a child, but the eligibility
requirements are not met for any month during the PUR, the case will be
in error and title IV-E payments claimed for the months in which AFDC
eligibility is not met during the PUR will be disallowed. Any ineligible
payments claimed outside the PUR will be disallowed as well.

To reconstruct AFDC eligibility, the State agency must retrospectively
establish the case facts that existed at removal or re-determination
using State AFDC eligibility criteria in effect as of July 16, 1996, or
such in effect for the period in question if the child is removed before
July 16, 1996. Perfunctory check-off of an AFDC worksheet without fully
exploring and documenting the pertinent case facts will not suffice for
Federal financial participation. As stated previously, there must be a
specification of how the child is determined to be financially needy and
deprived of parental support or care. The eligibility worksheet or
summary should provide a clear, evidence-based path to the eligibility
decision.

It should be noted that a determination of AFDC eligibility may be
completed at any point in the foster care episode; however, a claim for
title IV-E funds may not be made for a period later than 2 years after
the calendar quarter in which the State agency made the expenditure (45
CFR §95.7). If the foster care eligibility determined that claims are
made beyond this timeframe, the ineligible payments will be disallowed
for the entire period of ineligibility, but the ineligible payments will
not deem the case in error solely for this reason.

Placement in a Licensed Foster Family Home or Childcare Institution

The child must be placed in a title IV-E eligible foster care facility
and that facility must meet the standards for full licensure or approval
established by the State. Under title IV-E, an eligible foster care
facility may be a family foster home, group home, private childcare
institution, or public childcare institution which accommodates 25 or
fewer children. Children who are placed in detention facilities,
forestry camps, training schools, or other facilities that operate
primarily for detaining children adjudged delinquent are not eligible
for title IV-E foster care maintenance payments. Licenses or approvals,
such as probationary or provisional, that are issued to a foster care
facility because the facility fails to satisfy all of the State's
standards for full licensure or approval render the children who are
placed in the foster care facility ineligible for title IV-E funding. In
addition, the State agency may not claim title IV-E funds for a foster
care facility for which the State issues an interim license pending
satisfaction of a licensing standard (for example, waiting on the
results of a criminal records check or the completion of training).

The Federal statute requires licensed or approved foster care facilities
to conform fully to the same standards within the State that the State
establishes for similarly situated foster family homes and childcare
institutions operating to provide foster care. Past confusion in the
field about the Federal statutory terminology of "licensed" and
"approved" led States to interpret incorrectly that the statutes allowed
a two-tiered system for certifying foster family homes. Consequently,
the final rule that was published on January 25, 2000, amended the
Federal statutory definition of foster family homes to clarify that the
statutes do not make a distinction between a licensed foster family home
and an approved foster family home. The definition also reiterates the
prohibition on provisional licenses for foster family homes.

The term "licensed" will be used in this review guide to denote foster
care facilities that meet all of the State's standards for full
licensure, approval, certification, or other synonymous term.

*For a foster family home licensed before March 27, 2000*, Federal
reimbursement will be allowed for the period of March 27, 2000, through
September 27, 2000, if the home did not meet full licensure status for
that period. These foster family homes, including those licensed by a
child-placing agency, must meet full licensure beginning October 1,
2000.

*For a foster family home licensed on or after March 27, 2000*, there is
no grace period to allow the foster care provider to come into
compliance with the requirement for full licensure. These foster family
homes, including those licensed by a child-placing agency, must meet
full licensure beginning April 1, 2000.

*For a childcare institution*, there is no grace period to allow the
foster care provider to come into compliance with the requirement for
full licensure regardless of when licensed because it was not necessary
to clarify within the final rule the statutory definition of a childcare
institution.

The title IV-E foster care eligibility review does not evaluate the
adequacy of a State agency's licensing standards or the State agency's
compliance with the standards it established for full licensure, unless
the licensing standards pertain to the safety of the foster care
facility. This is because §471(a)(10) of the Act grants to States the
responsibility for setting uniform standards of licensure. A State's
failure to adhere to its licensure protocol is treated as an issue of
compliance with §471(a)(10) of the Act and the State plan under title
IV-E. If it is determined during the course of the eligibility review
that a State agency gave full licensure status to a foster care facility
that may not have complied with the State's standards, it should be
reported as an observation in the final findings of the eligibility
review. The lapsed license of a child-placing agency that has State
authority to license foster family homes that it administers also should
be reported as an observation in the final findings rather than as an
eligibility issue. Following the eligibility review, 45 CFR §1355.32(d)
authorizes the ACF Regional Office to explore whether the issue of
concern constituted a violation of the State plan requirements and
whether corrective measures are necessary.

Through the provisions at 45 CFR §1356.71, the title IV-E foster care
eligibility review substantiates that the child's foster care placement
was fully licensed for the entire time the child resided in the
placement during the PUR, and that the placement type complied with the
Federal definition of an eligible foster care facility. Federal
regulations at 45 CFR §1355.20(a) define an eligible foster care
facility as a foster family home, group home, public institution of 25
or fewer children, private non-profit childcare institution, or
for-profit childcare institution. A facility that does not fall into one
of these categories is not eligible for Federal matching funds. The
certificate of licensure, a letter of approval, or other documentation
similar in purpose may satisfy the documentation of full licensure. All
documentation of licensure as a foster care facility must show that the
home or childcare institution is fully licensed for the duration of the
child's placement for the PUR, even when the foster care provider is an
out-of-State facility.

Title IV-E foster care maintenance payments may not be made on behalf of
a child placed in a foster family home or childcare facility that is not
fully licensed. Nor may title IV-E foster care maintenance payments be
made on behalf of a child before the month the foster family home or
childcare institution attained full licensure. When title IV-E foster
care maintenance payments and administrative costs are claimed during
the PUR in either situation, the case will be in error and the
ineligible title IV-E foster care maintenance payments and
administrative costs will be disallowed for the entire time the
ineligible payments are claimed. In addition, when title IV-E foster
care maintenance payments and administrative costs are claimed solely
outside the PUR in respect to either situation described here, the case
will not be in error for this reason, but the improper title IV-E foster
care maintenance payments and administrative costs will be disallowed
for the entire time the ineligible payments are claimed.

State agencies may claim title IV-E reimbursement during the period
between the date a foster care facility satisfied all of the State's
requirements for licensure and the date the actual licensing document
was issued, not to exceed 60 days. The 60-day period begins when the
State agency obtains all of the necessary documentation to substantiate
the facility's full compliance with the State's licensure standards. In
determining the period of eligibility, any foster family home or
childcare institution that is licensed for a portion of a month is
considered licensed the entire month. However, Federal maintenance
payments may be claimed only for the portion of the month the otherwise
eligible child resided in the licensed foster family home or childcare
institution. The State's policy regarding when and how licenses lapse is
given preference when considering whether a foster care facility was
fully licensed during the period that intervenes the license lapse and
license renewal. Although maintenance payments may not be claimed for an
unlicensed foster family home, Federal financial participation (FFP) may
be claimed for the administrative costs associated with an otherwise
title IV-E eligible child placed in an unlicensed foster family home, in
accordance with Program Instruction ACYF-CB-PI-02-08. In addition, FFP
may not be claimed for the maintenance costs associated with an
otherwise title IV-E eligible child placed in an unlicensed foster
family home if that home is licensed or approved as a facility other
than a foster care facility, such as a pre-adoptive family home.

Safety Requirements for Children Placed in Foster Care

To ensure that a child is not placed in a foster care setting where the
potential caregiver has caused or is likely to cause harm to a child,
§471(a)(20) of the Act and 45 CFR §1356.30 require States to examine the
potential safety risks posed to the child by a foster care provider. The
State agency must document that the foster care provider meets the
established safety standards before a child is placed with the foster
care provider and before title IV-E foster care maintenance payments are
claimed for the foster care provider. Although the statutes specify
compliance with the safety requirements as a condition of full
licensure, compliance with the safety provision is assessed as a
separate requirement for purposes of the eligibility review.

*For a State that has not opted out of the criminal records check
provision,* the State agency must conduct or require the conduct of
criminal record checks for prospective foster parents. A prospective
foster parent is considered to be any foster parent who is licensed on
or after November 19, 1997, or the date approved by ACF that permits the
State agency to delay implementation of the criminal records mandate. To
ensure that a foster parent is in compliance with the respective
timeframe, during the eligibility review the State agency must provide
documentation of the approval by ACF of the State agency's delayed
implementation date. The Federal provisions pertaining to the criminal
records check include those prospective foster parents operating under
the auspices of a child-placing agency. The safety requirement does not
extend to foster family homes licensed or approved before November 19,
1997.

For applicable States, the State agency must provide documentation that
criminal records checks are conducted with respect to each prospective
foster parent in a foster family home and that a prospective foster
parent is not convicted of any of the felonies enumerated in §471(a)(20)
of the Act. It is not sufficient to document that a request was made for
a criminal records check. The State agency must provide evidence of the
determination that the prospective foster parent's background check
complies with Federal and State law and regulations (where applicable).
Documentation must be provided even when the child is placed with a
prospective foster parent who lives out-of-State. Acceptable
documentation to satisfy the criminal record check requirement is
evidence that contains the results of the criminal records check and
that substantiates that the requirement is met for the duration of the
child's placement for the PUR.

*For a State that has opted out of the criminal records check
provision*, a State agency in accordance with 45 CFR §1356.30(e) must
establish procedures to determine whether a *prospective* foster family
home presents a potential safety risk for a child placed in its care.
The mechanism used to satisfy the safety requirement should be written
into State policy, procedures, or statutes, and reflected in the
licensing documentation. The Federal provisions include those
prospective foster parents operating under the auspices of a
child-placing agency and those residing out-of-state. The safety
requirement does not extend to foster family homes licensed or approved
before March 27, 2000. For applicable States, the State agency must
provide documentation that verifies that for the duration of the child's
placement during the PUR the prospective foster parent has met the
safety criteria. Documentation must be provided even when the child is
placed in an out-of-state foster family home. If the foster parent did
not meet the safety requirements, title IV-E foster care payments cannot
be made on behalf of a child placed in the foster family home. The State
agency will be expected to adhere to the safety standards established
within the State's law and the State agency will be scrutinized,
accordingly.

*For childcare institutions*, 45 CFR §1356.30(f) requires States to set
procedures that address safety considerations with respect to the staff
of the institution. The mechanism used to satisfy the safety requirement
should be written into State policy, procedures or statutes, and
incorporated into the licensing documentation. The safety requirement is
applicable to all childcare institutions operating as foster care
facilities licensed on or after March 27, 2000.

[]{.mark}

The State agency must provide documentation verifying that safety
considerations with respect to the staff of the institution are
satisfied for the duration of the child's placement for the PUR. The
State agency documentation must demonstrate that the staff of the
childcare institution meets the safety criteria that the State
establishes, even when the child is placed in an out-of-State
institution. If the childcare institution does not meet the safety
requirements of the State, title IV-E foster care payments cannot be
made on behalf of a child who is placed in the foster care facility. The
State agency will be expected to adhere to the safety standards the
State established for childcare institutions and the State agency will
be scrutinized, accordingly.

In general, if it is determined that a foster care provider does not
meet the safety requirement, title IV-E foster care payments cannot be
made for a child who is placed in the foster family home or childcare
institution. Nor may title IV-E foster care maintenance payments be made
on behalf of a child before the month the foster family home or
childcare institution complies with the safety requirement. When title
IV-E foster care maintenance payments and administrative costs are
claimed during the PUR in either situation, the case will be in error
and the title IV-E foster care maintenance payments and administrative
costs will be disallowed for the entire time the ineligible payments are
claimed. In addition, when title IV-E foster care maintenance payments
and administrative costs are claimed solely outside the PUR in respect
to either situation described here, the case will not be in error for
this reason, but the title IV-E foster care maintenance payments and
administrative costs will be disallowed for the entire time the
ineligible payments are claimed.

For further information on the title IV-E foster care eligibility
requirements, refer to 45 CFR §1356.21 and 45 CFR §1356.71. Also refer
to the Child Welfare Policy Manual that is posted on the Children's
Bureau Web site at http://www.acf.hhs.gov/programs/cb/\
laws_policies/laws/cwpm/index.jsp.

**Chapter 5**

**Final Report**

Purpose of the Final Report

The basic purpose of the final report is to document for the State the
determination of substantial compliance or noncompliance. It also
provides a listing of each error case with an explanation of the error,
a listing of each non-error case with an improper payment with an
explanation of the ineligible payment, an explanation of payments that
were eligible for claiming, but were not claimed, and a compilation of
the agency's strengths and areas in need of improvement. The State
agency should use the information in the final report to develop a PIP,
if necessary, and to enhance the effectiveness of its title IV-E
eligibility program.

Preparation of the Final Report

The ACF Regional Office, in consultation with the ACF Central Office
review representative and team leader for eligibility monitoring, will
develop the cover letter and final report to be signed and disseminated
by the ACF Regional Administrator. See "Sample Transmittal Letter
Including Notice of Disallowance," Appendix VIII; and "Model Report
Title IV-E Foster Care Eligibility Review," Appendix IX. The ACF
Regional Office will analyze the results of the cases reviewed and make
a determination about substantial compliance. Issues addressed in the
report should be relevant to the scope of the eligibility review and the
determination of substantial compliance or noncompliance. Any other
issues revealed during the review should be addressed in the report as
comments or observations. Observations or comments about the State child
and family services program should be limited to those issues that
directly impact the efficient and proper administration of the State
title IV-E eligibility program for foster care.

The completed final report to the State should include:

-   A *Transmittal Letter* that accompanies the report and includes a
    statement about substantial compliance; the notification of the
    disallowance, if applicable; and the notification of the timeframe
    in which the PIP must be submitted to the ACF Regional Office, if
    applicable. (See "Sample Transmittal Letter Including Notice of
    Disallowance," Appendix VIII.)

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-   An *Introduction* that provides an overview of the background and
    purposes of the review; the type of review (primary or secondary);
    and location, dates, and descriptions of the review activities,
    including the AFCARS reporting period under review and review team
    representatives. If the review type was secondary, include the
    reason a secondary review was necessary and a brief synopsis of the
    findings of the primary review that required the conduct of a
    secondary review.

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-   A *Scope of the Review* that describes the manner in which the
    review was conducted and provides a summary of the review findings,
    including the number of case records and oversample case records
    reviewed, the number of records in error, the case error rate and/or
    dollar error rate, the number of non-error cases with ineligible
    payments, the disallowance amount, the number of cases with
    underpayment and the underpayment amount.

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-   The *Case Record Summary* that provides a summary of the results of
    the review, including the sample size, oversample size, the number
    of eligible cases, the number of error cases, and the amount of
    maintenance dollars and amount of administrative costs associated
    with each error case. When applicable, a *subsection* of the case
    record summary will be included that summarizes the number of
    eligible cases in which an ineligible payment was claimed, the
    number of sample cases in which an allowable activity or cost was
    not claimed, but could have been claimed, and the amount of
    maintenance dollars and administrative costs associated with each
    eligible case with ineligible payments and with each sample case
    with underpayments. An analysis of the sample cases with payment
    issues also should be included in the Case Record Summary that
    identifies each case by sample number, along with an explanation of
    the payment issue and duration, and the statutory/regulatory
    citation that supports the determination that the case was
    ineligible or that an underpayment took place. The sample case name
    or other personal case identifiers should be excluded from the
    summary and other documents that may be made available for public
    review.

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-   A section on *Areas in Need of Improvement* that describes
    weaknesses or deficiencies discovered about the title IV-E foster
    care program during the review. Observations about program
    performance made in this area should be related primarily to needed
    program improvements and focus on areas of noncompliance resulting
    from the title IV-E foster care eligibility review.

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-   A section on *Strengths and Model Practices* discovered during the
    review that describes strengths or model practices that contributed
    to the efficient and proper administration of the State title IV-E
    program and may be replicated by other State eligibility programs.
    An example is an automated process for title IV-E eligibility
    determination that the ACF Office of State Systems determined to be
    compliant with the requirements of SACWIS (Statewide Automated Child
    Welfare Information System).

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-   A *Disallowance* section that indicates if a disallowance is
    warranted. The disallowance will consist of all ineligible
    maintenance dollars and administrative costs that occurred beginning
    with the first month of ineligibility and continuing through the
    date that is the earlier of the end of the service month that
    immediately precedes the month of the on-site review or when the
    ineligibility ceases for the most recent foster care episode. If
    funds are to be disallowed, the disallowance notification, with
    instructions for State appeals (45 CFR Part 16), will be a part of
    the transmittal letter of the report. The State agency must be
    advised that it will be liable for interest on the amount of funds
    disallowed by the Department, in accordance with the provisions of
    45 CFR §30.13.

-   An *Underpayments* section that indicates the total amount of
    maintenance dollars and administrative costs associated with the
    underpayments, if an underpayment is observed. The notification of
    underpayment, with instructions for claiming, will be included in
    the transmittal letter of the final report.

-   A section on *Next Steps* that indicates the activities the ACF
    Regional Office and the State agency should undertake to complete
    the current phase of the review and begin the next phase of the
    review cycle. This includes information concerning repayment of
    disallowances, further claim adjustments, timeframe for PIP
    development and completion, and subsequent review.

Dissemination of the Final Report

The ACF Regional Office will provide the final report with transmittal
letter to the appropriate officials at the State agency, with copies to
the State review coordinator and the Children's Bureau Associate
Commissioner, and an electronic copy to the ACF Central Office team
leader for eligibility monitoring within 30 calendar days of completing
the on-site review. The final report should be transmitted to the State
agency through the use of registered or certified mail with a request
for a return receipt to establish the date.

If the ACF Regional Office receives additional documentation subsequent
to issuing the final report and the documentation results in a change to
the review compliance or payment disallowance, the ACF Regional Office
will provide the State with written notification of the revised finding.
The subsequent notification should be signed and issued by the Regional
Administrator and an electronic copy forwarded to the ACF Central Office
team leader for eligibility monitoring. The ACF Central Office will post
on the Children's Bureau Internet Web site the final reports and other
pertinent information pertaining to the title IV-E foster care
eligibility reviews.

**Chapter 6**

**Program Improvement Plans**

Criteria for Developing a PIP

The State agency must develop a PIP when the State is determined not to
be in substantial compliance. This occurs when the eligibility review
findings indicate that the total number of error cases is nine or more
for an initial primary review, or five or more in primary reviews
subsequent to the initial primary review. The PIP must be developed by
State agency staff in consultation with Federal staff and must address
each area that the eligibility review identified as needing improvement.
The State agency must develop a PIP even in those situations where the
State agency appeals an adverse review finding and a decision is pending
before the Departmental Appeals Board. If a State agency chooses not to
implement a PIP, the ACF Regional Office immediately will schedule and
conduct a secondary review.

Content of the PIP

The format of the PIP may vary, but it must include the following
components:

-   specific goals or outcomes for program improvement;

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-   measurable action steps required to correct each identified weakness
    or deficiency;

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-   a date for completing each action step;

-   a description of how progress will be evaluated by the State agency
    and reported to the ACF Regional Office, including the frequency and
    format of the evaluation procedures; and

-   a description of how the ACF Regional Office will know that an
    action step has been achieved.

Preparation and Approval of the PIP

Responsibility for developing the PIP will rest with the State child
welfare agency in collaboration with the ACF Regional Office. The State
agency must submit its PIP to the ACF Regional Office for approval
within 90 calendar days from the date the State agency receives written
notice from the ACF Regional Office that it is not operating in
substantial compliance. This deadline may be extended an additional 30
calendar days (as determined by the ACF Regional Office) when requested
by the State agency in order for the State agency to submit additional
documentation to the ACF Regional Office in support of cases determined
to be in error as a result of the on-site eligibility review. However,
States are encouraged to submit any additional documentation for this
purpose as soon as possible after the on-site review.

There is no regulatory requirement governing the time frame for PIP
approval by the ACF Regional Office; however, in order to ensure
timeliness in the implementation of the PIP, the ACF Regional Office
should notify the State agency of approval or disapproval within 30
calendar days from the receipt of the PIP. The approval notification
should identify the targeted completion date, and be sent to the State
agency by certified mail, with a return receipt requested. The approval
letter should be signed and issued by the Regional Administrator and an
electronic copy of the approval letter, with approved date, and PIP
should be forwarded to the ACF Central Office team leader for
eligibility monitoring. An approval of the PIP by ACF means that the PIP
adequately addresses the required elements, but does not mean that a
State agency can be assured of being in substantial compliance following
a secondary or subsequent primary review. The PIP will have a
prospective date for the State agency to begin the implementation of the
PIP as specified in the ACF approval letter.

If the ACF does not approve the PIP, a written notification that details
the basis for the decision and target date for resubmission will be sent
to the State agency by certified mail, with a return receipt requested.
The letter of nonapproval should be signed and issued by the Regional
Administrator and an electronic copy of the letter should be forwarded
to the ACF Central Office team leader for eligibility monitoring. Within
30 calendar days from receipt of the written notice, the State agency
must revise and resubmit the PIP to the ACF Regional Office for
approval. If, following negotiation and assistance from the ACF Regional
Office, the State agency does not submit an approvable PIP within the
specified timeframe, the ACF Regional Office will initiate a secondary
review.

Timeframes for Implementing the PIP

State agencies will have a maximum of 12 calendar months from its
approved implementation date in order to complete implementation of the
PIP, unless State legislative action is required to implement needed
corrective action. The PIP may be completed earlier than the 12-month
period as determined by the latest date designated in the PIP for an
action step to be achieved.

When State legislative action is required for PIP completion, an
extension may be granted by ACF, with the ACF and the State agency
negotiating the terms and duration of the extension. The State
legislative action must be directly linked to an area of improvement and
action strategy identified in the PIP. It is expected that negotiations
concerning an extension of the PIP will have occurred before the
completion of PIP implementation. The timeframe for the duration of the
extension may not exceed the last day of the first legislative session
after the date that was previously approved for completing the PIP.

Requests for a PIP extension must be submitted in writing by the State
agency to the ACF Regional Office with documentation to support whether
the extension is due to State legislative action necessary to make the
required improvements. The ACF Regional Office must receive the written
request no later than 60 calendar days before the targeted completion
date of the PIP that was previously approved by ACF. The ACF Regional
Office will submit to the ACF Central Office the State agency's request
for an extension, along with the supporting information and the ACF
Regional Office recommendation. The ACF Regional Office will notify the
State agency of approval or disapproval of the PIP extension within 30
calendar days from the receipt of the State agency extension request.
The approval notification should be sent to the State agency by
certified mail, with a return receipt requested, and identify the
targeted completion date. The approval letter is signed and issued by
the Regional Administrator and an electronic copy of the approval
letter, with approved date, and PIP are forwarded to the ACF Central
Office team leader for eligibility monitoring.

Quarterly Progress Reports

The State agency will normally submit quarterly progress reports to ACF
Regional Office, as well as a cumulative report upon completion of PIP
implementation. The ACF Regional Office and State agency may determine
jointly when less frequent reporting is necessary. The ACF Regional
Office, in collaboration with the State agency and the ACF Central
Office team leader for eligibility monitoring, will review the periodic
reports to assess the State's progress in completing the prescribed
action steps in accordance with the timeframes and conditions identified
in the PIP. The quarterly progress report must contain sufficient detail
to describe the progress made during the reporting period, including
information that addresses the specific timeframes and benchmarks of
progress included in the PIP.

Technical Assistance

The ACF Regional Office will work with the States to determine needed
technical assistance, which will be provided to the extent available in
order to assist States in implementing the PIP. To the degree possible,
technical assistance needs should be coordinated with other program
enhancements efforts underway in the State, especially with regard to
the implementation of the State's child and family services review PIP
and Court Improvement Projects.

**Glossary**

**Case Error Rate** The case error rate is the number of cases in error
divided by the number of cases reviewed.

**Disallowance** A payment disallowance is taken whenever a title IV-E
eligibility criterion is not met and title IV-E funds are claimed for
the ineligible occurrence. The payment disallowance includes all title
IV-E foster care maintenance payments and applicable administrative
costs of the error cases and non-error cases with ineligible payments
that occurred during the period beginning with the first month of
ineligibility and continuing through the date that is the earlier of the
end of the service month that immediately precedes the month of the
on-site review, or when the ineligibility ceases for the most recent
foster care episode.

> For States found not to be in substantial compliance during the
> primary reviews, a disallowance will be assessed on the basis of
> payments associated with error cases and non-error cases with
> ineligible payments for the total of the title IV-E foster care
> maintenance payments made during the entire period that the payments
> are ineligible. Administrative costs associated with the ineligible
> payments will be disallowed. For secondary reviews, an extrapolated
> disallowance will be assessed in addition to a case specific
> disallowance on the basis of maintenance payments and administrative
> costs associated with error and non-error cases for ineligible
> payments that occurred before and after the period under review (PUR).

**Dollar Error Rate** The dollar error rate is determined by dividing
the maintenance and administrative dollars associated with the
ineligible payments during the PUR by the total dollar value claimed
during the PUR for the maintenance payments and administrative costs
associated with the case records reviewed.

**Error Case** A case is determined to be in error when a review of the
sample case indicates that a title IV-E payment for a maintenance or
administrative cost is made during the PUR on behalf of a child
determined not to meet the criteria for title IV-E eligibility during
the foster care episode.

**Improper Payment** An improper payment is considered to have occurred
in an error and non-error case whenever a title IV-E maintenance payment
or administrative cost is not claimed for an allowable title IV-E
activity or is claimed for an unallowable title IV-E activity. Improper
payments include underpayments and ineligible payments.

**Ineligible payment** An ineligible payment is considered to have
occurred in an error and non-error case whenever a title IV-E
maintenance payment or administrative cost is claimed for an unmet
eligibility criterion; for a duplicate payment; for an overpayment; or
for any other unallowable program cost.

**Initial Primary Review** The initial primary review is the first title
IV-E foster care eligibility review conducted in a State following the
publication of the final rule in the Federal Register on January 25,
2000. A sample of 80 foster care cases is reviewed. (All States, as well
as the District of Columbia and Puerto Rico, have undergone their
initial primary reviews.)

**Most Recent Foster** If a child has had multiple entries into foster
care, the

**Care Episode** most recent foster care episode begins with the date
that the child is last removed from the home and placed in foster care
before the end of the PUR and continues to the date the child is
discharged for such removal. If a child has remained in foster care
since his or her original removal from the home, the duration of this
foster care event is considered the most recent episode.

**Noncompliance** If a State is noncompliant, it is not in substantial

> compliance. For primary reviews, five or more of the title IV-E cases
> reviewed must be determined to be in error. For secondary reviews,
> noncompliance means both the case error rate and the dollar error rate
> exceed 10 percent.

**Non Error Case with** A case is determined to be a non-error case with
ineligible

**Ineligible Payment** payments when a review of the sample case
indicates that a title IV-E payment for a maintenance or administrative
cost is made solely outside the PUR on behalf of a child determined not
to meet the criteria for title IV-E eligibility.

> A non-error case with ineligible payments is included in the
> assessment of payment disallowance and calculation of the dollar error
> rate in the secondary review. It is excluded in the determination of
> substantial compliance for the primary reviews and in the
> determination of the case error rate for the secondary review.

**Period Under Review** The period under review (PUR) is the 6-month
reporting period of the Adoption and Foster Care Analysis and Reporting
System (AFCARS) from which the sample of cases is drawn for the
eligibility review. The AFCARS data are transmitted semi-annually by the
State agency to the ACF Central Office.

**PIP Completion Date** The PIP completion date is considered to be the
date that is earlier of the latest completion date of an action item in
the approved PIP or 12 calendar months from the approval date of PIP
implementation.

**Primary Review** The primary review is the first review in the title
IV-E foster care eligibility review process. A sample of 80 foster care
cases is reviewed. These cases, plus at least a 10 percent oversample,
are selected from AFCARS data utilizing a probability sampling
methodology. No alternate data source may be substituted for the AFCARS
for sampling selection.

**Program Improvement** The PIP is a plan developed by the State child
welfare

**Plan (PIP)** agency, in collaboration with the ACF Regional Office
that, when implemented, is intended to correct the areas determined not
to be in substantial compliance. The State agency must submit its PIP to
the ACF Regional Office for approval within 90 calendar days from the
date the State agency receives written notice from the ACF Regional
Office that it is not operating in substantial compliance. This deadline
may be extended an additional 30 calendar days when the State agency
submits additional documentation to the ACF Regional Office for approval
in support of cases determined to be in error as a result of the on-site
eligibility review.

**Review Oversample** The review oversample refers to the additional
cases that

> are randomly selected for potential review to ensure that the required
> number of sample cases is examined for a primary or secondary review.
> At a minimum, a 10 percent oversample will be selected from the
> State's most recent AFCARS submission to the ACF Central Office. A
> case from the oversample is reviewed in lieu of a case from the
> original sample when the original sample case is included in the
> sample erroneously.

**Review Sample** The review sample refers to the number of cases
initially selected for a review and consists of the cases of children
who received at least one title IV-E maintenance payment during the
6-month reporting period reflected in the State's most recent period of
AFCARS data submission. A sample of 80 cases is selected for review
during the primary review and a sample of 150 cases is selected for
examination during the secondary review.

**Secondary Review** The secondary review is conducted during the AFCARS
reporting period that follows the PIP completion date. A sample of 150
cases is reviewed in a secondary review. These cases, plus at least a 10
percent oversample of 15 cases, are drawn from the State's most recent
AFCARS data. No alternate data source may be substituted for the AFCARS
for sample selection.

**Secondary Review** When both the case error rate and dollar error rate
of a

**Extrapolation** secondary review exceed 10 percent, a disallowance
will be based on extrapolation from the sample to the universe of claims
paid for the duration of the AFCARS reporting period under review. The
extrapolated disallowance is equal to the lower limit of a 90 percent
confidence interval for the population\'s total dollars in error for the
amount of time corresponding to the AFCARS reporting period.

**Substantial Compliance** For the primary reviews, if the total number
of error cases does not exceed four, the State will be considered to be
in substantial compliance. For the secondary review, substantial
compliance means that either the case error rate or dollar error rate
does not exceed 10 percent.

**Three-Year Cycle of** States that are determined to be in substantial
compliance

**Reviews** must undergo a subsequent review after 3 years. The cycle
begins at the completion of the primary review. States that are not in
substantial compliance also must undergo a subsequent review after 3
years. The cycle begins at the completion of the secondary review.

**Underpayment** An underpayment is considered to have occurred when a
title IV-E payment is not claimed, but may be claimed, for an allowable
title IV-E activity or a period of eligibility.

**Universe of Claims Paid** The universe of claims paid is the Federal
share of title

> IV-E foster care maintenance payments and administrative costs for the
> period of the time that a case is in error. All title IV-E funds
> expended during the period of time the case is in error will be
> subject to disallowance, including funds for related administrative
> costs.

**When Payments** Federal financial participation may begin the first
day of

**May Begin** placement in the month in which all required eligibility
factors are satisfied. If eligibility is attained within a portion of
the month, title IV-E payments may be claimed retroactive to the first
day of the month. If a child is placed with a foster care provider on a
date other than the first of the month, title IV-E funds must be claimed
from the actual date of placement with the foster care provider.

**Appendices**

  --------------- -------------------------------------------------------
  **Appendix I:** On-Site Review Instrument and Instructions, Title IV-E
                  Foster Care Eligibility

                  

  **Appendix      Sample State Notification Letter
  II:**           

                  

  **Appendix      Materials to Read in Preparation for a Title IV-E
  III:**          Foster Care Eligibility Review

                  

  **Appendix      Recommended Topics for Discussion by the Title IV-E
  IV:**           Foster Care Eligibility Review Team During the
                  Pre-Review Conference Call and Before Reviewing Records
                  On-Site

                  

  **Appendix V:** Suggested On-Site Quality Control Tasks for the
                  Administration for Children and Families Regional
                  Office Team Leaders

                  

  **Appendix      Title IV-E Foster Care Eligibility Reviews Table of
  VI:**           Completed Case Records and Description of Improper
                  Payments

                  

  **Appendix      Title IV-E Eligibility Criteria for the Foster Care
  VII:**          Maintenance Payments Program

                  

  **Appendix      Sample Transmittal Letter Including Notice of
  VIII:**         Disallowance

                  

  **Appendix      Model Report Title IV-E Foster Care Eligibility Review
  IX:**           

                  

  **Appendix X:** Timeframes for Title IV-E Foster Care Eligibility
                  Review Activities

                  

  **Appendix      Title IV-E Foster Care Eligibility Chart
  XI:**           

                  

  **Appendix      Matrix of AFDC Factors Related to Title IV-E Foster
  XII:**          Care Eligibility

                  

  **Appendix      Provider Requirements, Title IV-E Foster Care
  XIII:**         Eligibility

                  

  **Appendix      Calculation of the Maintenance Payment and
  XIV:**          Administrative Cost Disallowances for the Title IV-E
                  Primary and Secondary Foster Care Eligibility Reviews
                  and of the National Foster Care Error Rate for the
                  Title IV-E Foster Care Program
  --------------- -------------------------------------------------------

Appendix I

  ---------------------------------------------------- ---------------------------------------------------------
  ![](media/image1.png){width="1.1395833333333334in"   U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES\
  height="1.1430555555555555in"}                       Administration for Children and Families\
                                                       Administration on Children, Youth and Families\
                                                       Children's Bureau

  ---------------------------------------------------- ---------------------------------------------------------

**Title IV-E Foster Care Eligibility**

**On-Site Review**

**Instrument and Instructions**

**March 2006**

**NON-ERROR CASE: □ ERROR CASE: □**

+-----------------------------------------------------------------------+
| *\[March 2006 Version\]*                                              |
|                                                                       |
| **Underpayments: YES □ NO □**                                         |
|                                                                       |
| **Ineligible Payments: YES □ NO □**                                   |
|                                                                       |
| **Each question must be answered***. If the question is not           |
| applicable, check "N/A" and indicate the reason the question does not |
| apply to the sample case. A question where the "N/A" box is shaded    |
| must be answered "yes" or "no." Boxes outlined in **bold** indicate   |
| **potential case errors** or **ineligible payments**. Review the      |
| instructions for each question for an explanation of how to answer    |
| it. The reviewer must verify every eligibility factor and document    |
| his/her decisions on the form for each sample case. The form may be   |
| annotated with information regarding eligibility and payments. To     |
| record additional foster care placements during the period under      |
| review (PUR) and data concerning improper payments, the               |
| "Licensing/Safety Checklist for Multiple Placements" and "Improper    |
| Payment Chart" are appended, respectively. All statutory citations    |
| refer to the applicable section of the Social Security Act (the Act). |
| The review instrument is to be completed for the most recent foster   |
| care episode. For multiple foster care entries during the PUR, an     |
| instrument is completed for each entry. Use pencil and print          |
| legibly.*                                                             |
|                                                                       |
| *\[**"**X" prefix indicates information in this field is confidential |
| and will not be disclosed for any purposes outside of the review\].*  |
|                                                                       |
| **Sample review period (MM/DD/YY): \_\_\_\_/\_\_\_\_/\_\_\_\_\_\_ -   |
| \_\_\_\_/\_\_\_\_/\_\_\_\_\_\_\_**                                    |
|                                                                       |
| *Record the begin date and end date of the 6-month sample PUR. This   |
| 6-month timeframe corresponds to the Adoption and Foster Care         |
| Analysis and Reporting System (AFCARS) period from which the sample   |
| was drawn.*                                                           |
|                                                                       |
| 1.  **State Postal Code and Random Sample Selection Number:           |
|     \_\_\_\_\_\_\_ \_\_\_\_\_\_\_\_\_**                               |
|                                                                       |
| *Record the two-letter State postal code and the selection number     |
| assigned to the sample case.*                                         |
|                                                                       |
| 2.  **Case ID:                                                        |
|     \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_**  |
|                                                                       |
| *Record the case number the State uses as an identifier for the       |
| child's file.*                                                        |
|                                                                       |
| 3.  **County or Local Office:                                         |
|     \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_**  |
|                                                                       |
| *Record the name of the county or local office that has assignment    |
| for the child's file.*                                                |
|                                                                       |
| 4.  **Review Date (MM/DD/YY):                                         |
|     \_\_\_\_\_/\_\_\_\_\_\_/\_\_\_\_\_\_\_\_\_\_**                    |
|                                                                       |
| *Record the date the case is reviewed.*                               |
|                                                                       |
| 5.  **Reviewed By:                                                    |
|     \_\_\_\_\                                                         |
| _\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_** |
|                                                                       |
|     *Record the name of the individual reviewing the case.*           |
+-----------------------------------------------------------------------+
| **A. CHILD INFORMATION**                                              |
+-----------------------------------------------------------------------+
| **X1. Child's Name:                                                   |
| \_\_\_\_\_\_\_\_\                                                     |
| _\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_** |
|                                                                       |
| *Record the first and last name of the child whose case is being      |
| reviewed.*                                                            |
|                                                                       |
| **6. Child's Date of Birth:                                           |
| (MM/DD/YY)\_\_\_\_\_/\_\_\_\_/\_\_\_\_\_\_\_\_**                      |
|                                                                       |
| *Enter the month, date, and year of birth of the child whose case is  |
| reviewed.*                                                            |
|                                                                       |
| **7. Child's Age as of First Day of Period Under Review:              |
| \_\_\_\_\_\_\_\_**                                                    |
|                                                                       |
| *Enter the age of the child on the first day of the PUR. If the child |
| is less than one year old on the first day of the PUR, enter a zero   |
| (0). Sections 406 and 472 of the Act limit title IV-E eligibility to  |
| children under the age of 18, or over age 18 but under age 19, if a   |
| full-time student (Title IV-A State plan option).*                    |
+-----------------------------------------------------------------------+

***Comments:** (Please reference question number for each comment.)*

+-----------------------------------------------------------------------+
| **B. RELEVANT DATES (may precede PUR)**                               |
|                                                                       |
| \[Statutory Citation: §475(5)(F); Regulatory Citation: 45 CFR         |
| §§1355.20, 1356.21(b)(2), and 1356.22\]                               |
+-----------------------------------------------------------------------+
| 8.  **Has there been a valid removal of the child from the home       |
|     during the most recent foster care episode?**                     |
|                                                                       |
| **Removal date: (MM/DD/YY) \_\_\_\_\_\_\_/\_\_\_\_\_/\_\_\_\_\_\_**   |
|                                                                       |
| *If "yes," enter the date of physical removal or, if a constructive   |
| removal, enter the date of the removal court order or the date of the |
| final signature on the voluntary placement agreement. (Constructive   |
| removals, i.e., paper removals, apply to removals that occurred on or |
| after March 27, 2000). If "no," the child is ineligible to have title |
| IV-E foster care maintenance payments made on his behalf for the      |
| entire foster care episode, the case is in error, and all ineligible  |
| payments must be recorded on the attached "Ineligible Payment         |
| Chart."*                                                              |
|                                                                       |
| *A valid removal has not occurred when a court ruling or voluntary    |
| placement agreement sanctions the removal of the child from the       |
| parent or another specified relative and the child is allowed to      |
| remain in the same specified relative's home under the supervision of |
| the State agency (see 45 CFR §1356.21(k)(2)). The physical removal    |
| from the home must coincide with the judicial ruling or the voluntary |
| placement agreement that authorizes the child's removal from the home |
| and placement in foster care.*                                        |
|                                                                       |
| *Question 8 records the date of the child's most recent removal from  |
| the home of the parent or another specified relative via a court      |
| order or voluntary placement agreement (i.e., legal removal). The     |
| removal date is tied to a child's initial eligibility for AFDC        |
| (Questions 17-21) and the judicial determinations of "contrary to the |
| welfare" (Question 11) and "reasonable efforts to prevent removal"    |
| (Question 12).*                                                       |
+-----------------------------------------------------------------------+
| 9.  **Date child entered foster care: (MM/DD/YY)                      |
|     \_\_\_\_\_\_\_/\_\_\_\_\_/\_\_\_\_\_\_**                          |
|                                                                       |
| *[For a removal pursuant to a voluntary placement                     |
| agreement:]{.underline} Indicate "N/A" and proceed to Question 10.*   |
|                                                                       |
| *[For a removal before March 27, 2000:]{.underline} Indicate "N/A"    |
| and proceed to Question 10.*                                          |
|                                                                       |
| *[For a removal on or after March 27, 2000:]{.underline} Record the   |
| date the child is considered to have entered foster care, which is    |
| the earlier of a judicial finding of abuse or neglect                 |
| [or]{.underline} 60 days from the date the child is physically or     |
| constructively removed from the home (see 45 CFR §1355.20(a)). This   |
| date is required to determine when to obtain the initial judicial     |
| determination of "reasonable efforts to finalize the permanency plan" |
| (Question 16).*                                                       |
+-----------------------------------------------------------------------+
| **C. REMOVAL PURSUANT TO A COURT ORDER**                              |
|                                                                       |
| \[Statutory Citation: §§472(a)(1), 471(a)(15)(B)(i); Regulatory       |
| Citation: 45 CFR §1356.21(c)\]                                        |
+-----------------------------------------------------------------------+
| **10. Is the child\'s removal the result of a court order?**          |
|                                                                       |
| *If the removal is pursuant to a court order, enter "yes" and proceed |
| to Question 11.*                                                      |
|                                                                       |
| *If the removal is not pursuant to a court order, enter "no."         |
| Questions 11 and 12 are "N/A."*                                       |
|                                                                       |
| *Removal of the child from the home must be pursuant to a judicial    |
| order or a voluntary placement agreement that leads to a physical or  |
| constructive removal from the home that is the subject of the         |
| judicial order or the voluntary placement agreement.*                 |
+-----------------------------------------------------------------------+
| **For Questions 11 and 12:** *The judicial determination must be made |
| in a valid court order, that is, a court order that the State's       |
| statute defines as legally enforceable within the State. The precise  |
| language "contrary to the welfare" or "reasonable efforts" does not   |
| have to be included in the court ruling, but the order must include   |
| language to the effect that the required finding is rendered. Federal |
| provisions require the judicial determination to be made on a         |
| case-by-case basis; explicitly stated in the court order; signed by a |
| reviewing judge or other State designated court official, if a        |
| signature is required in State law; and in conformity with Federal    |
| timeframes. Affidavits and nunc pro tunc court orders are not         |
| acceptable documentation to support a judicial finding. If an         |
| acceptable court order is not furnished, a transcript of the court    |
| proceeding is the only alternative to substantiate that the judicial  |
| determination requirement is met satisfactorily. If a nunc pro tunc   |
| order or affidavit is presented to meet the "contrary to welfare" or  |
| "reasonable efforts" requirement, the reviewer must examine the court |
| transcript to verify that the judicial determination complies with    |
| the Federal requirements.*                                            |
+-----------------------------------------------------------------------+

***Comments:** (Please reference question number for each comment.)*

+-----------------------------------------------------------------------+
| **C. REMOVAL PURSUANT TO A COURT ORDER** *Continued*                  |
|                                                                       |
| \[Statutory Citation: §§472(a)(1), 471(a)(15)(B)(i); Regulatory       |
| Citation: 45 CFR §1356.21(c)\]                                        |
+-----------------------------------------------------------------------+
| **11. Is there a judicial finding of *Contrary to the Welfare*?**     |
|                                                                       |
| *If the child is voluntarily placed, indicate "N/A" and proceed to    |
| Question 13. Otherwise, indicate "yes" or "no." If "yes," continue    |
| with Question 11a or 11b. If "no," proceed to Question 11c.*          |
|                                                                       |
| *For a judicial removal, there must be a determination to the effect  |
| that continuation in the home would be contrary to the child's        |
| welfare, or that placement is in the child's best interest.*          |
+-----------------------------------------------------------------------+
| > **11(a). If the child is removed from the home before March 27,     |
| > 2000, is the *Contrary to the Welfare* finding stated in a court    |
| > order issued within 6 months of the child's removal?                |
| > [Or]{.underline} is there a removal petition filed within 6 months  |
| > of the child's removal that results in a judicial finding of        |
| > *contrary to the welfare*?**                                        |
|                                                                       |
| **Judicial finding date: (MM/DD/YY)                                   |
| \_\_\_\_/\_\_\_\_\_/\_\_\_\_\_\_**                                    |
|                                                                       |
| **Removal petition date: (MM/DD/YY)                                   |
| \_\_\_\_/\_\_\_\_\_/\_\_\_\_\_\_**                                    |
|                                                                       |
| *[For a removal on or after March 27, 2000:]{.underline} Indicate     |
| "N/A" and proceed to Question 11b.*                                   |
|                                                                       |
| *[For a removal before March 27, 2000]{.underline}: Indicate "yes" or |
| "no" and the judicial finding date or removal petition date. Record   |
| both dates, if available. If the response is "no" to both questions   |
| in Question 11a, this is an error case and the child is ineligible    |
| for the entire foster care episode. Proceed to Question 11c.*         |
|                                                                       |
| *If the judicial finding of "contrary to the welfare" is not rendered |
| within 6 months of the child's removal (Question 8), the requisite    |
| judicial finding may be in a court ruling that stems from court       |
| proceedings initiated (petition filed) no later than 6 months from    |
| the date of the child's removal from the home, consistent with        |
| Departmental Appeals Board Decision Number 1508. The removal petition |
| must be filed with the court within 6 months of the child's removal;  |
| however, the resultant court order may be issued later and must       |
| sustain the removal petition. The removal petition alone will not     |
| satisfy the title IV-E eligibility requirement. There must be a       |
| judicial finding of "contrary to the welfare." Title IV-E eligibility |
| may not begin before the State has attained the requisite judicial    |
| finding and met all other applicable requirements.*                   |
+-----------------------------------------------------------------------+
| > **11(b). If the child is removed from the home on or after March    |
| > 27, 2000, is the *Contrary to the Welfare* finding stated in the    |
| > removal court order?**                                              |
|                                                                       |
| **Judicial finding date*:* (MM/DD/YY)                                 |
| \_\_\_\_/\_\_\_\_\_/\_\_\_\_\_\_\_\_**                                |
|                                                                       |
| *[For a removal before March 27, 2000:]{.underline} Indicate "N/A"    |
| and proceed to Question 11c.*                                         |
|                                                                       |
| *[For a removal on or after March 27, 2000]{.underline}: Indicate     |
| "yes" or "no" and the judicial finding date and proceed to Question   |
| 11c.*                                                                 |
|                                                                       |
| *The judicial determination regarding "contrary to the welfare" must  |
| be made in the first court ruling that sanctions the child's removal. |
| The physical removal from the home must coincide with the judicial    |
| ruling of "contrary to the welfare" (Question 8). If the physical     |
| removal from the home does not coincide with the judicial ruling, the |
| "contrary to welfare" judicial requirement is not met per §472(a)(1)  |
| and the child is not eligible for title IV-E during the entire foster |
| care episode (Question 11c).*                                         |
+-----------------------------------------------------------------------+
| > **11(c). Is the requirement for a judicial finding of *Contrary to  |
| > the\                                                                |
| > Welfare* met?**                                                     |
|                                                                       |
| *Indicate "yes" or "no" based on the response to Question 11, 11a, or |
| 11b. If Question 11c is "no," explain below the specific reason the   |
| requirement is not satisfied.*                                        |
|                                                                       |
| *If the judicial determination is not made as required, this case is  |
| an error case and the child is ineligible for the entire foster care  |
| episode. All ineligible payments must be recorded on the attached     |
| "Improper Payment Chart."*                                            |
+-----------------------------------------------------------------------+

***Comments:** (Please reference question number for each comment.)*

+-----------------------------------------------------------------------+
| **C. REMOVAL PURSUANT TO A COURT ORDER** *Continued*                  |
|                                                                       |
| \[Statutory Citation: §§472(a)(1), 471(a)(15)(B)(i); Regulatory       |
| Citation: 45 CFR §1356.21(c)\]                                        |
+-----------------------------------------------------------------------+
| > **11(d).** **Are title IV-E funds claimed before the month that the |
| > *Contrary to the Welfare* requirement is met?**                     |
|                                                                       |
| #                                                                     |
|                                                                       |
| # *Indicate "yes" or "no" and proceed to Question 12.*                |
|                                                                       |
| *Federal financial participation (FFP) may not begin until the first  |
| day of the month in which all initial eligibility requirements that   |
| must be met are satisfied. (Initial eligibility requirements are:     |
| contrary to the welfare and reasonable efforts to prevent removal     |
| judicial determinations, AFDC eligibility, State agency placement and |
| care responsibility, licensure, and safety.) If title IV-E funds were |
| claimed before the month in which the requisite judicial              |
| determination was made, this is not an error case solely for this     |
| reason; however, all ineligible title IV-E payments must be repaid.   |
| Record ineligible payments on the attached "Improper Payment Chart."* |
+-----------------------------------------------------------------------+
| **12. Is there a judicial finding of *Reasonable Efforts to Prevent   |
| Removal* or *Reasonable Efforts to Reunify Child and Family*?**       |
|                                                                       |
| ####                                                                  |
|                                                                       |
| #### *If the child is voluntarily placed, indicate "N/A" and p        |
| roceed to Question 13. Otherwise, indicate "yes" or "no." If "yes," c |
| ontinue with Question 12a or 12b. If "no," proceed to Question 12c.*  |
|                                                                       |
| *For a judicial removal, there must be a determination to the effect  |
| that the State agency made reasonable efforts to prevent the removal  |
| of the child from the home or that reasonable efforts were not        |
| necessary. If the child was removed before March 27, 2000, the        |
| requirement may be satisfied with a judicial finding that "reasonable |
| efforts were made to reunify" the child and family after removal.*    |
+-----------------------------------------------------------------------+
| **12(a). If the child was removed from the home before March 27,      |
| 2000, what is the date of the judicial finding regarding reasonable   |
| efforts?**                                                            |
|                                                                       |
| **Reasonable efforts to prevent removal date: (MM/DD/YY)              |
| \_\_\_\_/\_\_\_\_\_/\_\_\_\_\_\_**                                    |
|                                                                       |
| **Reasonable efforts to reunify date: (MM/DD/YY)                      |
| \_\_\_\_/\_\_\_\_\_/\_\_\_\_\_\_**                                    |
|                                                                       |
| *[For a removal on or after March 27, 2000:]{.underline} Indicate     |
| "N/A" and proceed to Question 12b.*                                   |
|                                                                       |
| *[For a removal before March 27, 2000]{.underline}: Record the date   |
| of the court ruling that contains the judicial finding. If both       |
| judicial findings were made, record each date and continue with       |
| Question 12c.*                                                        |
|                                                                       |
| *The judicial determination that "reasonable efforts were made to     |
| prevent removal" (or were not required) [or]{.underline} that         |
| "reasonable efforts were made to reunify" the child and family (or    |
| were not required) after removal satisfies this reasonable efforts    |
| requirement.*                                                         |
+-----------------------------------------------------------------------+
| > **12(b).** **If the child was removed from the home on or after     |
| > March 27, 2000, was the judicial finding of *Reasonable Efforts to  |
| > Prevent Removal* within 60 days of the child's removal*?***         |
|                                                                       |
| **Judicial finding date: (MM/DD/YY)                                   |
| \_\_\_\_/\_\_\_\_\_/\_\_\_\_\_\_**                                    |
|                                                                       |
| *[For a removal before March 27, 2000:]{.underline} Indicate "N/A"    |
| and proceed to Question 12c.*                                         |
|                                                                       |
| *[For a removal on or after March 27, 2000]{.underline}: Indicate     |
| "yes" or "no" and the judicial finding date and proceed to Question   |
| 12c.*                                                                 |
|                                                                       |
| *The judicial determination that reasonable efforts to prevent        |
| removal were made (or were not required) must be obtained no later    |
| than 60 days from the date the child was removed from the home        |
| (Question 8).*                                                        |
+-----------------------------------------------------------------------+

***Comments:** (Please reference question number for each comment.)*

+-----------------------------------------------------------------------+
| **C. REMOVAL PURSUANT TO A COURT ORDER** *Continued*                  |
|                                                                       |
| ###  \[Statutory Citation: §§4                                        |
| 72(a)(1), 471(a)(15)(B)(i); Regulatory Citation: 45 CFR §1356.21(c)\] |
+-----------------------------------------------------------------------+
| > **12(c). Is the requirement for a judicial finding of *Reasonable   |
| > Efforts to Prevent Removal* or *Reasonable Efforts to Reunify Child |
| > and Family* met?**                                                  |
|                                                                       |
| *Indicate "yes" or "no" based on the response to Question 12, 12a, or |
| 12b. If Question 12c is "no", this is an error case and the child is  |
| ineligible for the entire foster care episode. Explain below the      |
| specific reason the requirement is not satisfied and record all       |
| ineligible payments on the attached "Improper Payment Chart."*        |
+-----------------------------------------------------------------------+
| > **12(d).** **Are title IV-E funds claimed before the month of the   |
| > judicial finding of *Reasonable Efforts to Prevent Removal* or      |
| > *Reasonable Efforts to Reunify Child and Family*?**                 |
|                                                                       |
| *Indicate "yes" or "no."*                                             |
|                                                                       |
| *Federal financial participation may not begin until the first day of |
| placement in the month in which all initial eligibility requirements  |
| that must be met are satisfied. (Initial eligibility requirements     |
| are: contrary to the welfare and reasonable efforts to prevent        |
| removal judicial determinations, AFDC eligibility, State agency       |
| placement and care responsibility, licensure, and safety.) If title   |
| IV-E was claimed before this finding, this is not an error case       |
| solely for this reason; however, all related ineligible title IV-E    |
| payments must be recorded on the attached "Improper Payment Chart."*  |
+-----------------------------------------------------------------------+
| **D.** **VOLUNTARY PLACEMENTS**                                       |
|                                                                       |
| \[Statutory Citation: §472(d)(e) and (f); Regulatory Citation: 45 CFR |
| §1356.22\]                                                            |
+-----------------------------------------------------------------------+
| **13. Is the child\'s removal pursuant to a voluntary placement       |
| agreement?**                                                          |
|                                                                       |
| *Indicate "yes" or "no." If "no," the response to Questions 14 --     |
| 15(a) is "N/A."*                                                      |
|                                                                       |
| ***Note:** If "no" is the response to this question and Question 10,  |
| the child is ineligible for title IV-E for the entire foster care     |
| episode and the case is an error case. Record any ineligible payments |
| on the attached "Improper Payment Chart" and proceed to Question 17.  |
| For title IV-E eligibility purposes, a child must be removed from the |
| home pursuant to either a judicial order or a voluntary placement     |
| agreement.*                                                           |
+-----------------------------------------------------------------------+
| **14. Is the voluntary placement agreement signed by the parent or    |
| legal\                                                                |
| guardian *and* the State agency?**                                    |
|                                                                       |
| > **Voluntary placement agreement date:** **(MM/DD/YY)**              |
| > \_\_\_\_/\_\_\_\_\_/\_\_\_\_\_\_                                    |
|                                                                       |
| *Indicate "yes" or "no" and the signature date of the agreement. If   |
| signings occurred on different dates, record the date of the final    |
| signature. If the response is "no," this is an error case. Record     |
| ineligible payments on the attached "Improper Payment Chart."*        |
|                                                                       |
| *The parent or legal guardian [and]{.underline} the State agency      |
| representative(s) must sign the voluntary placement agreement for it  |
| to be valid. If all required parties did not sign the voluntary       |
| placement agreement, the child is ineligible for title IV-E for the   |
| entire foster care episode. If title IV-E funds were claimed before   |
| the month in which all signatures are obtained, this is not an error  |
| case solely for this reason. However, the ineligible payments must be |
| recorded on the attached "Improper Payments Chart."*                  |
+-----------------------------------------------------------------------+

***Comments:** (Please reference question number for each comment.)*

+-----------------------------------------------------------------------+
| **D.** **VOLUNTARY PLACEMENTS** *Continued*                           |
|                                                                       |
| \[Statutory Citation: §472(d)(e) and (f); Regulatory Citation: 45 CFR |
| §1356.22\]                                                            |
+-----------------------------------------------------------------------+
| **15. Is there a judicial determination regarding the child\'s *Best  |
| Interest* within 180 days of the placement through a voluntary        |
| placement agreement?**                                                |
|                                                                       |
| **Judicial finding date: (MM/DD/YY)                                   |
| \_\_\_\_/\_\_\_\_\_/\_\_\_\_\_\_**                                    |
|                                                                       |
| *Indicate "yes" or "no" and record the date of the judicial finding.  |
| If "yes," proceed to Question 16. If "no," continue with Question     |
| 15a. Indicate "N/A" and proceed to Question 16, if the judicial       |
| determination is not obtained [and]{.underline} fewer than 180 days   |
| have elapsed since the foster care placement date (or signature date, |
| if the child was constructively removed) and the last day of the PUR. |
| Also, indicate "N/A" if the child is judicially removed.*             |
|                                                                       |
| *Title IV-E payments may be made for a child in foster care because   |
| of a voluntary placement agreement for the first 180 days of the      |
| foster care placement. To extend title IV-E eligibility beyond 180    |
| days, there must be a judicial determination to the effect that       |
| continued voluntary placement is in the child's best interest.*       |
+-----------------------------------------------------------------------+
| > **15(a). If "no," are title IV-E funds claimed for the period of\   |
| > ineligibility?**                                                    |
|                                                                       |
| *Indicate "yes" or "no," based on a "no" response to Question 15. If  |
| Question 15a is "yes," this is an error case if IV-E funds are        |
| claimed for a period of ineligibility that falls within the PUR.      |
| Record the ineligible payments on the attached "Improper Payment      |
| Chart" and proceed to Question 16.*                                   |
|                                                                       |
| *If more than 180 days has elapsed and there has been no judicial     |
| determination of "best interests," the child\'s eligibility for title |
| IV-E ceases on the 181^st^ day.*                                      |
+-----------------------------------------------------------------------+
| **E. ONGOING JUDICIAL ACTIVITY (Reasonable Efforts to Finalize the    |
| Permanency Plan)**                                                    |
|                                                                       |
| #######  Applicable to Court-Ordered Removals Only                    |
|                                                                       |
| \[Statutory Citation: §§472(a)(1), 471(a)(15)(B)(ii) and (C);         |
| Regulatory Citation: 45 CFR §1356.21(b)(2)\]                          |
+-----------------------------------------------------------------------+
| **For Questions 16, 16a, 16b, 16c, 16d, and 16e:** *Each question     |
| must be answered in sequential order to verify that the judicial      |
| determination of "reasonable efforts to finalize the permanency plan" |
| is satisfied for the 12-month period that encompasses the PUR.*       |
|                                                                       |
| *To maintain eligibility following removal, there must be a judicial  |
| determination that reasonable efforts were made to finalize the       |
| child\'s permanency plan. The judicial determination must be made on  |
| a case-by-case basis; definitively stated in the court order; signed  |
| by a reviewing judge or other State designated court official, if a   |
| signature is required in State law; and in conformity with regulatory |
| timeframes. Affidavits and nunc pro tunc court orders are not         |
| acceptable documentation to support a judicial finding. If an         |
| acceptable court order is not furnished, a transcript of the court    |
| proceeding is the only alternative to substantiate that the judicial  |
| determination requirement is met satisfactorily. If a nunc pro tunc   |
| order or affidavit is presented to meet the "reasonable efforts"      |
| requirement, the reviewer must examine the court transcript to verify |
| that the judicial determination complies with the Federal             |
| requirements.*                                                        |
|                                                                       |
| *[For a removal before March 27, 2000]{.underline}: The judicial      |
| determination must have occurred [by March 27, 2001]{.underline}, and |
| at least once every 12 months thereafter, while the child is in       |
| foster care. Ineligibility for title IV-E payments is from April 1,   |
| 2001, until the judicial determination requirement is met. The        |
| reviewer is [not]{.underline} required to verify the State agency's   |
| compliance with the March 27, 2001, implementation date as a separate |
| eligibility review issue. The reviewer [is]{.underline} required to   |
| verify whether the judicial determination requirement is              |
| satisfactorily met during the PUR to ascertain that the case is not   |
| in error. If the judicial determination requirement is not met, then  |
| the reviewer must go back to the date the requirement is met or March |
| 27, 2001, whichever is later, to establish the period of              |
| ineligibility.*                                                       |
|                                                                       |
| *[For a removal on or after March 27, 2000:]{.underline} The judicial |
| determination must be made no later than 12 months from the date that |
| the child is considered to have entered foster care (Question 9).     |
| Thereafter, the judicial determination must be made at least once     |
| every 12 months while the child is in foster care.*                   |
+-----------------------------------------------------------------------+

***Comments:** (Please reference question number for each comment.)*

+-------------------+----------------+-------------------+------------+
| **E. ONGOING      |                |                   |            |
| JUDICIAL          |                |                   |            |
| ACTIVITY**        |                |                   |            |
| *Continued*       |                |                   |            |
|                   |                |                   |            |
| > **(Reasonable   |                |                   |            |
| > Efforts to      |                |                   |            |
| > Finalize the    |                |                   |            |
| > Permanency      |                |                   |            |
| > Plan)**         |                |                   |            |
|                   |                |                   |            |
| ###### \[St       |                |                   |            |
| atutory Citation: |                |                   |            |
|  §§472(a)(1), 471 |                |                   |            |
| (a)(15)(B)(ii) an |                |                   |            |
| d (C); Regulatory |                |                   |            |
|  Citation: 45 CFR |                |                   |            |
|  §1356.21(b)(2)\] |                |                   |            |
+-------------------+----------------+-------------------+------------+
| *Record           |                |                   |            |
| information in    |                |                   |            |
| the following     |                |                   |            |
| chart to          |                |                   |            |
| determine the     |                |                   |            |
| most recent       |                |                   |            |
| judicial finding  |                |                   |            |
| that is attained  |                |                   |            |
| prior to the PUR  |                |                   |            |
| and whether a     |                |                   |            |
| judicial finding  |                |                   |            |
| is required to be |                |                   |            |
| made during the   |                |                   |            |
| 12-month period   |                |                   |            |
| encompassing the  |                |                   |            |
| PUR. Use an       |                |                   |            |
| additional sheet  |                |                   |            |
| if necessary. The |                |                   |            |
| data are needed   |                |                   |            |
| to answer         |                |                   |            |
| Questions 16(a)   |                |                   |            |
| -- 16(e) for all  |                |                   |            |
| sample cases      |                |                   |            |
| regardless of     |                |                   |            |
| removal date. For |                |                   |            |
| any period in     |                |                   |            |
| which a judicial  |                |                   |            |
| determination is  |                |                   |            |
| not met as        |                |                   |            |
| required, record  |                |                   |            |
| the related       |                |                   |            |
| ineligible        |                |                   |            |
| payments on the   |                |                   |            |
| attached          |                |                   |            |
| "Improper Payment |                |                   |            |
| Chart."*          |                |                   |            |
|                   |                |                   |            |
| ####              |                |                   |            |
| ## Periodicity Ch |                |                   |            |
| art for Judicial  |                |                   |            |
| Determinations of |                |                   |            |
|  Reasonable Effor |                |                   |            |
| ts to Finalize th |                |                   |            |
| e Permanency Plan |                |                   |            |
+-------------------+----------------+-------------------+------------+
| #####             |                |                   |            |
| # Date Removed: \ |                |                   |            |
| _\_\_\_\_\_/\_\_\ |                |                   |            |
| _\_\_\_/\_\_\_\_\ |                |                   |            |
| _\_ Date Entered  |                |                   |            |
| Foster Care: \_\_ |                |                   |            |
| \_\_\_\_/\_\_\_\_ |                |                   |            |
| \_\_/\_\_\_\_\_\_ |                |                   |            |
|                   |                |                   |            |
| ######            |                |                   |            |
|  *(Refer to Quest |                |                   |            |
| ion 8)* (Removal  |                |                   |            |
| on or after March |                |                   |            |
|  27, 2000) *(Refe |                |                   |            |
| r to Question 9)* |                |                   |            |
+-------------------+----------------+-------------------+------------+
| ###### Judic      | #              | **Date Made**     | **Is It    |
| ial Determination | ##### Date Due |                   | Timely?**  |
|                   |                |                   |            |
|                   |                |                   | **(YES or  |
|                   |                |                   | NO)**      |
+-------------------+----------------+-------------------+------------+
| ######            | ######         | ######            | ######     |
+-------------------+----------------+-------------------+------------+
| ######            | ######         | ######            | ######     |
+-------------------+----------------+-------------------+------------+
| ######            | ######         | ######            | ######     |
+-------------------+----------------+-------------------+------------+
| ######            | ######         | ######            | ######     |
+-------------------+----------------+-------------------+------------+
| ######            | ######         | ######            | ######     |
+-------------------+----------------+-------------------+------------+
| **16. Has the     |                |                   |            |
| child been in     |                |                   |            |
| foster care 12    |                |                   |            |
| months or more    |                |                   |            |
| [be               |                |                   |            |
| fore]{.underline} |                |                   |            |
| the end of\       |                |                   |            |
| the PUR?**        |                |                   |            |
|                   |                |                   |            |
| ###### *          |                |                   |            |
| Indicate "N/A," i |                |                   |            |
| f the removal is  |                |                   |            |
| the result of a v |                |                   |            |
| oluntary placemen |                |                   |            |
| t agreement. Othe |                |                   |            |
| rwise, indicate " |                |                   |            |
| yes" or "no." If  |                |                   |            |
| "yes," continue w |                |                   |            |
| ith Question 16a. |                |                   |            |
|  If "no," a judic |                |                   |            |
| ial determination |                |                   |            |
|  of "reasonable e |                |                   |            |
| fforts to finaliz |                |                   |            |
| e the permanency  |                |                   |            |
| plan" is not due  |                |                   |            |
| for the PUR. Proc |                |                   |            |
| eed to Question 1 |                |                   |            |
| 7. Questions 16a  |                |                   |            |
| --16e are "N/A."* |                |                   |            |
+-------------------+----------------+-------------------+------------+
| **16(a). If       |                |                   |            |
| Question 16 is    |                |                   |            |
| "yes," what is    |                |                   |            |
| the date of the   |                |                   |            |
| most recent       |                |                   |            |
| judicial          |                |                   |            |
| determination of  |                |                   |            |
| *Reasonable       |                |                   |            |
| Efforts to        |                |                   |            |
| Finalize* made    |                |                   |            |
| before the PUR?** |                |                   |            |
|                   |                |                   |            |
| > **(MM/DD/YY):   |                |                   |            |
| > \_              |                |                   |            |
| \_\_\_/\_\_\_\_\_ |                |                   |            |
| \_/\_\_\_\_\_\_** |                |                   |            |
|                   |                |                   |            |
| *Record the date  |                |                   |            |
| of the most       |                |                   |            |
| recent judicial   |                |                   |            |
| determination     |                |                   |            |
| that is obtained  |                |                   |            |
| before the        |                |                   |            |
| beginning of the  |                |                   |            |
| PUR. If the [date |                |                   |            |
| of the initial    |                |                   |            |
| judicial          |                |                   |            |
| determination     |                |                   |            |
| fell within the   |                |                   |            |
| PUR]{.underline}, |                |                   |            |
| indicate "N/A."   |                |                   |            |
| If the [due date  |                |                   |            |
| for the judicial  |                |                   |            |
| determination is  |                |                   |            |
| immediately       |                |                   |            |
| before the PUR    |                |                   |            |
| but is not        |                |                   |            |
| m                 |                |                   |            |
| ade]{.underline}, |                |                   |            |
| indicate "N/A."   |                |                   |            |
| Explain below the |                |                   |            |
| "N/A" response    |                |                   |            |
| and continue with |                |                   |            |
| Question 16b.*    |                |                   |            |
|                   |                |                   |            |
| ######            |                |                   |            |
|  *Question 16a es |                |                   |            |
| tablishes whether |                |                   |            |
|  an initial or su |                |                   |            |
| bsequent judicial |                |                   |            |
|  finding is requi |                |                   |            |
| red to be made du |                |                   |            |
| ring the 12-month |                |                   |            |
|  period that enco |                |                   |            |
| mpasses the PUR.* |                |                   |            |
+-------------------+----------------+-------------------+------------+
| **16(b). What is  |                |                   |            |
| the due date of   |                |                   |            |
| the subsequent    |                |                   |            |
| judicial          |                |                   |            |
| determination\    |                |                   |            |
| that encompasses  |                |                   |            |
| the PUR?**        |                |                   |            |
|                   |                |                   |            |
| **(MM/DD/YY):     |                |                   |            |
| \_                |                |                   |            |
| \_\_\_/\_\_\_\_\_ |                |                   |            |
| \_/\_\_\_\_\_\_** |                |                   |            |
|                   |                |                   |            |
| #                 |                |                   |            |
| ##### *Record the |                |                   |            |
|  date of the [sub |                |                   |            |
| sequent]{.underli |                |                   |            |
| ne} judicial dete |                |                   |            |
| rmination that mu |                |                   |            |
| st be made within |                |                   |            |
|  12 months from t |                |                   |            |
| he date recorded  |                |                   |            |
| in Question 16a.  |                |                   |            |
| If the child has  |                |                   |            |
| been in care for  |                |                   |            |
| less than 18 mont |                |                   |            |
| hs but more than  |                |                   |            |
| 12 months before  |                |                   |            |
| the end of the PU |                |                   |            |
| R, record the dat |                |                   |            |
| e of the [initial |                |                   |            |
| ]{.underline} jud |                |                   |            |
| icial determinati |                |                   |            |
| on. If a [date is |                |                   |            |
|  not recorded in  |                |                   |            |
| Question 16a]{.un |                |                   |            |
| derline} because  |                |                   |            |
| the required judi |                |                   |            |
| cial determinatio |                |                   |            |
| n is not made bef |                |                   |            |
| ore the PUR, reco |                |                   |            |
| rd the date it sh |                |                   |            |
| ould have been ma |                |                   |            |
| de and continue w |                |                   |            |
| ith Question 16c. |                |                   |            |
|  Indicate "N/A,"  |                |                   |            |
| if 12 months have |                |                   |            |
|  not elapsed sinc |                |                   |            |
| e the date record |                |                   |            |
| ed in Question 16 |                |                   |            |
| a or have elapsed |                |                   |            |
|  after the PUR.*  |                |                   |            |
+-------------------+----------------+-------------------+------------+

***Comments:** (Please reference question number for each comment.)*

+-----------------------------------------------------------------------+
| **E. ONGOING JUDICIAL ACTIVITY** *Continued\                          |
| ***(Reasonable Efforts to Finalize the Permanency Plan)\              |
| **\[Statutory Citation: §§472(a)(1), 471(a)(15)(B)(ii) and (C);       |
| Regulatory Citation: 45 CFR §1356.21(b)(2)\]                          |
+-----------------------------------------------------------------------+
| **16(c). What is the date that the judicial determination is made?**  |
|                                                                       |
| **(MM/DD/YY): \_\_\_\_/\_\_\_\_\_\_/\_\_\_\_\_\_**                    |
|                                                                       |
| *Record the date that the initial or subsequent judicial              |
| determination [referenced in Question 16b]{.underline} is made. If    |
| the judicial determination is due but not made, indicate this in the  |
| space provided below and continue with Question 16d.*                 |
+-----------------------------------------------------------------------+
| **16(d). Is the judicial determination of *Reasonable Efforts to      |
| Finalize*\                                                            |
| timely?**                                                             |
|                                                                       |
| *Indicate "yes" or "no." If the judicial determination [referenced in |
| Question 16c]{.underline} is timely, proceed to Question 17           |
| (Question16e is "N/A"). If it is not timely, continue with Question   |
| 16e.*                                                                 |
|                                                                       |
| *A judicial determination is not considered timely if the finding is  |
| not made within the required 12-month timeframe. The date of the      |
| latest judicial determination is used to determine the date the       |
| subsequent one must be made.*                                         |
+-----------------------------------------------------------------------+
| **16(e). If Question 16d is "no," are there ineligible title IV-E     |
| funds that were claimed as a result of the untimely judicial          |
| determination?**                                                      |
|                                                                       |
| *Indicate "yes" or "no" based on the response to Question 16d. If     |
| title IV-E funds were claimed for the untimely judicial determination |
| referenced in Question 16d, record the ineligible payments on the     |
| attached Improper Payment Chart. An untimely judicial determination   |
| renders the child ineligible beginning the first day of the month     |
| [after]{.underline} it is due and continuing to the first day of the  |
| month it is attained.*                                                |
|                                                                       |
| *The sample case is **in error** if title IV-E funds are claimed      |
| **and** the required judicial determination that encompasses the PUR  |
| is due before or during the PUR, and is: 1) [not made]{.underline}    |
| during the PUR, or 2) [not made, during the PUR, within 30 days       |
| following the month it is due.]{.underline}*                          |
+-----------------------------------------------------------------------+
| **F.** **AFDC (Aid to Families with Dependent Children) ELIGIBILITY** |
|                                                                       |
| \[Statutory Citation: §§472(a)(1) and (4); Regulatory Citation: 45    |
| CFR §1356.21(k)(l)\]                                                  |
+-----------------------------------------------------------------------+
| **17. Was the child removed from the home of a specified relative?**  |
|                                                                       |
| *Indicate "yes" or "no." If "no," the child is ineligible for title   |
| IV-E for the entire foster care episode.*                             |
|                                                                       |
| *To qualify for title IV-E, a removal of the child from a specified   |
| relative must occur (45 CFR §1356.21(k)). A specified relative may be |
| a parent or any relation by blood, marriage, or adoption who is       |
| within the fifth degree of kinship to the child (45 CFR               |
| §233(c)(1)(v)).*                                                      |
+-----------------------------------------------------------------------+
| **18. Did the child live with the specified relative within 6 months  |
| of\                                                                   |
| removal?**                                                            |
|                                                                       |
| **Last lived with date: (MM/DD/YY)                                    |
| \_\_\_\_/\_\_\_\_\_\_/\_\_\_\_\_\_**                                  |
|                                                                       |
| *Record the date the child last lived with the specified relative     |
| before removal (Question 8), and indicate "yes" or "no." If the child |
| lived with an interim caretaker more than 6 months before the removal |
| from the specified relative, the child is ineligible for the entire   |
| foster care episode.*                                                 |
|                                                                       |
| *A child must have lived with the specified relative at some point    |
| during the 6 months before the signing of the voluntary placement     |
| agreement or initiation of court proceedings (removal petition). The  |
| date of the removal court order may be used if a removal petition is  |
| not filed or is filed after the removal court order. Federal statutes |
| allow a 6-month period during which the child may reside with an      |
| interim caretaker and be eligible for title IV-E.*                    |
+-----------------------------------------------------------------------+

***Comments:** (Please reference question number for each comment.)*

+-----------------------------------------------------------------------+
| **F. AFDC ELIGIBILITY** *Continued*                                   |
|                                                                       |
| \[Statutory Citation: §§472(a)(1) and (4); Regulatory Citation: 45    |
| CFR §1356.71(d)(1)(v)\]                                               |
+-----------------------------------------------------------------------+
| **19. Was the child living with and removed from the same specified\  |
| relative?**                                                           |
|                                                                       |
| *Indicate "yes," if the "living with" and "removal from" requirements |
| are met by the same specified relative. Otherwise indicate "no." If   |
| "no," the child is ineligible [unless]{.underline} at removal the     |
| child: 1) resided in a State within the jurisdiction of the Ninth     |
| Circuit Court of Appeals, and 2) was removed after the State's title  |
| IV-E plan was approved to implement the "Rosales" court decision. If  |
| the response is "no" and both conditions of the "Rosales" provisions  |
| are not met, the child is ineligible for the entire foster care       |
| episode.*                                                             |
|                                                                       |
| *The court decision in* Rosales v. Thompson*, permits States in the   |
| Ninth Circuit to base AFDC eligibility on the home from which the     |
| child was removed [or]{.underline} the home of any specified relative |
| with whom the child lived with at some point in the 6 months before   |
| removal. The Rosales court decision may not be applied for a child    |
| removed before the date the State's title IV-E plan is approved to    |
| implement the provision. The Rosales court decision does not apply to |
| States outside the jurisdiction of the Ninth Circuit Court.*          |
+-----------------------------------------------------------------------+
| **20. Did the State determine the child's AFDC eligibility based on   |
| the specified relative's home for the month the voluntary placement   |
| agreement was entered into or the removal petition was filed?**       |
|                                                                       |
| > **AFDC eligibility month: (MM/YY) \_\_\_\_\_\_/\_\_\_\_\_\_\_**     |
|                                                                       |
| *Indicate "yes" or "no" and record the first month of AFDC            |
| eligibility for the foster care episode, not the month in which the   |
| eligibility determination is completed. If "no," the child is         |
| ineligible for title IV-E for the entire foster care episode.*        |
|                                                                       |
| *The eligibility process examines the family situation in the home of |
| the specified relative during the month the voluntary placement       |
| agreement is signed, or the removal petition is filed, to determine   |
| whether the child is AFDC eligible for that month, using the State's  |
| AFDC Plan as in effect on July 16, 1996, or earlier, if the removal   |
| is before this date. The date of the removal court order may be used  |
| if a removal petition is not filed or is filed after the removal      |
| order. The reviewer must examine the State agency's worksheets and    |
| supporting material to verify that the agency has made the correct    |
| eligibility decision and the basis of the decision has been clearly   |
| documented.*                                                          |
+-----------------------------------------------------------------------+
| **20(a). Was financial need established?**                            |
|                                                                       |
| #### *Indicate "yes" or "no." I                                       |
| f "no," the child is ineligible for the entire foster care episode.*  |
|                                                                       |
| *There must be documentation that financial eligibility is reviewed   |
| and a correct determination is made. The child's financial need must  |
| be established based on the circumstances in the specified relative's |
| home during the month the voluntary placement agreement is signed, or |
| the removal petition is filed. Within the specified relative's home,  |
| the gross income must not exceed the State's need standard and the    |
| combined resources available to the family unit must not exceed       |
| \$10,000.*                                                            |
+-----------------------------------------------------------------------+
| #### 20(b). Was deprivation of parental support or care established?  |
|                                                                       |
| #### *Indicate "yes" or "no." I                                       |
| f "no," the child is ineligible for the entire foster care episode.*  |
|                                                                       |
| *There must be a specification of how the child is deprived of        |
| parental support or care. To correctly establish deprivation,         |
| deprivation must be due to the death, absence, or physical or mental  |
| incapacity of one parent or unemployment of the principal wage        |
| earner. The initial determination of deprivation is based on the      |
| conditions in the specified relative's home during the month the      |
| voluntary placement agreement is signed or the removal petition is    |
| filed.*                                                               |
+-----------------------------------------------------------------------+

***Comments:** (Please reference question number for each comment.)*

+-----------------------------------------------------------------------+
| **F. AFDC ELIGIBILITY** *Continued*                                   |
|                                                                       |
| \[Statutory Citation: §§472(a)(1) and (4); Regulatory Citation: 45    |
| CFR §1356.71(d)(1)(v)\]                                               |
+-----------------------------------------------------------------------+
| **21. Is the child 18 years or older at the time of removal or at any |
| point\                                                                |
| during the PUR?**                                                     |
|                                                                       |
| *Indicate "yes" or "no." If "yes," continue with Question 21a. If     |
| "no," indicate "N/A" for Question 21a-21c and proceed to Question     |
| 22.*                                                                  |
|                                                                       |
| *Sections 406 and 472 of the Act limit title IV-E eligibility to      |
| children under the age of 18, or over age 18 but under age 19, if a   |
| full-time student. When a child reaches his or her 18^th^ birthday,   |
| eligibility for AFDC ceases unless, as a title IV-A State plan        |
| option, the youth is a full-time student in a secondary school or its |
| equivalent and is expected to complete the program before age 19.*    |
+-----------------------------------------------------------------------+
| **21(a). Has the State agency exercised the school attendance         |
| option?**                                                             |
|                                                                       |
| *Indicate "yes" or "no." If "no" and title IV-E funds were claimed    |
| for the youth who is over age 18, title IV-E funds were claimed       |
| improperly. This is not an error case for this reason; however, the   |
| ineligible payments must be recorded on the attached "Improper        |
| Payments Chart."*                                                     |
|                                                                       |
| *If the State agency exercises this option within its approved AFDC   |
| State plan, eligibility for AFDC ceases at the end of the month in    |
| which the youth leaves school or when the youth turns 19, whichever   |
| occurs earlier. If the State agency does not exercise this option,    |
| eligibility for AFDC ceases at the end of the month the youth turns   |
| 18.*                                                                  |
+-----------------------------------------------------------------------+
| > **21(b). Is the youth a full-time student in a secondary school or  |
| > its\                                                                |
| > equivalent?**                                                       |
|                                                                       |
| *Indicate "yes" or "no" based on a "yes" response to Question 21. If  |
| Question 21b is "no" the child is ineligible for title IV-E. If title |
| IV-E funds were claimed for any month during the PUR, this is an      |
| error case.*                                                          |
+-----------------------------------------------------------------------+
| **21(c). Is the youth expected to graduate before his/her 19^th^      |
| birthday?**                                                           |
|                                                                       |
| *Indicate "yes" or "no" based on a "yes" response to Question 21. If  |
| Question 21c is "no" the child is ineligible for title IV-E. If title |
| IV-E funds were claimed for any month during the PUR, this is an      |
| error case.*                                                          |
+-----------------------------------------------------------------------+
| **22. If the child did not meet the AFDC requirements for initial     |
| eligibility, are title IV-E funds claimed for the period of           |
| ineligibility?**                                                      |
|                                                                       |
| *Indicate "yes" or "no," if the response is "no" to Questions 17, 18, |
| 19, 20, 20a, 20b, 21b, or 21c. If Question 22 is "yes," this is an    |
| error case. Record ineligible payments on the attached "Improper      |
| Payment Chart." Indicate "N/A," if the AFDC requirements for initial  |
| eligibility are met.*                                                 |
|                                                                       |
| *To qualify for AFDC, the State agency must establish and document    |
| for the removal month that the child was: living with and removed     |
| from the home of a specified relative (Questions 17 -19);             |
| AFDC-eligible in the specified relative's home (Question 20);         |
| financially needy (Question 20a); deprived of parental support and    |
| care (Question 20b); and under the age of 18 or at the State's option |
| under the age of 19, a full-time student, and expected to graduate    |
| before age 19 (Questions 21 -- 21c).*                                 |
+-----------------------------------------------------------------------+
| **23. Is the child's eligibility for AFDC re-determined?**            |
|                                                                       |
| **Re-determination period (MM/YY): from \_\_\_\_\_\_/\_\_\_\_\_ to    |
| \_\_\_\_\_\_/\_\_\_\_\_\_**                                           |
|                                                                       |
| > **from \_\_\_\_\_\_/\_\_\_\_\_ to \_\_\_\_\_\_/\_\_\_\_\_\_**       |
|                                                                       |
| *Indicate "N/A," if the child is in foster care less than 1 year      |
| before the end of the PUR and proceed to Question 24. Otherwise,      |
| indicate "yes" or "no." If "yes," record the period(s) that encompass |
| the PUR for which a re-determination of eligibility is completed and  |
| continue with Question 23a.*                                          |
|                                                                       |
| *The State agency annually must document that the child continues to  |
| be financially needy and deprived of parental support or care,        |
| according to the State agency's title IV-A plan in effect on July 16, |
| 1996. The requirement to re-determine AFDC eligibility is a State     |
| plan provision and the State agency may reconstruct the child's       |
| circumstances to establish eligibility for the period in question.*   |
+-----------------------------------------------------------------------+

***Comments:** (Please reference question number for each comment.)*

+-----------------------------------------------------------------------+
| **F. AFDC ELIGIBILITY** *Continued*                                   |
|                                                                       |
| \[Statutory Citation: §§472(a)(1) and (4); Regulatory Citation: 45    |
| CFR §1356.71(d)(1)(v)\]                                               |
+-----------------------------------------------------------------------+
| **23(a). Has financial need existed throughout the PUR?**             |
|                                                                       |
| *Indicate "yes" or "no" and proceed to Question 23b.*                 |
|                                                                       |
| *The basis for the subsequent determination of financial need is the  |
| child in foster care as his own assistance unit. Only those income    |
| and resource factors germane to the child's situation are             |
| considered.*                                                          |
+-----------------------------------------------------------------------+
| **23(b). Has deprivation existed throughout the PUR?**                |
|                                                                       |
| *Indicate "yes" or "no." If "yes," proceed to Question 24. If "no,"   |
| continue with Question 23c.*                                          |
|                                                                       |
| *The basis for the subsequent determination of deprivation is the     |
| home from which the child was removed. If the situation in that home  |
| changed so that deprivation no longer exists for the child, the child |
| is no longer eligible for AFDC.*                                      |
+-----------------------------------------------------------------------+
| > **23(c). If "no," are title IV-E funds claimed for the period of\   |
| > ineligibility?**                                                    |
|                                                                       |
| *Indicate "yes" or "no" based on a "no" response to Question 23a or   |
| Question 23b. If the response to Question 23c is "yes," and the       |
| ineligible period occurred during the PUR, this is an error case.     |
| Record any ineligible payment on the attached "Improper Payment       |
| Chart."*                                                              |
+-----------------------------------------------------------------------+
| **G. STATE AGENCY RESPONSIBILITY FOR PLACEMENT/CARE**                 |
|                                                                       |
| \[Statutory Citation: §472(a)(2); Regulatory Citation: 45 CFR         |
| §1356.71(d)(1)(iii)\]                                                 |
+-----------------------------------------------------------------------+
| **24. For the entire time that the child is in an out-of-home         |
| placement during the period under review, does the title IV-E agency  |
| (or public agency with a title IV-E agreement) maintain               |
| responsibility for the**                                              |
|                                                                       |
| **placement and care of the child?**                                  |
|                                                                       |
| *Indicate "yes" or "no." If "yes," proceed to Question 26. If "no,"   |
| continue with Question 25.*                                           |
|                                                                       |
| *The title IV-E agency (or another public agency, including an Indian |
| tribe, with which the title IV-E agency has a written agreement that  |
| is in effect) must have responsibility for placement and care of the  |
| child. The court order, court transcript, or voluntary placement      |
| agreement must indicate that the agency has this responsibility.*     |
+-----------------------------------------------------------------------+
| **25. If "no," were title IV-E funds claimed for the period of time   |
| that the title IV-E agency (or public agency with a title IV-E        |
| agreement*) did not* have responsibility for the placement and care   |
| of the child?**                                                       |
|                                                                       |
| *If the response to Question 24 is "no," were title IV-E funds        |
| claimed for the period of ineligibility? If "yes," this child is      |
| ineligible. The case is an error case if the ineligible payments      |
| occurred during the PUR. Record ineligible payments on the attached   |
| "Improper Payment Chart."*                                            |
+-----------------------------------------------------------------------+
| **26. Agency Name:                                                    |
| \_\_\_\_\_\_\_\_\_\_\_\_\_\                                           |
| _\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_** |
|                                                                       |
| *Record the name of the title IV-E agency or other agency with        |
| responsibility for placement and care of the child during the PUR.*   |
+-----------------------------------------------------------------------+

***Comments:** (Please reference question number for each comment.)*

+-----------------------------------------------------------------------+
| **H. PLACEMENT IN LICENSED FOSTER CARE FACILITY**                     |
|                                                                       |
| \[Regulatory Citation: §472(b) and (c); (45 CFR §§1356.71(d)(1)(iv),  |
| 1355.20\]                                                             |
|                                                                       |
| **Complete for [every]{.underline} foster care facility where the     |
| child resided during the PUR**                                        |
+-----------------------------------------------------------------------+
| **X2. Provider Name:**                                                |
|                                                                       |
| **X3. Provider Street Address:**                                      |
|                                                                       |
| **X4. Provider City:** **X5. Provider State:**                        |
+-----------------------------------------------------------------------+
| ***For Questions X2 --- X5:** Record provider information for each    |
| foster family home or childcare institution where the child           |
| physically resided during the PUR. Use additional sheets to record    |
| each provider separately.*                                            |
+-----------------------------------------------------------------------+
| **27. Date(s) of child's placement in this foster care facility       |
| (MM/DD/YY):**                                                         |
|                                                                       |
| **from \_\_\_\_/\_\_\_\_\_\_/\_\_\_\_\_\_ to                          |
| \_\_\_\_/\_\_\_\_\_\_/\_\_\_\_\_\_**                                  |
|                                                                       |
| > **from \_\_\_\_/\_\_\_\_\_\_/\_\_\_\_\_\_ to                        |
| > \_\_\_\_/\_\_\_\_\_\_/\_\_\_\_\_\_**                                |
|                                                                       |
| *Record the date(s) that the child lived in the facility during the   |
| PUR.*                                                                 |
+-----------------------------------------------------------------------+
| **28. Type of foster care facility** *(check one)***: □ FFH □ GH □    |
| Public Institution □ PNP/FP Institution**                             |
|                                                                       |
| **□ Other** *(specify)*                                               |
| **\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_**                  |
|                                                                       |
| ####                                                                  |
|                                                                       |
| #### *Indi                                                            |
| cate the type of facility in which the child has lived during the PUR |
| . The "Other" category should be used when the child has not lived in |
|  one of the facility types listed. If "Other," the child is ineligibl |
| e for title IV-E funding. If ineligible payments are claimed during t |
| he PUR, the case is an error case. Record all ineligible payments on  |
| the attached "Improper Payment Chart" and continue with Question 29.* |
|                                                                       |
| *Federal regulations at 45 CFR §1355.20(a) define an eligible foster  |
| care facility as a foster family home (FFH), group home (GH), public  |
| institution of 25 children or fewer, private non-profit (PNP)         |
| childcare institution or for-profit (FP) childcare institution. A     |
| facility that does not fall into one of these categories is not       |
| eligible for Federal foster care maintenance payments. This includes  |
| detention centers, hospitals, public institutions of more than 25     |
| children, and pre-adoptive family homes that are not licensed as      |
| foster family homes.*                                                 |
+-----------------------------------------------------------------------+
| **29. Is this foster care provider *fully* licensed during the        |
| child's placement\                                                    |
| that falls within the PUR?**                                          |
|                                                                       |
| **Licensure period (MM/DD/YY): from \_\_\_\_/\_\_\_\_\_\_/\_\_\_\_\_  |
| to \_\_\_\_/\_\_\_\_\_\_/\_\_\_\_\_**                                 |
|                                                                       |
| **from \_\_\_\_/\_\_\_\_\_\_/\_\_\_\_\_ to                            |
| \_\_\_\_/\_\_\_\_\_\_/\_\_\_\_\_**                                    |
|                                                                       |
| *Indicate "yes" or "no" and record the dates of the period of         |
| licensure that covers the entire PUR. If "yes," indicate "N/A" for    |
| Question 29a and proceed to Question 30. If "no," continue with       |
| Question 29a.*                                                        |
|                                                                       |
| *The State agency must document that the child's foster care          |
| placement is fully licensed or approved for the child's placement     |
| during the PUR, even when the placement is an out-of-State provider.  |
| Interim licenses or approvals issued pending full satisfaction of a   |
| State licensing standard are not acceptable for title IV-E.*          |
+-----------------------------------------------------------------------+

***Comments:** (Please reference question number for each comment.)*

+-----------------------------------------------------------------------+
| **H. PLACEMENT IN LICENSED FOSTER CARE FACILITY** *Continued*         |
|                                                                       |
| \[Regulatory Citation: §472(b) and (c); (45 CFR §§1356.71(d)(1)(iv),  |
| 1355.20\]                                                             |
|                                                                       |
| **Complete for [every]{.underline} foster care facility where the     |
| child resided during the PUR**                                        |
+-----------------------------------------------------------------------+
| > **29a. If "no," are title IV-E funds claimed for the period that    |
| > the foster care provider is not *fully* licensed?**                 |
|                                                                       |
| *If Question 29 is "no," indicate "yes" or "no" for Question 29a and  |
| continue with Question 30. If Question 29a is "yes" and the           |
| ineligible title IV-E funds are* *claimed for a period that falls     |
| within the PUR, this is an error case. Record any ineligible payments |
| on the attached "Improper Payment Chart."*                            |
|                                                                       |
| *[For a foster family home licensed before March 27,                  |
| 2000:]{.underline} Beginning October 1, 2000, must meet full          |
| licensure.*                                                           |
|                                                                       |
| *[For a foster family home licensed on or after March 27,             |
| 2000:]{.underline} Beginning April 1, 2000, must meet full            |
| licensure.*                                                           |
|                                                                       |
| *[For childcare institutions:]{.underline} Regardless of licensing    |
| date, must meet full licensure.*                                      |
+-----------------------------------------------------------------------+
| **30. Are title IV-E funds claimed before the month in which the      |
| foster care\                                                          |
| provider is *fully* licensed?**                                       |
|                                                                       |
| *Indicate "yes" or "no" and proceed to Question 31.*                  |
|                                                                       |
| *Federal financial participation may not begin until the first day of |
| the month in which full compliance with the State's licensing         |
| standards are met. If title IV-E is claimed before then, this is not  |
| an error case; however, ineligible title IV-E payments must be        |
| recorded on the attached "Improper Payment Chart."*                   |
+-----------------------------------------------------------------------+
| **I. SAFETY REQUIREMENTS OF PROVIDER\                                 |
| ** \[Regulatory Citation: §472(b) and (c); (45 CFR                    |
| §§1356.71(d)(1)(iv), 1355.20\]\                                       |
| **Complete for [every]{.underline} foster care facility where the     |
| child resided during the PUR**                                        |
+-----------------------------------------------------------------------+
| **31. If the placement is a foster family home, has the State "opted  |
| out" of the criminal records check requirement for prospective foster |
| family homes?**                                                       |
|                                                                       |
| *Indicate "N/A," if the placement during the PUR is not a foster      |
| family home and proceed to Question 32. Otherwise, indicate "yes" or  |
| "no." If "yes," proceed to Question 31(b). If "no," continue with     |
| Question 31(a).*                                                      |
+-----------------------------------------------------------------------+
| > **31(a). If the State has not "opted out," is a criminal records    |
| > check completed satisfactorily on the prospective foster parent?**  |
|                                                                       |
| *Indicate "N/A," if the State "opted out" or the foster family home   |
| is licensed [before November 17, 1997]{.underline}. Otherwise,        |
| indicate "yes" or "no" and proceed to Question 33.*                   |
|                                                                       |
| *The criminal records check requirement applies to foster family      |
| homes licensed on or after November 17, 1997, or the State's          |
| federally approved effective date. The State agency must document the |
| results of the criminal records check and compliance with the safety  |
| requirement, including §471(a)(20)(A) during the PUR. Documentation   |
| of compliance must be provided even when the prospective foster       |
| parent lives out of State or is administered by a child-placing       |
| agency.*                                                              |
+-----------------------------------------------------------------------+
| > **31(b). If the State has "opted out," are safety considerations    |
| > addressed satisfactorily for the prospective foster parent?**       |
|                                                                       |
| *Indicate "N/A," if the State has not "opted out" or* *the foster     |
| family home is licensed before [March 27, 2000]{.underline}.          |
| Otherwise, indicate "yes" or "no" and proceed to Question 33.*        |
|                                                                       |
| *The State agency must document compliance with its safety            |
| requirement for the PUR. Compliance must be verified even for an      |
| out-of-State foster care provider or one administered by a            |
| child-placing agency.*                                                |
+-----------------------------------------------------------------------+

***Comments:** (Please reference question number for each comment.)*

+-----------------------------------------------------------------------+
| **I. SAFETY REQUIREMENTS OF PROVIDER** *Continued***\                 |
| ** \[Regulatory Citation: §472(b) and (c); (45 CFR                    |
| §§1356.71(d)(1)(iv), 1355.20\]\                                       |
| **Complete for [every]{.underline} foster care facility where the     |
| child resided during the PUR**                                        |
+-----------------------------------------------------------------------+
| **32. If the placement is a childcare institution, are safety         |
| considerations addressed** **satisfactorily for the caretaker staff   |
| of the institution?**                                                 |
|                                                                       |
| *Indicate "N/A," if the childcare institution is licensed before      |
| [March 27, 2000]{.underline}, or if the child is not placed in a      |
| childcare institution during the PUR. Otherwise, indicate "yes" or    |
| "no" and proceed to Question 33.*                                     |
|                                                                       |
| *The State agency must document compliance with its safety            |
| requirements for the duration of the child's stay during the PUR.     |
| Documentation must be provided even when the child is placed in an    |
| out-of-State facility.*                                               |
+-----------------------------------------------------------------------+
| **33. If "no," are title IV-E funds claimed for the period of         |
| ineligibility in which the safety requirement is not satisfied for    |
| the foster care provider?**                                           |
|                                                                       |
| *Indicate "yes" or "no" to Question 33 if the response to Question    |
| 31a, 31b, or 32 is "no." Otherwise, proceed to Question 34. If the    |
| response to Question 33 is "yes" and the ineligible title IV-E funds  |
| are claimed for a period within the PUR, this is an error case. All   |
| ineligible payments must be recorded on the attached "Improper        |
| Payment Chart."*                                                      |
|                                                                       |
| *Title IV-E foster care maintenance payments may not be made for a    |
| child placed in a foster family home or childcare institution that    |
| does not meet the safety requirements of the State.*                  |
+-----------------------------------------------------------------------+
| **34. Are title IV-E funds claimed *before* the month in which the    |
| safety**                                                              |
|                                                                       |
| > **requirements are met for the foster care provider?**              |
|                                                                       |
| *Indicate "yes" or "no."*                                             |
|                                                                       |
| *Federal financial participation may not begin until the first day of |
| the month in which the foster family home or childcare institution    |
| satisfied the respective safety standard of the State. If title IV-E  |
| is claimed before then, this is not an error case; however, any       |
| ineligible title IV-E payments must be recorded on the attached       |
| "Improper Payment Chart."*                                            |
+-----------------------------------------------------------------------+
| **CASE REVIEW FINDINGS**                                              |
+-----------------------------------------------------------------------+
| *After the On-Site Review Instrument is completed, determine whether  |
| the sample case is a non-error case or an error case and indicate     |
| this on the first page of the instrument. For a non-error case and an |
| error case, indicate whether underpayments were identified and        |
| whether ineligible payments were claimed.*                            |
|                                                                       |
| **[Underpayment:]{.underline}** *Occurs when a title IV-E maintenance |
| payment or administrative cost is not claimed, but may be claimed,    |
| for an allowable title IV-E activity or period of eligibility.*       |
|                                                                       |
| **[Non-Error Case with Ineligible Payment:]{.underline}** *Occurs     |
| when the only title IV-E payment for a maintenance or administrative  |
| cost is made for an ineligible child outside the PUR.*                |
|                                                                       |
| **[Error Case:]{.underline}** *Occurs when a title IV-E payment for a |
| maintenance or administrative cost is made for an ineligible child at |
| any time during the PUR.*                                             |
+-----------------------------------------------------------------------+

***Comments:** (Please reference question number for each comment.)*

**State**\_\_\_\_\_\_\_\_\_\_\_\_ **Sample
Number**\_\_\_\_\_\_\_\_\_\_\_\_

LICENSING/SAFETY CHECKLIST FOR MULTIPLE PLACEMENTS

+-----------------------------------------------------------------------+
| *Use this page to record multiple placements during the PUR*          |
+-----------------------------------------------------------------------+
| **H. PLACEMENT IN LICENSED FOSTER CARE FACILITY**                     |
+-----------------------------------------------------------------------+
| **X2. Provider Name:**                                                |
|                                                                       |
| **X3. Provider Street Address:**                                      |
|                                                                       |
| **X4. Provider City: X5. Provider State:**                            |
+-----------------------------------------------------------------------+
| **27. Date(s) of child\'s placement in this foster care facility      |
| (MM/DD/YY):**                                                         |
|                                                                       |
| **from \_\_\_/\_\_\_\_\_/\_\_\_\_\_\_ to                              |
| \_\_\_\_/\_\_\_\_\_/\_\_\_\_\_\_**                                    |
|                                                                       |
| **from \_\_\_/\_\_\_\_\_/\_\_\_\_\_\_ to                              |
| \_\_\_\_/\_\_\_\_\_/\_\_\_\_\_\_**                                    |
+-----------------------------------------------------------------------+
| **28. Type of foster care facility** *(check one)***: □ FFH □ GH □    |
| Public Institution □ PNP/FP Institution**                             |
|                                                                       |
| **□ Other** *(specify)*                                               |
| **\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_**                  |
+-----------------------------------------------------------------------+
| **29. Is this foster care provider *fully* licensed during the        |
| child's placement\                                                    |
| that falls within the PUR?**                                          |
|                                                                       |
| **Licensure period (MM/DD/YY): from \_\_\_\_/\_\_\_\_\_\_/\_\_\_\_\_  |
| to \_\_\_\_/\_\_\_\_\_\_/\_\_\_\_\_**                                 |
|                                                                       |
| **from \_\_\_\_/\_\_\_\_\_\_/\_\_\_\_\_ to                            |
| \_\_\_\_/\_\_\_\_\_\_/\_\_\_\_\_**                                    |
+-----------------------------------------------------------------------+
| > **29(a). If "no," are title IV-E funds claimed for the period that  |
| > the foster care provider is not *fully* licensed?**                 |
+-----------------------------------------------------------------------+
| **30. Are title IV-E funds claimed before the month in which the      |
| foster care provider is *fully* licensed?**                           |
+-----------------------------------------------------------------------+
| **I. SAFETY REQUIREMENTS OF PROVIDER**                                |
+-----------------------------------------------------------------------+
| **31. If the placement is a foster family home, has the State "opted  |
| out" of the criminal records check requirement for prospective foster |
| family homes?**                                                       |
+-----------------------------------------------------------------------+
| > **31(a). If the State has not "opted out," is a criminal records    |
| > check completed satisfactorily on the prospective foster parent?**  |
+-----------------------------------------------------------------------+
| > **31(b). If the State has "opted out," are safety considerations    |
| > addressed satisfactorily for the prospective foster parent?**       |
+-----------------------------------------------------------------------+
| **32. If the placement is a childcare institution, are safety         |
| considerations addressed satisfactorily for the caretaker staff of    |
| the institution?**                                                    |
+-----------------------------------------------------------------------+
| **33. If "no," are title IV-E funds claimed for the period of         |
| ineligibility in which the safety requirement is not satisfied for    |
| the foster care provider?**                                           |
+-----------------------------------------------------------------------+
| **34. Are title IV-E funds claimed before the month in which the      |
| safety requirements are met for the foster care provider?**           |
+-----------------------------------------------------------------------+

***Comments:** (Please reference question number for each comment.)*

**State\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Sample
Number\_\_\_\_\_\_\_\_\_\_\_\_\_\_**

**IMPROPER PAYMENT CHART**

*This chart is used to record the improper payments identified during
the review. Improper payments include underpayments as well as
overpayments, duplicate payments, and otherwise ineligible title IV-E
payments. The reviewer must provide a brief description of all
underpayments and ineligible payments, regardless of whether or not the
sample case is determined to be an error case.*

#### 

+----------------------------------+---------+---------+--------------+
| #### Checklist Item Number       | ####    | ##      | **Payment**  |
|                                  | ### Beg | ##### E | **Amount**   |
| #######                          | in Date | nd Date |              |
|  & Eligibility Issue Description |         |         |              |
+----------------------------------+---------+---------+--------------+
|                                  |         |         |              |
+----------------------------------+---------+---------+--------------+
|                                  |         |         |              |
+----------------------------------+---------+---------+--------------+
|                                  |         |         |              |
+----------------------------------+---------+---------+--------------+
|                                  |         |         |              |
+----------------------------------+---------+---------+--------------+
|                                  |         |         |              |
+----------------------------------+---------+---------+--------------+
|                                  |         |         |              |
+----------------------------------+---------+---------+--------------+
|                                  |         |         |              |
+----------------------------------+---------+---------+--------------+
|                                  |         |         |              |
+----------------------------------+---------+---------+--------------+

**[For Fiscal Computations]{.underline}**

(A). [Federal Share for Foster Care Maintenance Payments (FCMP)
Calculation]{.underline}

> *Disallowance: Total error case FCMP **x** State's Federal Medical
> Assistance Percentage (FMAP). Note that when the period of
> ineligibility includes multiple years, the FMAP may vary for each, or
> some, of those years.*

(B). [Federal Share for Foster Care Administration Costs
Calculation]{.underline}

> *Disallowance: Refer to the instructions for calculating
> administrative cost disallowance and formula calculation spreadsheet
> for*
>
> *initial and primary reviews.*

(C). [Period of Ineligibility and Underpayments]{.underline}

*Calculate the months of improper title IV-E payments for maintenance
and administrative costs beginning with the first month of*

*ineligibility to the end of the month that precedes the on-site
review.*

**Appendix II**

**Sample State Notification Letter**

Date (Must be dated and mailed at least 120 calendar days before the
on-site review)

Director, Child Welfare Agency

Street Address

City, State Zip

Dear Director:

On January 25, 2000, the Administration for Children and Families (ACF)
published in the Federal Register the final regulations on the title
IV-E foster care eligibility reviews and State child and family services
reviews. The regulations provide for initial title IV-E foster care
eligibility reviews and child and family services reviews to be
conducted in all States, the District of Columbia, and Puerto Rico
during the 3-year period following the effective date of the regulation,
and at specified intervals thereafter.

As discussed with (enter State coordinator) of your staff, the (enter
name of State) on-site title IV-E foster care eligibility review will be
conducted the week of (enter date). This is an important review because
many of the child protections in the Adoption and Safe Families Act
(ASFA) are embedded in the eligibility criteria for the title IV-E
foster care program. The review team will examine cases of children and
licensing files to assure that payments are being made on behalf of
eligible children and to eligible homes. The review team will consist of
(enter number) Federal staff and (enter number) State agency staff
selected by (enter name of State). In addition, State agency staff with
expertise in licensing, the legal system, and foster care payments
(other pertinent eligibility areas may be included here) will need to be
available to serve as resources during the review.

In the (enter review type), the review team will review (number of
cases) cases. A random sample of (enter number of cases), which includes
a (enter percentage) oversample, will be drawn from the submission of
(enter the name of the State)'s Adoption and Foster Care Analysis and
Reporting System (AFCARS) data that will be reviewed for the reporting
period of (enter PUR). (Other information may be included here regarding
the cases, such as automated files and the review process, such as
compliance standard and disallowances. For a secondary review, state the
reason a secondary review is necessary. A request for advance copies of
all forms to be used to determine eligibility should be made, e.g.,
copies of up-to-date payment histories, copies of court orders,
documentation of Aid to Families with Dependent Children (AFDC)
determination and re-determination worksheets, criminal records check
verification, licensing policy, copy of all existing agreements with
other public agencies for placement and care, etc. **Provide a deadline
for the State agency to submit information to ACF Regional Office, which
should be at least 90 calendar days before the on-site review.
Submission may be electronic.**

Page 2 -- Director, Child Welfare Agency

In addition, please have the following files and documents available
on-site for the review, if they are not already included in the case
record:

-   Foster home and group home/institution care licenses;

-   Criminal record verification files for foster parents;

-   Payment rates for each child;

```{=html}
<!-- -->
```
-   Payment and placement history for each child for the entire foster
    care episode;

-   Court orders, court petitions, and other pertinent court documents;
    and

```{=html}
<!-- -->
```
-   Safety considerations on behalf of employee/institutional personnel.

We look forward to working with you and your staff throughout the title
IV-E foster care eligibility review process. Please do not hesitate to
call (enter the name of the ACF Regional Office contact(s) and their
telephone number(s)) if you have questions or if you need additional
information.

> Sincerely,

ACF Child Welfare Program Manager

> Or appropriate Regional Official

cc: As appropriate

**Appendix III**

##### Materials to Read in Preparation for a Title IV-E Foster Care Eligibility Review

1.  Title IV-E Foster Care Eligibility Review Guide\*

2.  Child Welfare Policy Manual, HHS Issuance\*

3.  Final Rule, January 25, 2000 (65 CFR §4020)\*

4.  Section 472 of the Social Security Act\*

5.  Title IV-E Foster Care Eligibility Review On-Site Review Instrument
    and Instructions\*

6.  45 CFR Part 1356\*

7.  General eligibility determination procedures of the State agency
    being reviewed and the applicable Aid to Families with Dependent
    Children (AFDC) eligibility factors of the State

8.  Approved State plans for title IV-A (AFDC) and title IV-E of the
    Social Security Act

9.  Other material submitted by the State agency to the Administration
    for Children and Families that pertains to the eligibility review

    \*Internet accessible at http://www.acf.hhs.gov/programs/cb/

    Appendix IV

### Recommended Topics for Discussion by the Title IV-E Foster Care Eligibility Review Team During the Pre-Review Conference Call and Before Reviewing Records On-Site

The pre-review conference call is held between the ACF and the State
agency representatives at least 45 calendar days before the on-site
review and after ACF's review of material submitted by the State agency,
including the approved State plans for titles IV-E and IV-A. On-site,
the discussion topics may supplement the training provided to the team
before its review of case records. The ACF Regional Office leads the
pre-review and on-site discussions and uses the State agency material to
guide the discussions.

# 

# Case Sampling. Discuss the case selection process, including:

-   Period Under Review (PUR)

-   Types of sample case substitutions (eligibility changes or title
    IV-E payment adjustments must be received by the ACF Regional Office
    before the sample is drawn by the ACF Central Office)

-   Whether a stratified sample should be drawn for the primary review
    to include juvenile justice cases or other special title IV-E
    populations, and whether a 10 percent oversample of cases is
    sufficient

**Payment History.** Discuss information contained in the payment
history and request supplemental information when data is questionable
or missing.

**Policy and Practice.** Ask the State agency to describe its practice
and applicable statute or policy concerning:

-   Removals and Legal Documentation

> \- How does a child typically come into foster care (for example,
> court order, voluntarily placed or relinquished), including timeframes
> applicable to removal and mechanism for initiating court removals (for
> example, removal petitions)?
>
> \- Are court petitions filed, and, if so, when, and for what purpose?
>
> \- What kinds of court orders are used to remove children (for
> example, pick-up order, endorsement, emergency, shelter, etc.)?
>
> \- What constitutes a bona fide court order? Is a signature required,
> and, if so, who must sign and who may sign in lieu of the mandated
> signer? Is an electronic signature or a signature stamp permissible?
> Must it be dated?
>
> \- In what type of court proceeding, and how frequently is the
> "reasonable efforts to finalize the permanency plan" determined?
>
> \- When does the definitive finding of child abuse or neglect
> typically occur, and in what type of court proceeding and court order
> (for example, adjudicatory hearing)?
>
> \- How does the State agency define trial home visits?
>
> \- Does the State agency claim title IV-E reimbursement for children
> voluntarily placed? Who may enter into a voluntary placement agreement
> and what is the duration of such an agreement?

-   AFDC Relatedness

> \- How does the State agency ensure that Aid to Families with
> Dependent Children (AFDC) eligibility is determined using the July 16,
> 1996, look-back date or an earlier date (use of manual or automated
> files, State plan requirements concerning need standard, deprivation,
> and age and school attendance)? What types of documentation verify
> eligibility for each requirement?
>
> \- What is the date of title IV-E State plan approval to implement the
> provision stemming from the court decision, Rosales v. Thompson?
> (Applies to States in the Ninth Circuit, United States Court of
> Appeals.)
>
> \- How is eligibility determined and agency endorsement of the
> eligibility decision documented?
>
> \- How often is AFDC eligibility re-determined? How does the State
> agency ensure that AFDC eligibility is determined using the
> appropriate begin date of the AFDC eligibility requirements? What
> documentation will be in the record?
>
> \- Does the State agency exercise the option to pay title IV-E foster
> care maintenance payments on behalf of youth over the age of 18? If
> so, under what conditions?

-   Placement and Care Responsibility

> \- Are there title IV-E agreements for placement and care between the
> State agency and another public agency or federally recognized tribe
> in the State?
>
> \- How does the State agency document that the State agency, or an
> entity with a title IV-E agreement, had placement and care
> responsibility for the title IV-E eligible child, including an
> 18-year-old youth?

-   Licensure

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-   What mechanism does the State agency use to authorize facilities to
    operate as foster care providers (for example, licensing, approval)
    and which entities are regulated to authorize the foster care
    providers?

-   What types of facilities are authorized to operate as foster care
    providers (for example, foster family homes, childcare
    institutions)?

-   What types of licenses or approvals are issued to foster family
    homes and childcare institutions and under what conditions (for
    example, full, temporary, provisional)?

-   How often are licenses or approvals renewed? What happens when a
    license or approval expires? What is the State policy on lapsed
    licenses or approvals and on a facility placed on probation?

-   What documentation verifies licensure or approval of the child's
    placement with an in-State or out-of-State foster care provider?

    -   Safety

> \- For States that *did* *not* *opt out* of the criminal records check
> provision, what is the begin date for implementation of the
> requirement? (If implementation was delayed, what is the ACF approval
> date?) How does the State agency document the completion of criminal
> record checks for prospective foster parents who reside within and
> outside the State?
>
> \- For States that *opted out* of the criminal records check
> provision, what mechanism is used to determine the safety risks of
> prospective foster parents? What documentation verifies compliance
> with the safety requirements for a child placed with in-State and
> out-of-State foster care providers?
>
> \- For childcare institutions, what mechanism is used to determine the
> safety risks of facility staff? What documentation verifies compliance
> with the safety requirements for a child placed with in-State and
> out-of-State foster care providers?

**On-Site Review Logistics and Activities.** Discuss plans for the
logistical arrangements for team members and on-site activities during
the review week, including:

-   Hotel accommodations and travel arrangements

-   Room space requirements for reading records and conferences

-   Record preparation, location, and sample numbering

-   Team composition and expected work hours

-   Use of electronic files

-   Review week agenda

**Next Steps.** Determine whether an additional conference call is
necessary and what additional information, such as the placement
history, the State agency should provide for the on-site review.

**Appendix V**

**Suggested On-Site Quality Control Tasks\
for the Administration for Children and Families Regional Office Team
Leaders**

The Administration for Children and Families (ACF) Regional Office Team
Leader is responsible for ensuring that quality control functions are
performed during the on-site review in order to ensure consistency,
objectivity, and accuracy in reviewing cases. The following are some
tasks that can be performed to ensure quality control. The ACF Team
Leader or designee must initial and date the On-Site Review Instrument
to indicate it was quality checked.

1.  Verify that all case records in the sample and oversample are
    available at the review site since an unavailable case is counted as
    an error record.

2.  Review each completed checklist to ensure that:

-   all elements are completed on the Face Sheet, including whether the
    sample is a non-error case and whether there are improper payments,
    including underpayments;

-   all questions are answered;

-   dates recorded are logical;

-   reason is noted for any item rated "N/A";

-   reason is noted for any item recorded as "ineligible" or "potential
    error"

-   recording on the instrument is legible;

-   information is completed on all foster care providers where child
    resided during the PUR;

-   reason for ineligibility and period of ineligibility are recorded on
    the Improper Payment Chart at the end of the checklist;

-   reasons for underpayments are recorded on the Improper Payment Chart
    at the end of the checklist; and

-   necessary corrections were made by the reviewer, if the checklist is
    returned to the reviewer for revisions.

3.  Re-read the first record read by each reviewer to ensure that the
    reader understands the checklist and is applying an accurate
    interpretation of the law and regulations.

4.  Re-read all error records.

5.  Re-read records of reviewers who appear to have difficulty
    completing the checklist.

    **Appendix VI**

    **Title IV-E Foster Care Eligibility Reviews\
    Table of Completed Case Records\
    and Description of Improper Payments**

This document is an example of a case log that the ACF On-Site Review
Team Leader or designee completes to account for the review and
disposition of each sample case drawn for the review. The case log may
be modified as determined necessary by the team leader.

  ------------ ---------- -------------- ---------------- --------- ------------------ ----------- ---------- --------------- ---------- --------- ------------------ ---------- --------- ------------ --------
  **State:**                                                                                                                                                                                            

  **Sample     **AFCARS   **Reviewer**   **Compliance**             **Disallowance**                                                               **Underpayment**                                     **QA**
  Number**     Number**                                                                                                                                                                                 

                                                                    **Reason**         **Error**              **Non-Error**              **Total   **FFP**                                 **Reason**   
                                                                                                                                         FFP**                                                          

                                         **SC**           **NSC**                      **Main.**   **Adm.**   **Main.**       **Adm.**             **Main.**          **Adm.**   **Total                
                                                                                                                                                                                 FFP**                  

                                                                                                                                                                                                        

                                                                                                                                                                                                        

                                                                                                                                                                                                        

                                                                                                                                                                                                        

                                                                                                                                                                                                        

                                                                                                                                                                                                        

                                                                                                                                                                                                        

                                                                                                                                                                                                        

                                                                                                                                                                                                        

                                                                                                                                                                                                        

                                                                                                                                                                                                        

                                                                                                                                                                                                        

                                                                                                                                                                                                        

                                                                                                                                                                                                        
  ------------ ---------- -------------- ---------------- --------- ------------------ ----------- ---------- --------------- ---------- --------- ------------------ ---------- --------- ------------ --------

AFCARS Number: The encrypted number identified in the \"recnumbr\"
column of the AFCARS sample listing

SC: Substantial Compliance

NSC: Non-Substantial Compliance

Main: Amount of Maintenance Payment

Adm: Amount of Associated Administration Cost

FFP: Federal Financial Participation

QA: Quality Assurance Review of the Sample Case (Indicate the initials
of individual completing the QA)

**Appendix VII**

**Title IV-E Eligibility Criteria for the\
Foster Care Maintenance Payments Program**

  --------------------------- ----------------------- --------------------
  **Title IV-E FCMP\          **Statutory Citation**  **Regulatory
  Eligibility Criterion**                             Citation**

  Contrary to the Welfare     472(a)(1)               1356.21(c)

  Reasonable Efforts to       472(a)(1),              1356.21(b)(1)
  Prevent Removals\*          471(a)(15)(B)(i)        

  Reasonable Efforts to Make  472(a)(1),              1356.21(b)(2)
  and Finalize a Permanency   471(a)(15)(B)(ii) and   
  Plan\*                      (C)                     

  Aid to Families with        472(a)(1) and (4)       1356.71(d)(1)(v)
  Dependent Children (AFDC)                           
  Eligibility                                         

  Placement and Care          472(a)(2)               1356.71(d)(1)(iii)
  Responsibility Vested With                          
  the State Agency                                    

  Placement in a Licensed     472(a)(3), (b), and (c) 1356.71(d)(1)(iv)
  Foster Family Home or                               1355.20
  Childcare Institution                               

  Voluntary Placement         472(d), (e), and (f)    1356.22
  Agreements and Best                                 
  Interests Determinations                            

  Safety Requirements for     471(a)(20) and 475(1)   1356.30
  Foster Care Providers†                              
  --------------------------- ----------------------- --------------------

\* The act of making reasonable efforts to prevent a child's removal
from the home and/or to make and finalize a permanency plan is a State
plan requirement, and compliance with such is assessed during the course
of the child and family services reviews. The judicial determination
regarding the act of making reasonable efforts to prevent a child's
removal from the home or to make and finalize a permanency plan is an
eligibility criterion. The State's performance in obtaining the
requisite judicial determination is assessed through the title IV-E
foster care eligibility review.

† States must conduct criminal records checks on all prospective foster
and adoptive parents to comply with the title IV-E State plan. The
results of the criminal records check affect the State's ability to
license foster and adoptive homes. The provision also must be treated as
an eligibility criterion, given its impact on the licensing process.

**Appendix VIII**

##### Sample Transmittal Letter

##### Including Notice of Disallowance

Date: (Must be dated and mailed certified or registered within 30
calendar days following the on-site review)

## Name and Title of Appropriate State Official 

Street Address

City, State Zip Code

Dear (enter title and name):

During (enter date/time frame), Administration for Children and
Families\' (ACF) staff from the Central and Regional Offices and State
of (enter the name of the State) staff conducted an eligibility review
of (enter the name of the State)'s title IV‑E foster care program in
(enter the name of the city).

The purpose of the title IV-E foster care eligibility review was (1) to
determine if (enter the name of the State) was in compliance with the
child and provider eligibility requirements as outlined in 45 CFR
§1356.71 and §472 of the Social Security Act; and (2) to validate the
basis of (enter the name of the State)'s financial claims to ensure that
appropriate payments were made on behalf of eligible children and to
eligible homes and institutions.

**Include any information about the review, the review team,
discoveries, positive feedback, etc., such as the following:**

We commend the State for its excellent efforts to improve its title IV-E
foster care eligibility determination process, resulting in a more
accurate title IV-E foster care eligibility program. The enclosed report
identifies program strengths and provides recommendations for further
improvement.

Suggested language when the State is determined to be in substantial
compliance:

This is to inform you that the ACF has determined the State of (enter
the name of the State)'s title IV-E foster care maintenance payment
program to be in substantial compliance with Federal child and provider
eligibility requirements for the period (enter date) through (enter
date). Because (enter the name of the State) was found to be in
substantial compliance, a secondary review will not be required. The
next primary review must be held in 3 years. The financial penalty to be
taken for this review will be for the payments, including the
administrative costs, associated with the (enter number) error cases and
the (enter number) non-error cases with ineligible payments as indicated
in the enclosed final report of review findings.

## Suggested language when the State is determined not to be in substantial compliance:

This is to inform you that the ACF has determined the State of (enter
name)'s title IV-E foster care maintenance program not to be in
substantial compliance with Federal child and provider eligibility
requirements for the period (enter date) through (enter date). Pursuant
to 45 CFR §1356.71(i), (enter the name of the State) is required to
develop a Program Improvement Plan (PIP) designed to correct those areas
needing corrective action as identified in the enclosed report. The PIP
is not to exceed 1 year. It will be developed by the State, in
consultation with ACF Regional Office staff, and must be submitted to
the ACF Regional Office by (enter date that is 90 calendar days from
date of this notification letter).

The PIP must include the following components:

-   Specific goals or outcomes for program improvement;

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-   Action steps required to correct each identified weakness or
    deficiency;

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-   Date for completing each action step;

-   Description of how progress will be evaluated by the State agency
    and reported to the ACF Regional Office, including the frequency and
    format of the evaluation procedures; and

-   Description of how the ACF Regional Office will know that an action
    step has been achieved.

Also, pursuant to 45 CFR §1356.71(j)(2), following the completion of the
PIP, a secondary review must be held between \_\_\_\_ and \_\_\_\_
(enter the date of the first Adoption and Foster Care Analysis and
Reporting System \[AFCARS\] reporting period following the completion
date of the PIP). The sample for the secondary review will be 150 cases
(plus at least a 10 percent oversample of 15 cases) drawn from the
State's most recent Adoption and Foster Care Analysis and Reporting
System (AFCARS) data submission following the completion of the State
PIP.

## Suggested language concerning the disallowance:

> This letter also constitutes our formal notice of disallowance of
> \$(enter dollar amount), maintenance payments, and \$(enter dollar
> amount), related administrative costs in Federal Financial
> Participation (FFP) for title IV-E foster care claimed for the cases
> determined to be in error. An additional disallowance of \$(enter
> dollar amount), maintenance payments, and \$ (enter dollar amount),
> related administrative costs were assessed in FFP for title IV-E
> foster care payments claimed improperly for the cases determined to be
> non-error cases. These additional findings were not considered in the
> determination of the State's substantial compliance with the Federal
> requirements (for primary reviews only).
>
> A review of a sample of 80 cases was drawn from a universe of title
> IV-E payments for the review period noted above. The review team
> determined that (enter number) error cases and (enter number)
> non-error cases were ineligible for Federal funding.
>
> Since the amount of disallowed funds was previously included in
> Federal payments made to the State, you must repay these funds by
> including a prior period decreasing adjustment on the Quarterly Report
> of Expenditures (Form ACF-IVE-1), Part 1, Line 1, Columns (c) and (d).
> The IVE-1 form must be submitted within 30 days of the date of this
> letter in order to avoid the assessment of interest.

This is the final decision of the Administration for Children and
Families. Under regulations at 45 CFR Part 16, you have an opportunity
to appeal this decision to the Departmental Appeals Board (Board). This
decision shall be the final decision of the Department of Health and
Human Services unless, within 30 days of receiving this decision, you
deliver or mail (using registered or certified mail to establish the
date) a written notice of appeal to:

> Department of Health and Human Services
>
> Departmental Appeals Board, MS 6127
>
> Appellate Division
>
> 330 Independence Ave., SW
>
> Cohen Building, Room G-644
>
> Washington, D.C. 20201
>
> You must attach to the notice a copy of this decision, note that you
> intend to appeal, state the amount in dispute, and briefly state why
> you think this decision is wrong. A copy of your appeal also should be
> sent to my attention in the ACF Regional Office. The Board will notify
> you of further procedures.
>
> If you appeal, you may elect to repay the amount at issue pending a
> decision by the Departmental Appeals Board, or you may retain the
> funds pending that decision. An adjustment to return the disallowed
> funds for the purposes of avoiding interest assessment must be made
> through the use of the IVE-1 form, as described above. If you retain
> the funds and the Board sustains all or part of the disallowance,
> interest will be charged starting from the date of this letter on the
> funds the Boards decides were properly disallowed. Regulations at 45
> CFR Part 30 detail how interest will be computed.

In the event you choose to take no action to return the funds, it will
be assumed you have elected to retain the funds either to appeal or to
delay recoupment of the funds until the next issued grant award.
Interest will continue to accrue on the Federal funds retained by the
State during this period.

## Closing for all letters:

We thank you and your staff for the excellent efforts that were made to
prepare for and participate with us in this review. We look forward to
working with you and your staff to continue to improve State
implementation of the Federal requirements and to improve services to
children and families. Please contact (enter name of ACF Regional Office
review coordinator) at (enter telephone number) if you have any
questions about this review. Questions concerning the disallowance
should be directed to (enter name of ACF Regional Office fiscal contact)
at (enter telephone number).

> Sincerely,

Regional Administrator

cc: Children's Bureau Associate Commissioner

Others as Appropriate

Enclosures

**Appendix IX**

**Model Report**

## (Appropriate State) Title IV-E Foster Care Eligibility Review

**(Date of AFCARS Review Period)**

**Introduction**

During (enter appropriate time frame), Administration for Children and
Families\' (ACF) staff from the Central and Regional Offices and State
of (enter the name of the State) staff conducted an eligibility review
of (enter the name of the State)'s title IV‑E foster care program in
(enter the name of the city).

The purpose of the title IV-E foster care eligibility review was (1) to
determine if (enter the name of the State) was in compliance with the
child and provider eligibility requirements as outlined in 45 CFR
§1356.71 and §472 of the Social Security Act; and (2) to validate the
basis of (enter the name of the State)'s financial claims to ensure that
appropriate payments were made on behalf of eligible children and to
eligible homes and institutions.

For a secondary review, the following language is suggested:

This secondary review was conducted because of the findings of the
primary review that was completed during the week of (enter date). At
that time, (enter State) was determined not to be in substantial
compliance with the title IV-E eligibility requirements for the period
under review. As required, (enter State) submitted a Program Improvement
Plan (PIP) to correct the areas found deficient in its eligibility
program for foster care. The ACF's approval of the PIP was based on the
State's reports of progress and final implementation of the planned
improvements. (A brief synopsis of the PIP goals and activities may be
included).

### Scope of the Review

The (enter the name of the State) title IV‑E foster care eligibility
review encompassed a sample of all of the title IV‑E foster care cases
that received a foster care maintenance payment during the period of
(enter date) to (enter date). A computerized statistical sample of
(enter number) cases was drawn from the Adoption and Foster Care
Analysis and Reporting System (AFCARS) data submission which was
transmitted by the State agency to the ACF for the period under review.
The child's case file was reviewed for the determination of title IV‑E
eligibility and the provider's file was reviewed to ensure that the
foster home or childcare institution in which the child was placed was
licensed or approved for the period of the review.

For a primary review, the following language is suggested:

> During the primary review, (enter number) cases were reviewed. (enter
> number) cases were determined to be in error for either part or all of
> the review period for reasons that are identified in the Case Record
> Summary section of this report.
>
> **Use the language in either number 1 or 2 below, as appropriate to
> the review results:**

1.  Since the number of error cases was fewer than five, the ACF has
    determined (enter the name of the State) to be in substantial
    compliance.

2.  Since the number of error cases exceeded four, the ACF has
    determined (enter State) not to be in substantial compliance.
    Pursuant to 45 CFR §1356.71(i), you are required to develop a
    Program Improvement Plan (PIP) designed to correct those areas
    determined not to be in substantial compliance. The PIP will be
    developed by the State, in consultation with ACF Regional Office
    staff, and must be submitted to the ACF Regional Office by (enter
    date that is 90 days from date of cover letter). Once the State
    agency has satisfactorily completed the PIP, a secondary review of a
    sample of 150 title IV-E foster care cases will be conducted.

**For a secondary review, the following language is suggested:**

During the secondary review, (enter number) cases were reviewed. (enter
number) cases were determined to be in error for either part or all of
the review period for reasons that are identified in the Case Record
Summary section of this report. The dollar value of the sample was
\$(enter dollar amount) with the error cases totaling \$(enter dollar
amount). These data indicate that (enter the name of the State)'s dollar
error rate (enter percent) was (enter "less than/equal to" or "greater
than") 10 percent and/or the error cases error rate (enter percent) was
(enter "less than/equal to" or "greater than") 10 percent. Therefore,
(enter the name of the State) is considered (enter "to be in" or "not to
be in") substantial compliance.

**For non-error cases with ineligible payments discovered during a
review, the following language is suggested:**

> An additional (enter number) cases were identified that contained
> payments that were claimed improperly. Although these cases are not
> considered "error cases" for determining substantial compliance,
> (primary review only) the ineligible maintenance payments and the
> associated administrative costs are subject to disallowance. A
> disallowance in the amount of \$(enter amount) in maintenance payments
> and \$(enter amount) in administrative costs are assessed for these
> ineligible payments.

######### Case Record Summary {#case-record-summary .unnumbered}

The following details the error cases and non-error cases with
ineligible payments, reasons for the ineligibility, ineligible payments,
and appropriate citations: (List the sample number, describe the errors,
and note the citation of the requirement found to be improperly applied
for the period of ineligibility. A separate listing of the non-error
cases with ineligible payments as well as a separate listing for the
underpayments identified should be included below the data listed for
the error cases):

Sample number 27: Voluntarily placed child did not have a judicial
determination within 180 days of placement. 42 USC §672(e).

The erroneous maintenance payments (Main.) and administrative costs
(Admin.) associated with the (enter number of cases) error cases were
calculated as follows, and include all payments claimed on behalf of the
child for the entire period of the error. (Indicate the error case(s),
all payments claimed for the entire period of the error for each case,
Federal Medical Assistance Payment \[FMAP\] rate, and Federal Financial
Participation \[FFP\]. Note that a State's FMAP rate may vary annually
and, therefore, needs to be obtained for each year that a case is found
to be in error.)

  ---------- ----------- ----------- ----------- ----------- ---------- ----------- ----------- -------------
  **Sample   **XX**      **XY**      **XZ**      **Total     **FMAP**   **FFP       **FFP       **Total
  \#**                                           Main.**                Main.**     Admin.**    Disallow.**

  FFY 94                             1,635.71    1,635.71    70.92%     1,160.05    1,411.05    2,571.10

  FFY 95                             3,224.95    3,224.95    70.14%     2,261.98    1,261.98    3,523.96

  FFY 96     2,378.88                3,067.01    5,445.89    68.78%     3,745.68    1,745.68    5,491.36

  FFY 97     5,450.00                3,975.73    9,425.73    67.97%     6,406.67    3,406.67    9,813.34

  FFY 98     5,324.00                4,326.36    9,650.36    69.59%     6,715.69    5,715.69    12,431.38

  FFY 99     2,868.00    32,915.29   3,557.87    39,341.16   69.85%     27,479.80   17,479.80   44,959.60

  FFY 00     3,182.67    11,336.69   3,263.55    17,782.91   70.15%     12,474.71   9,474.71    21,949.42

  Total      19,203.55   44,251.98   23,051.18   86,506.71              60,244.58   40,495.58   100,740.16
  ---------- ----------- ----------- ----------- ----------- ---------- ----------- ----------- -------------

 

### Areas in Need of Improvement

Describe the areas of weakness or deficiency that need to be addressed
in the PIP.

## Strengths and Model Practices

Describe strengths or model practices discovered during the review.

Disallowances (if necessary)

Use language appropriate to the type of review and disallowance criteria
pursuant to 45 CFR §1356.71(j).

**For the primary review, the following language is suggested:**

> The review included a sample of (enter number) cases. The sample was
> drawn from a universe of cases that received at least one title IV-E
> foster care maintenance payment during the 6-month AFCARS period of
> (enter date) to (enter date). Based upon the results of the review,
> the State of (enter name) has been determined (enter "to be" or "to be
> not") in substantial compliance. (The report should end here if no
> cases were determined to be in error.) (enter number) cases were
> determined not to be eligible for funding under title IV-E foster
> care. Therefore, a disallowance in the amount of \$(enter dollar
> amount) in Federal Financial Participation (FFP) is assessed for the
> entire period of time that these cases were determined to be in error.

#### 

For the secondary review, use the suggested language in either 1 or 2
below, as appropriate to the review results:

1.  **State in substantial compliance:** The review included a sample of
    (enter number) cases with a total dollar value of \$(enter dollar
    amount). The sample was drawn from a universe of cases that received
    at least one title IV-E foster care maintenance payment during the
    6-month AFCARS period of (enter date) to (enter date). Based on the
    results of the review, the State of (enter the name of the State)
    has been found to be in substantial compliance; (the report should
    end here if no cases were determined to be in error) however, (enter
    number) cases were determined to be in error and are not eligible
    for funding under title IV-E foster care. Therefore, a disallowance
    in the amount of \$(enter dollar amount) in Federal financial
    participation (FFP) is assessed for the entire period of time that
    these cases were determined to be in error.

2.  **State not in substantial compliance:** The review included a
    sample of (enter number) cases with a total dollar value of \$(enter
    dollar amount). The sample was drawn from a universe of cases that
    received at least one title IV-E foster care maintenance payment
    during the 6-month AFCARS period of (enter date) to (enter date).
    Based upon the results of the review, the State of (name) has been
    found not to be in substantial compliance since (enter number) cases
    were not eligible for funding under title IV-E foster care and the
    case and dollar error rates both exceeded 10 percent. We have
    projected the results of the review over the universe from which the
    sample was drawn and have determined that \$(enter dollar amount) in
    title IV-E funds were inappropriately claimed as foster care
    maintenance payments. In addition, the related share of
    administrative dollars of \$(enter dollar amount) is disallowed.
    Therefore, the total disallowance is \$(enter dollar amount) in
    Federal financial participation (FFP).

    Appendix X

    Timeframes for Title IV-E Foster Care Eligibility Review Activities

A subsequent primary review must be conducted within 3 months of the
anniversary date on which the previous on-site review was completed. A
secondary review must be conducted during the second AFCARS reporting
period that follows the completion date of the State PIP.

-   **Timeframe and Activity**

```{=html}
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```
-   **6 months before on-site review:**

```{=html}
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```
-   ACF Regional Office and State Agency representative determine the
    dates for the on-site review

-   ACF Regional Office provides the review date and site location to
    the ACF Central Office Team Leader for Eligibility Monitoring

-   ACF Central Office Team Leader for Eligibility Monitoring develops a
    national review schedule based on information provided by the ACF
    Regional Office and transmits the schedule to the Federal contractor
    to post on the Internet Web site for the Children's Bureau

```{=html}
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```
-   **120 calendar days before on-site review:**

```{=html}
<!-- -->
```
-   ACF Regional Office sends the State agency written confirmation of
    the scheduled date for the on-site review

-   ACF Regional Office requests a copy of the State's payment histories
    and policies relevant to the review

-   ACF identifies Federal members of the review team

-   State agency identifies State members of the review team

```{=html}
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```
-   **90 calendar days before on-site review:**

```{=html}
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```
-   State agency transmits to ACF Regional Office the requested policies

-   ACF Regional Office transmits to ACF Central Office the requested
    State policies

-   ACF Regional Office and Central Office review the State's policies
    as well as the title IV-E and title IV-A State plans to prepare for
    the pre-review conference call with the State agency

-   ACF Regional Office and Central Office collaborate with the State
    agency to plan logistical arrangements for the on-site review,
    including hotel accommodations and transportation for review team
    members

    -   **45 -- 60 calendar days before on-site review:**

```{=html}
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```
-   ACF Central Office selects sample of cases from the State's AFCARS
    data for the period under review

-   ACF Central Office transmits sample listing to State agency and ACF
    Regional Office

-   State agency transmits payment histories for sample cases to ACF
    Regional Office and obtains ACF Regional Office concurrence on case
    substitutions with oversample cases

-   State agency begins organizing case records to make sure case
    material and documentation relevant to the on-site review are
    available

-   ACF Regional Office schedules and convenes conference call with
    State agency and ACF Central Office to provide an overview of the
    review procedures; to discuss review activities, and to discuss
    State agency material. State agency arranges space for meetings and
    review activities conducted on site during the review week

    -   **30 calendar days before on-site review:**

-   State agency submits to ACF additional information and policy
    material, if requested

-   ACF Regional Office finalizes agenda of activities for the on-site
    review and transmits to State agency and ACF Central Office,
    including any additional State agency material

# On-Site Review

-   **30 calendar days following on-site review:**

```{=html}
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```
-   ACF Regional Office transmits to the State agency the final report
    of compliance and notifies the State agency of payment disallowances

    -   ACF Regional Office transmits to the Central Office an
        electronic copy of the final report and disallowance notice

```{=html}
<!-- -->
```
-   **60 calendar days following on-site review:**

```{=html}
<!-- -->
```
-   State agency submits payment adjustments via the Quarterly Report of
    Expenditures (Form ACF-IV-E-1)

-   State agency submits to the Departmental Appeals Board a written
    notice to appeal the review findings, at State agency option, within
    30 calendar days following receipt of disallowance letter

    -   ACF Regional Office sends to the ACF Central Office, Associate
        Commissioner, a copy of the State appeal

```{=html}
<!-- -->
```
-   **90 calendar days following receipt of noncompliance notice by
    State agency**

```{=html}
<!-- -->
```
-   State agency submits completed Program Improvement Plan (PIP) to ACF
    Regional Office following written receipt of notification of
    noncompliance. If necessary, ACF Regional Office may grant a 30-day
    extension for State agency to submit additional case documentation.

```{=html}
<!-- -->
```
-   **30 calendar days following receipt of PIP from State agency:**

    -   ACF Regional Office reviews completed PIP for approval or
        disapproval

    -   ACF Regional Office reviews additional case documentation
        submitted by State agency and notifies State of approval or
        disapproval

    -   ACF Regional Office notifies State of approval or disapproval of
        PIP

    -   ACF Regional Office transmits to ACF Central Office Team Leader
        for Eligibility Monitoring an electronic copy of the approved
        PIP and approval letter including PIP approval date

-   **30 calendar days following notification of PIP disapproval by ACF
    Regional Office**

```{=html}
<!-- -->
```
-   State agency submits revised PIP to ACF Regional Office

```{=html}
<!-- -->
```
-   **2-3 Weeks following receipt of revised PIP from State agency:**

```{=html}
<!-- -->
```
-   ACF Regional Office reviews completed PIP for approval or
    disapproval

-   ACF Regional Office notifies State agency of approval or disapproval
    of PIP and, if disapproved, notifies State agency of immediate
    scheduling of secondary review

**Appendix XI**

**Title IV-E Foster Care Eligibility Chart**

**Appendix XII**

**Matrix of AFDC Factors**

**Related to Title IV-E Foster Care Eligibility**

+--------------------------------+------------------+---------+-------+
| **Factor**                     | **Statutory**    | #       | **R   |
|                                |                  | Non-Ros | osale |
|                                | **Regulatory or  | ales Pr | s\*** |
|                                | Policy           | ovision |       |
|                                | Reference**      |         | #     |
|                                |                  |         |  Prov |
|                                |                  |         | ision |
+--------------------------------+------------------+---------+-------+
| State AFDC plan, July 16, 1996 | §472(a),         | X       | X     |
|                                |                  |         |       |
|                                | Social Security  |         |       |
|                                | Act              |         |       |
+--------------------------------+------------------+---------+-------+
| Child met income need          | 45 CFR §23320    | X       | X     |
| standards                      |                  |         |       |
+--------------------------------+------------------+---------+-------+
| Child had resources of         | §472(a), Social  | X       | X     |
| \$10,000 or less               | Security Act     |         |       |
+--------------------------------+------------------+---------+-------+
| Child deprived of parental     | Former §406(a),  | X       | X     |
| support                        |                  |         |       |
|                                | Social Security  |         |       |
| -   Death of parent            | Act              |         |       |
|                                |                  |         |       |
| -   Continued absence of       | 45 CFR           |         |       |
|     parent                     | §233.90(c)       |         |       |
|                                |                  |         |       |
| -   Physical or mental         | 45 CFR §233.100  |         |       |
|     incapacity of parent       |                  |         |       |
|     (documented by medical     |                  |         |       |
|     professional)              |                  |         |       |
|                                |                  |         |       |
| -   Unemployment of principle  |                  |         |       |
|     wage earner                |                  |         |       |
+--------------------------------+------------------+---------+-------+
| Child met age requirement      | Former §406(a),  | X       | X     |
|                                |                  |         |       |
| -   Under age 18, or           | Social Security  |         |       |
|                                | Act              |         |       |
| -   Age 18, but under age 19   |                  |         |       |
|     and full-time student      | 45 CFR           |         |       |
|     (Title IV-A State plan     | §233.90(b)(3)    |         |       |
|     option)                    |                  |         |       |
+--------------------------------+------------------+---------+-------+
| Child lived with specified     | Former           | X       | X     |
| relative during 6 months       | §406(a)(1)       |         |       |
| before legal removal. (Legal   |                  |         |       |
| removal means removal via      | §4               |         |       |
| Voluntary Placement Agreement  | 72(a)(4)(B)(ii), |         |       |
| or judicial proceeding.)       |                  |         |       |
|                                | Social Security  |         |       |
| -   Specified relative is a    | Act              |         |       |
|     parent or any relation by  |                  |         |       |
|     blood, marriage, or        | 45 CFR           |         |       |
|     adoption within the fifth  | §233.90(c)(1)(v) |         |       |
|     degree of kinship to the   |                  |         |       |
|     child                      | 45 CFR           |         |       |
|                                | §23              |         |       |
| ```{=html}                     | 3.90(c)(1)(v)(B) |         |       |
| <!-- -->                       |                  |         |       |
| ```                            |                  |         |       |
| -   Specified relative         |                  |         |       |
|     exercised responsibility   |                  |         |       |
|     for daily care and control |                  |         |       |
|     of child                   |                  |         |       |
+--------------------------------+------------------+---------+-------+
| Child "lived with" and         | 45 CFR           | X       |       |
| "removed from" same specified  | §1356.21(l)      |         |       |
| relative                       |                  |         |       |
|                                | ACYF-CB-IM-04-03 |         |       |
| -   AFDC based on removal      |                  |         |       |
|     home, i.e.,                | §472(a)(4)(A) &  |         |       |
|                                | (B),             |         |       |
| > home of legal removal        |                  |         |       |
|                                | Social Security  |         |       |
| -   AFDC eligible during       | Act              |         |       |
|     removal month              |                  |         |       |
+--------------------------------+------------------+---------+-------+
| Child "lived with" and         | ACYF-CB-IM-04-03 |         | X     |
| "removed from" different       |                  |         |       |
| specified relative             |                  |         |       |
|                                |                  |         |       |
| -   AFDC based on removal home |                  |         |       |
|     or                         |                  |         |       |
|                                |                  |         |       |
| -   AFDC based on home of any  |                  |         |       |
|     specified relative child   |                  |         |       |
|     lived with during 6 months |                  |         |       |
|                                |                  |         |       |
| > before legal removal         |                  |         |       |
|                                |                  |         |       |
| -   AFDC eligible during       |                  |         |       |
|     removal month              |                  |         |       |
+--------------------------------+------------------+---------+-------+

> \*Rosales States: CA, AK, AZ, HI, ID, MT, NV, OR, WA. Provision
> applicable upon ACF Regional Office approval of the State agency's
> amendment to its title IV-E plan.
>
> Eligibility decisions should not be based solely on this summary
> matrix. Refer to the applicable statutory, regulatory, or policy
> citation as well as the State's plans for title IV-A and title IV-E,
> for further information.

**Appendix XIII**

**Provider Requirements**

**Title IV-E Foster Care Eligibility**

**LICENSURE**

  ------------------------------- -------------- ------------------------
  **Provider Type**               **Federal      **Implementation date**
                                  Provision**    

  FFH licensed before 3/27/00     Full licensure 09/27/2000 ^1^

  FFH licensed on/after 3/27/00   Full licensure 03/27/2000

  Childcare institution           Full licensure Upon facility licensure
  ------------------------------- -------------- ------------------------

^1^ No disallowances will be taken for the period 3/27/00 -- 9/27/00 for
homes licensed before 3/27/00 that do not meet full licensure status
during that period

**SAFETY**

  ------------------- ---------------- --------------- ------------------ ---------------
  **Provider Type**   **Federal                        **Implementation   
                      Provision**                      Date**             

                      **Opt-Out        **Non-Opt-Out   **Opt-Out State**  **Non-Opt-Out
                      State**          State**                            State**

  FFH licensed before Safety                           Safety requirement 
  11/19/97            requirement not                  not applicable     
                      applicable                                          

  FFH licensed        Address safety   Complete        03/27/2000         11/19/1997 ^1^
  on/after 11/19/97   considerations   criminal                           
                      in home          records check                      

  Childcare           Address safety                   Safety requirement 
  institution         considerations                   not applicable     
  licensed before     with respect to                                     
  3/27/00             the staff and                                       
                      caretakers of                                       
                      the institution                                     

  Childcare           Address safety                   03/27/2000         
  institution         considerations                                      
  licensed on or      with respect to                                     
  after 3/27/00       the staff and                                       
                      caretakers of                                       
                      the institution                                     
  ------------------- ---------------- --------------- ------------------ ---------------

^1^ If State had an approved delayed effective date, only foster parents
licensed after the delayed effective date would need the criminal
records check.

**Appendix XIV**

**Calculation of the Maintenance Payment and Administrative Cost
Disallowances for the Title**

**IV-E Primary and Secondary Foster Care Eligibility Reviews and of the
National Foster Care Error Rate for the Title IV-E Foster Care Program**

The following instructions and spreadsheets are to be used by ACF
Regional Office staff for the purpose of calculating, or assisting in
the calculation of, the disallowance of title IV-E funds identified as
improper payments as a result of the on-site review of foster care case
records. See attachments A -- F.

The icons below will allow the user to work directly in the individual
documents.

> **Attachment B:** Spreadsheet for Calculating Administrative Cost
> Disallowances on an Individual Basis for Title IV-E Foster Care
> Eligibility Reviews
>
> ![](media/image2.wmf)
>
> **Attachment D:** Workbook for Calculating the National Foster Care
> Error Rate for the Title IV-E Foster Care Program
>
> ![](media/image3.wmf)
>
> **Attachment F:** Spreadsheet for Calculating a Weighted Monthly
> Administrative Cost on Extrapolated Disallowances for the Title IV-E
> Foster Care Eligibility Reviews
>
> ![](media/image4.wmf)

**ATTACHMENT A**

**INSTRUCTIONS FOR CALCULATING ADMINISTRATIVE COST DISALLOWANCES ON AN
INDIVIDUAL CASE BASIS FOR THE TITLE IV-E FOSTER CARE ELIGIBILITY
REVIEWS**

These instructions are to be used in completing the Administrative Cost
Disallowance Calculation Spreadsheet for the title IV-E foster care
eligibility reviews on an individual case basis. In conjunction with the
spreadsheet (attachment B), they provide guidance to Administration of
Children and Families (ACF) Regional Office staff in calculating
administrative cost disallowances on an individual case basis pursuant
to findings resulting from initial primary, primary, and secondary
reviews, as applicable. The disallowance calculation for a secondary
review is also potentially subject to a further extrapolation procedure
in accordance with applicable regulations. See attachment E for further
information.

Attachment B is a protected Microsoft Excel file. It will allow entries
only in the designated shaded areas. When entering the required
information into the shaded areas, use the "TAB" key on your computer
keyboard for easy access and input. The Federal fiscal year (FFY) of the
period under review (PUR) determines the FFY of the Administrative
Disallowance Calculation spreadsheet. Example:  Review periods October
1, 2004, to March 31, 2005, and April 1, 2005, to September 30, 2005,
are FFY 2005 and the spreadsheet with the file name
"ADMDISALLOWCAL**[FY05]{.underline}**OMB" would be used. This
calculation spreadsheet is updated annually in March to reflect new FFY
Office of Management and Budget (OMB) deflator chart guidance, which is
published at the end of January for the current FFY.

The ACF Regional Office must retain all documentation provided by the
State for calculating maintenance and administrative cost disallowances
as part of the review file. This includes the complete payment history
for all sample cases.

**STEPS TO COMPLETE CALCULATION SPREADSHEET**

**Enter** the State's name, review period, and type of review (initial
primary, primary, or secondary) at the top of the spreadsheet.

**Step 1** --- Determines the Current Year (CY) 12-month period for
disallowance purposes. This includes the 6-month Adoption and Foster
Care Analysis and Reporting System (AFCARS) review period (RP) and the
6-month AFCARS period immediately preceding the review period (Pre-RP).
Quarters (Qtr) 3 and 4 will comprise the 6-month review period; and
quarters 1 and 2 the 6 preceding months. For example, the review period
is October 1, 2004, to March 31, 2005. Then, the quarters will be:
Pre-RP Qtr 1 = April 1, 2004, to June 30, 2004; Pre-RP Qtr 2 = July 1,
2004, to September 30, 2004; RP Qtr 3 = October 1, 2004, to December 31,
2004; and RP Qtr 4 = January 1, 2005, to March 31, 2005.

**Steps 2 and 3** --- To obtain the data for Steps 2 and 3, refer to
Part 1 of the four quarterly ACF-IV-E-1 foster care expenditure reports
comprising the 12-month CY period defined in Step 1, or access the CY
data through GATES.

**Step 2** --- Calculates the average monthly administrative cost for
the CY defined in Step 1.

> a\. For Step 2(a), refer to column b (Federal Share) of the Current
> Quarter Expenditures on Part 1 of the Form ACF-IV-E-1 for Foster Care
> or GATES for each of the quarters in the CY. Enter the amounts on
> lines 5a. (Case Planning & Management) and 5e. (Other Administration).
> The formula will automatically add the quarters and divide by 12.
>
> b\. For Step 2(b), refer to column d (Federal Share) of the Prior
> Quarter Adjustments on Part 1 of the Form ACF-IV-E-1 for Foster Care
> or GATES for each of the quarters in the CY. Enter the amounts on
> lines 5a. (Case Planning & Management) and 5e. (Other Administration).
> The formula will automatically add the quarters and divide by 12.
>
> c\. The Average Monthly Admin Costs, 2(a) and Average Monthly Admin
> Adjustments, 2(b) also will be automatically added together.

**Step 3** --- Calculates the average monthly number of children for the
CY 12-month period in Step 1. Refer to column b (Federal Share) of the
Current Quarter Expenditures on Part 1 of the Form ACF-IV-E-1 for Foster
Care or GATES for each of the quarters in the CY. Enter the numbers on
line 4 (Avg Monthly No. of Children). The formula will automatically add
the quarters and divide by 4.

**Step 4** --- For the average monthly administrative cost disallowance
per child for the CY period, the formula will automatically divide the
total of Step 2 by Step 3 (total average monthly administrative costs
divided by average monthly number of children).

**Step 5** --- An administrative cost disallowance must be taken for
each error case identified during the PUR beginning with the first month
of ineligibility and continuing through the earlier date of the end of
the on-site review or when the ineligibility ceases. (Exception: Per
ACYF-CB-PI-02-08, States may continue to claim Federal financial
participation (FFP) for the administrative costs associated with an
otherwise title IV-E-eligible child placed in an unlicensed foster
family home pending the issuance of a final rule.) The AFCARS period is
based on paid claims during the month, not the month the service is
provided. In months where no maintenance payment has been claimed, no
administrative cost disallowance can be taken. Steps 5, 6, and 7 must be
completed for each error case.

> a\. Determine the number of months for each error case in which
> administrative costs have been claimed. In most cases, this number
> will be the same as the number of months for which ineligible foster
> care maintenance payments were disallowed. Portions of a month should
> be rounded to the nearest month. Months with 15 or fewer days of
> ineligibility would be rounded down and months with 16 or greater days
> of ineligibility would be rounded up. (Example: 2 months and 15 days
> equals 2 months; 2 months and 16 days equals 3 months.)
>
> b\. In Step 5(a), enter the sample eligibility case review number, the
> case record number, the start and ending dates for the period of
> ineligibility, and (optional) the error reason numbers from the
> On-Site Review Instrument (these numbers correspond with the item
> numbers in the instrument).
>
> c\. In Step 5(b), enter the number of months of ineligible maintenance
> payments, the number of months of ineligible administrative costs and
> reasons for any difference between the two figures.
>
> d\. Distribute the number of months of ineligible administrative costs
> in Step 5(b) across each of the relevant FFYs listed in Step 6 column
> titled \# OF ERROR MONTHS PER YEAR. Repeat this Step for all
> ineligible years on each error case, beginning with the first month of
> ineligibility and continuing through the earlier date of the end of
> the on-site review or when the ineligibility ceases. The FFY is
> October 1 to September 30. Therefore, October 1, 2004, to September
> 30, 2005, is FFY 2005. For example, if the error case was ineligible
> 21 months from July 1, 2003, to March 31, 2005, the entry would be 6
> months for October 1, 2004, to September 30, 2005 (FFY2005), 12 months
> for October 1, 2003, to September 30, 2004 (FFY 2004), and 3 months
> for October 1, 2002, to September 30, 2003 (FFY 2003).

Any improper payments made after the end of the on-site review,
resulting from cases identified during the PUR, are unallowable. The
State must return the Federal share of funds received (maintenance and
administrative costs) by making the appropriate adjustments on their
IV-E-1 report, and cease claiming costs until (and if) the cases are
determined eligible. These post on-site review costs should be
identified separately in the final report sent to the State agency.

**Step 6** --- In determining the Total Adjusted Administrative Cost
Disallowance for Error Cases per CY, columns FEDERAL FISCAL YEAR (FFY),
OMB DEFLATOR CHART %, ADMIN COSTS DISALLOWANCE DEFLATION %, and \# OF
ERROR MONTHS PER YEAR will already be populated for all years identified
in Step 5(b). Columns \# MONTHS X (STEP 4 X % DEFLATION) = and TOTAL
CUMULATIVE DISALLOW will automatically be calculated. The current FFY
OMB Deflator Chart % will serve as the basis for deflating the
administrative costs for each preceding 12-month period. The formula
will divide each OMB Deflator Chart % by the current FFY OMB Deflator
Chart % to obtain the Administrative Costs Disallowance Deflation %
(Example for FFY 2004: 1.1180/1.1588 = 0.9648). The number of error
months for the year will automatically be multiplied by the average
monthly administrative cost per child (Step 4) and the Admin Costs % of
Deflation, then entered in the \# Months X (Step 4 Results X %) column.
The formula also will automatically add the year total to the cumulative
figure above in the Total Cumulative Disallow column. The last numeric
figure in the TOTAL CUMULATIVE DISALLOW column is your Total [Federal
Share]{.underline} Adjusted Administrative Cost Disallowance for this
error case. This is the amount of Foster Care Administrative Costs the
ACF will disallow for this error case.

The **OMB Deflator Chart source** is located on the OMB portion of the
White House Web site
(<http://www.whitehouse.gov/omb/budget/fy2006/pdf/hist.pdf>) under the
Historical Tables Budget of US Government for the Federal Fiscal Year
(FFY) 2006 in Section 10, the Gross Domestic Product and Implicit Outlay
Deflators, on Table 10.1, the Historical Tables 1940-2010 (where FFY
2000 equals 1.000), in the Column Other Grants (Federal Grants to State
and Local Government). The FFY 2006 table contains the FFY 2004 actual
amount and the FFY 2005 current estimate.

**Step 7** --- Enter the File Name. Save the file as "Adm Disallow Cal"
plus the two letters of "State's Name," the "Sample Case Number" and
".xls" to your disk or CD. Print the spreadsheet for a hard copy record.
This will minimize the amount of effort needed to make corrections, and
reduce the amount of input time required.

**Steps 5, 6, and 7** --- Page 2 of the spreadsheet will need to be
repeated for every error case.

![](media/image5.wmf)

**ATTACHMENT C**

**INSTRUCTIONS FOR CALCULATING THE NATIONAL FOSTER CARE ERROR RATE AND
MAINTENANCE**

**PAYMENT DISALLOWANCES ON AN INDIVIDUAL BASIS FOR**

**THE TITLE IV-E FOSTER CARE ELIGIBILITY REVIEWS**

[MAINTENANCE PAYMENT DISALLOWANCES]{.underline}

These instructions provide guidance to the Administration of Children
and Families (ACF) Regional Office in calculating maintenance payment
disallowances for the title IV-E foster care eligibility reviews on an
individual case basis pursuant to findings resulting from initial
primary, primary, and secondary reviews, as applicable. A sample case
must have at least one title IV-E maintenance payment during the period
under review (PUR) in order to be included in the eligibility review. A
maintenance payment disallowance must be taken for each error case
identified during the PUR and for improper payments on non-error cases,
beginning with the first month of ineligibility and continuing through
the earlier of the end of the service month that immediately precedes
the month of the on-site review or when the ineligibility ceases. The
disallowance amounts are obtained from the payment history provided by
the State for all sample cases for the applicable period(s) of
ineligibility.

Any ineligible or improper payments made after the end of the on-site
review, resulting from cases identified during the PUR, are unallowable.
The State must return the Federal share of funds received (maintenance
and administrative costs) by making the appropriate adjustments on their
IV-E-1 report, and cease claiming cost until (and if) the cases are
determined eligible. These post on-site review costs should be
identified separately in the final report letter to the State.

States must provide a full payment history for each sample case with all
necessary identifying information to the ACF in an electronic format
(where possible) at least 30 days before the on-site review. If a State
does not have the actual documentation or records of the title IV-E
payments for early periods, then estimated amounts must be provided to
the satisfaction of the ACF. The ACF is required by regulations to
recover payment and related administrative costs for all periods of time
that an error case is determined to be ineligible. Disallowances for
States determined to be non-compliant in a secondary review also will be
calculated through an extrapolation procedure applied to the period
under review in accordance with applicable regulations.

The Regional Office must retain all documentation provided by the State
for calculating maintenance and administrative cost disallowances as
part of the review file. This includes the complete payment history for
all sample cases.

The completion of Attachment D, using the Federal Financial
Participation (FFP) dollar amount, will provide the information for
calculating maintenance payment disallowances and the data needed to
compute the national foster care error rate (refer to the below
instructions for guidance).

[NATIONAL FOSTER CARE ERROR RATE]{.underline}

The Improper Payments Information Act (IPIA) requires Federal agencies
to address improper payments in all programs. In compliance with the
IPIA and the Office of Management and Budget (OMB), the ACF must
calculate a national foster care error rate for the title IV-E Foster
Care Program on an annual basis.

The instructions provided in attachment C are to be used in completing
the Workbook for Calculating the National Foster Care Error Rate
(attachment D) for the PUR on all title IV-E foster care eligibility
reviews. In conjunction with the workbook, the instructions provide
guidance to the ACF Regional Office on entering the required FFP
information on maintenance payments on every sample case for initial
primary, primary, and secondary reviews, as applicable.

For a review case to count as a sample case, it must have at least one
IV-E maintenance payment during the PUR. All sample cases must be listed
on the case sheets whether the sample is eligible or an error.

The completion of attachment D serves several purposes by providing the
information needed for the National Foster Care Error Rate, by
calculating the maintenance payment disallowances on compliant initial
primary, primary, and secondary reviews, and by providing the required
data to the ACF statistician for the extrapolation of non-compliant
secondary reviews.

The workbook contains a summary sheet and eight case sheets. The summary
sheet automatically lists the totals of the each case sheet. The case
sheets are numbered 1-25, 26-50, 51-75, 76-100, 101-125, 126-150,
151-175, and 176-200 to accommodate primary and secondary reviews and
any over-sampling required. The sample case's information is directly
input on the case sheets.

Attachment D is a protected Microsoft Excel file. It will allow entries
only in the designated shaded areas. When entering the required
information into the shaded areas, use the "TAB" key on your computer
keyboard for easy access and input.

**STEPS TO COMPLETE THE WORKBOOK**

[SUMMARY SHEET]{.underline}

Enter the State's name, the period under review (PUR), the State's
Federal Medicaid Assistance Percentage (FMAP) Rate for the fiscal year
in which the PUR is located, the type of review (initial primary,
primary, or secondary), and the date of completion or the latest
adjustment at the top of the worksheet. This information MUST be input
on the Summary Sheet in the shaded areas to automatically populate all
the case sheets. The FMAP Rate for the PUR fiscal year MUST be entered
in a [decimal]{.underline} format for the formulas to calculate the
Federal Financial Participation (FFP) of the disallowance correctly.
Example: The FMAP Rate [75.19% is entered 0.7519]{.underline}.

The summary sheet consists of cell formulas and links to the "Totals"
line from each of the eight case sheets (example Sheet 1--25 Cases).
When the sample case's data is entered on the appropriate case sheet,
the columns of the summary sheet are automatically populated.

[CASE SHEETS]{.underline}

The Item \# column displays the count of the case in the review sample.

**Step 1** -- Enter the sample number of the case in the Sample Number
column.

**Step 2** -- Enter the case status in the Case Status column. If the
sample case is eligible, input a "P" for "pass" and an "F" for "failed"
on error cases.

**Step 3** -- For the Period under Review, Total Monthly FFP Maintenance
Payments on All Cases columns, enter by month the total computable
maintenance payments amounts on [all]{.underline} sample cases. The
Total Dollars Claimed column will automatically add the 6 months'
figures together for each case. The FFP Dollars Claimed column will
automatically multiply the FMAP Rate by the Total Dollars Claimed column
for each case to provide the 6-month FFP dollar claimed amount.

**Step 4** -- For the Period under Review, Ineligible and Improper
Monthly Maintenance Payments columns, enter by month the total
computable maintenance payments amounts on sample cases (as determined
from the eligibility review of each case) that are ineligible payments
on error cases and improper payments on non-error cases. The total
ineligible amounts (hereafter referred to as "error dollars") apply only
to the 6-month AFCARS period from which the sample was selected. The
Total Error Dollars column will automatically add the 6 months' figures
together on each case. The FFP Error Dollars column will automatically
multiply the FMAP Rate by the Total Error Dollars column for each case
to provide the 6-month FFP error dollar amount.

**Step 5** -- Enter the number of months that an administrative costs
disallowance is required in the Error Cases Number of Ineligible Months
of Administrative Costs column. Generally, the number of months that
maintenance payment claimed will be the same as the number of ineligible
months of administrative costs. Exception: Per ACYF-CB-PI-02-08, States
may continue to claim FFP for the administrative costs associated with
an otherwise title IV-E-eligible child placed in an unlicensed foster
family home (pending the issuance of a final rule). Therefore, in this
instance, the number of ineligible administrative costs months would be
less the number of months maintenance payment claimed.

The totals of all columns will automatically be added together and
carried forward to the summary sheet.

**Repeat Steps 1 through 3** for each of the sample cases in the
eligibility review, as well as steps 4 and 5 for those sample cases that
include an ineligible or improper payment.

1 ![](media/image6.wmf)Only the summary sheet for Attachment D is
represented. In order to view the entire workbook, please use the icon
on page XIV-1.

**ATTACHMENT E**

**INSTRUCTIONS FOR CALCULATING EXTRAPOLATED DISALLOWANCES FOR THE TITLE
IV-E FOSTER CARE**

**ELIGIBILITY REVIEWS**

These instructions are to be used for calculating the extrapolated
administrative costs and maintenance payment disallowances for the title
IV-E foster care eligibility reviews for States found to be in
non-compliance during a secondary review. This attachment provides
guidance to the Administration for Children and Families (ACF) Regional
Office on the information required by the ACF statistician to calculate
these disallowances on the basis of extrapolation from the sample to the
universe of claims paid during the duration of the Adoption and Foster
Care Analysis Reporting System (AFCARS) reporting period. The
extrapolated disallowances are based only on the 6 months of the period
under review (PUR). The universe of claims is the Federal Financial
Participation (FFP) share of allowable title IV-E foster care
maintenance payments and administrative costs paid during the 6-month
PUR.

For a review case to count as a sample case, the case must have at least
one maintenance payment during the PUR. For those cases that were
determined to be in error during the 6-month review period and also were
ineligible before or after the PUR (until the end of the service month
that immediately precedes the month of the on-site review),
disallowances for the prior and post PUR will follow the methods
outlined in attachments A, B, and C. Separate FFP disallowances for
maintenance payments and administrative costs will be determined.

Any costs incurred for error cases made after the end of the on-site
review, resulting from cases identified during the PUR, are unallowable.
The State must return the Federal share of funds received (maintenance
payments and administrative costs) by making the appropriate adjustments
on their IV-E-1 report, and cease claiming costs until (and if) the
cases are determined eligible. These post-review costs should be
identified separately in the final report sent to the State agency.

The Regional Office must retain all documentation provided by the State
for calculating maintenance payments and administrative cost
disallowances as part of the review file. This includes the complete
payment history for all sample cases.

**[Instructions for Extrapolated Maintenance Payments
Disallowance]{.underline}** (All calculations are computed using
Microsoft Excel.)

**Step 1** obtains the average Federal Financial Participation (FFP)
maintenance payments ineligible amount (hereafter referred to as "error
dollars") per case. The Regional Office must provide to the ACF
statistician the total amount of FFP dollars for each case in the
sample, on a monthly basis, from the 6-month State payment history. The
statistician also requires the FFP dollars (as determined from the
eligibility review of each case), on a monthly basis, for the ineligible
amounts on error cases and for the improper payment amounts on non-error
cases. The total error dollars apply only to the 6-month AFCARS period
from which the sample was selected. **The completion of attachment D,
using the FFP dollar amount, will provide the information required for
this step and the data needed to compute the national foster care error
rate. (Refer to attachment C for guidance.)** The [average error dollars
per case]{.underline} reviewed will be computed from this information.
(Example: FFP total error dollars of \$132,222.12 divided by 150 cases
equals \$881.48 average error dollars per case.)

**Step 2** calculates the [sample standard deviation]{.underline} of the
FFP error dollars, which is determined from each of the sample cases
error dollar amounts in Step 1. (From the Step 1 data, Excel's STDEV
function computed a value of \$1,942.49.)

**Step 3** computes the [standard error of the mean]{.underline} FFP
error dollars by dividing the sample standard deviation of the FFP error
dollars (Step 2) by the square root of the sample size, which will
customarily be 150. (Example: \$1,942.49 divided by √150 is \$158.57.)

**Step 4** determines the [sampling error]{.underline}, which is
computed by multiplying the standard error of the mean (Step 3) by
1.645, the z-value for a 90 percent confidence interval estimate for the
population mean. (Example: \$158.57 multiplied by 1.645 is \$260.85.)
This z-value is used because the extrapolated disallowance is the lower
limit of the 90 percent confidence interval estimate for the population
total error dollars.

**Step 5** computes the [lower limit of the 90 percent confidence
interval for the average FFP error dollars]{.underline} by subtracting
the sampling error (Step 4) from the average FFP error dollars (Step 1).
(Example: \$881.48 minus \$260.85 yields \$620.63.)

**Step 6** determines the [total number of cases]{.underline} receiving
at least one title IV-E maintenance payment during the 6-month AFCARS
sampling period. This is done by counting all of the cases (not just the
sample size) in the State's AFCARS submission that are coded "1" for
data element 59. This element denotes cases where a title IV-E foster
care payment is being paid on behalf of the child. If necessary, this
total will be adjusted downward according to the number of erroneous
codings, where a "1" was coded instead of a "0" by the State in its
AFCARS submission for the PUR. (Example: the total number of title IV-E
cases was estimated by multiplying 5,928 cases counted with a "1" coded
for AFCARS data element 59 by 150, divided by 186 (reason - it took 186
cases coded as a "1" to yield a 150 actual cases coded as a "1").
Result: 5,928 cases multiplied by 150 equals 8,892, then divide this
total by 186 which equals 4,781 cases.

**Step 7** calculates the [lower limit of the 90 percent confidence
interval for the total FFP error dollars]{.underline} by multiplying the
total from Step 6 (4,781) by the lower limit of the 90 percent
confidence interval estimate for the average FFP error dollars (Step 5).
(Example: 4,781 cases multiplied by \$620.63 is \$2,967,232.) This lower
limit represents the extrapolated disallowance for the total FFP error
dollars.

The ACF, therefore, can conclude that there is a 95 percent probability
that the total FFP administrative cost error dollars are at least this
amount, which is a rather conservative estimate.

**[Instructions for Extrapolated Administrative Cost
Disallowance]{.underline}** (All calculations are computed using
Microsoft Excel.)

**Step 1** obtains the [average number of ineligible months per
case]{.underline}. The Regional Office must provide to the ACF
statistician, for the 6-month AFCARS PUR, the total number of ineligible
months of administrative costs for each error case determined from the
applicable Title IV-E Foster Care Eligibility Review Guide checklist.
**The completion of attachment D, Error Cases Number of Ineligible
Months of Administrative Costs column, will provide the information
required for this step and the data needed to compute the national
foster care error rate. (Refer to attachment C for guidance.)** The
total figure is divided by the sample size (usually 150 cases) to yield
the average number of ineligible months per case. (Example: 293 total
months divided by 150 cases equals 1.95, the average number of
ineligible months per case.)

**Step 2** calculates the [sample standard deviation]{.underline} of
ineligible months, which is determined from each of the 150 ineligible
months count in Step 1. (From the Step 1 data, Excel's STDEV function
computed a value of 2.69.)

**Step 3** computes the [standard error of the mean]{.underline} number
of ineligible months by dividing the sample standard deviation of the
number of ineligible months (Step 2) by the square root of the sample
size, which will customarily be 150. (Example: 2.69 divided by √150 is
0.2196.)

**Step 4** determines the [sampling error]{.underline}, which is
computed by multiplying the standard error of the mean (Step 3) by
1.645, the z-value for a 90 percent confidence interval estimate for the
population mean. (Example: 0.2196 multiplied by 1.645 equals 0.36.) This
z-value is used because the extrapolated disallowance is the lower limit
of the 90 percent confidence interval estimate for the population total
error months.

**Step 5** computes the [lower limit of the 90 percent confidence
interval for the average number of ineligibility months]{.underline} by
subtracting the sampling error (Step 4) from the average number of
ineligibility months (Step 1). (Example: 1.95 minus 0.36 equals 1.59.)

**Step 6** determines the [total number of cases]{.underline} receiving
at least one title IV-E maintenance payment during the 6-month AFCARS
sampling period. This is done by counting **all** of the cases (not just
the sample size) in the State's AFCARS submission that are coded "1" for
data element 59. This element denotes cases where a title IV-E foster
care payment is being paid on behalf of the child. If necessary, this
total will be adjusted downward according to the number of erroneous
codings, where a "1" was coded instead of a "0" by the State in its
AFCARS submission for the PUR. (Example: the total number of title IV-E
cases was estimated by multiplying 5,928 cases counted with a "1" coded
for AFCARS data element 59 by 150, divided by 186 (reason - it took 186
cases coded as a "1" to yield a 150 actual cases coded as a "1").
Result: 5,928 cases multiplied by 150 equals 8,892, then divide this
total by 186 which equals 4,781 cases.

**Step 7** calculates the [lower limit of the 90 percent confidence
interval for the total number of ineligibility months]{.underline} by
multiplying the total from Step 6 (4,781 cases) by the lower limit of
the 90 percent confidence interval estimate for the average number of
ineligibility months (Step 5). (Example: 4,781 cases multiplied by 1.59
equal 7,602 months.)

**Step 8** computes a [weighted monthly administrative
cost]{.underline}. The Regional Office should obtain from GATES or the
ACFY-IV-E-1 form (Part 1) the following data for the two quarters
comprising the 6-month AFCARS sampling period and the previous six
quarters and provide this information to the ACF statistician by quarter
for each of the eight quarters. **(The completion of attachment F, using
the FFP dollar amount, will provide the information required for this
step.)**

> a\. The FFP administrative costs reported in column (b) Federal Share
> of the Current Quarter Expenditures the amounts on lines 5a. (Case
> Planning & Management) and 5e. (Other Administration).
>
> b\. The FFP administrative costs reported in column (d) Federal Share
> of the Prior Quarter Adjustments the amounts listed on lines 5a. (Case
> Planning & Management) and 5e. (Other Administration).
>
> c\. The average monthly number of children from column (b) Federal
> Share of the Current Quarter Expenditures on line 4 (Avg Monthly No.
> of Children).
>
> d\. The weighted average monthly administrative cost is calculated by
> the ACF statistician using a Microsoft Excel spreadsheet. (The yield
> for this example is \$310.51.)

**Step 9** calculates the [lower limit of the 90 percent confidence
interval for the total FFP administrative cost error
dollars]{.underline} by multiplying the lower limit of the 90 percent
confidence interval for the total number of ineligibility months (Step
7) by the weighted monthly administrative cost computed in Step 8.
(Example: 7,602 months multiplied by \$310.51 yields a total of
\$2,360,497.) This computation provides the extrapolated disallowance
for the total FFP administrative cost error dollars.

The ACF, therefore, can conclude that there is a 95 percent probability
that the total FFP administrative cost error dollars are at least this
amount, which is a rather conservative estimate.

![](media/image7.wmf)

[^1]: The Child Welfare Policy Manual may be accessed at
    [www.acf.hhs.gov/programs/cb/laws_policies/]{.underline}.

[^2]: Federal financial participation may be claimed for the
    administrative costs associated with an otherwise title IV-E
    eligible child placed in an unlicensed foster family home. Refer to
    Program Instruction ACYF-CB-PI-02-08.