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. e du/thir dc ir c uit_2012/1207PRECEDENTIAL

UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT

_____________

No. 10

- 4584

_____________

COMMONWEALTH OF PENNSYLVANIA

,

DEPARTMENT OF PUBLIC WELFARE, Appellant

v.

KATHLEEN SEBELIUS, SECRETARY OF HEALTH AND
HUMAN SERVICES

____________ _
On Appeal from the United States District Court for the Western District of Pennsylvania (D.C. Civil No. 2

- 09

- cv

- 00808 ) District Judge: Hon orable William L. Standish

_____________
Argued October 2 5 , 2011

Before: FISHER, VANASKIE and ROTH, Circuit Jud ges

(Filed : March 15, 2012 )2 Jason W. Manne, Esq. ( Argued )
Office of General Counsel Department of Public Welfare 301 Fifth Avenue,
Suite 430 Pittsburgh, PA 15222 Counsel for Appellant

Linds e y Powell, Esq. ( Argued ) United States Department of Justice Appellate Sect ion
Room 7240 950 Pennsylvania Avenue, N.W. Washington, DC 20530

- 0000

Mark B. Stern, Esq. United States Department of Justice
Civil Division
Room 7531 950 Pennsylvania Avenue, N.W. Washington, DC 20530

- 0000 Counsel for Appellee

_____________

OPINION

__ ___________

VANASKIE, Circuit Judge

.
The Pennsylvania Department of Public Welfare (“DPW”) appeals a decision of the United States District Court for the Western District of Pennsylvania that sustained a directive of the United States Department of Healt h and3 Human Services (“HHS”) that DPW must remit to the federal government more than $5.6 million in overpayments recovered by DPW under the Aid to Families with Dependent Children (“AFDC”) program. DPW also appeals the District
Court’s dismissal of a Fre edom of Information Act (“FOIA”) claim for lack of standing. Discerning no error in the District Court’s ruling s , we will affirm its judgment.

I.

A. Statutory and Regulatory Framework

The Aid to Families with Dependent Children ( “ AFDC ” ) program was estab lished by Title IV

- A of the Social Security Act of 1935, 42 U.S.C. §§ 601

- 617

, to assist states in providing aid to needy children and their families. The AFDC program provided for federal reimb ursement of a percentage of all qualifying state expenditures, which were calculated and reported on a quarterly basis. 42 U.S.C. § 603(a)(1994)

. The AFDC was considered an “open

- ended
entit lement program” because there was no cap on the amount of federal funds a state could receive in a fiscal year , and
states were reimbursed f or all qualifying expenditures.

The AFDC program also established a procedure for recovering and accounting for pay ments that states made to recipients who were ineligible to receive them

. The program required states to recover these overpayments, either by collecting direct cash repayments from the recipients, or through offsets to a future cash assistance payment. 45 C.F.R. § 233.20(a)(13). Because the AFDC recipients were needy, states generally recovered overpayments in installments over a period of time. Once the overpayments were recovered, states were required to report the amounts4 collected in their quarterl y financial reports to HHS , which was responsible for administering the program

. 45 C.F.R. § 201.5(a)(3). Federal payments for future quarters were then reduced pro rata by the federal share of the amount recovered by the state in the prior quarter. 42 U.S.C. § 603 (b)(2) (1994).

In 1996, Congress passed the Personal Responsibility and Work Opportunity Reconciliation Act ( “ PRWORA ” ),
Pub. L. No. 104

- 193, 110 Stat. 2105 (1996) (codified at 42 U.S.C. §§ 601 et seq. ), which replaced the AFDC program with the Temporary Assistance for Needy Families ( “ TANF ” ) grant program. TANF was designed to gi ve states greater flexibility in admin istering their welfare programs while reducing total federal welfare spending. States that are eligible to participate in TANF receive an annual “block grant” from HHS, and thus, unlike the AFDC program,
TANF imposes a cap on the total federal funds each participating state is entitled to receive annually.

PRWORA § 116(b)(3) establishes guidelines for the
close

- out of state AFDC programs during the transition to
TANF. I n relevant part , it provides :

Claims made with r espect to State expenditures under a State plan approved under part A of title IV of the Social Security Act (as in effect on September 30, 1995) with respect to assistance or services provided on or before September 30, 1995, shall be treated as claims wi th respect to expenditures during fiscal year 1995 for purposes of reimbursement even if payment was made by a State on or after October 1, 1995. Each State shall complete the filing of all claims under the State plan (as so in effect) within 25 years afte r the date of the enactment of this Act. The head of each Federal department shall

— (A) use the single audit procedure to review and resolve any claims in connection with the close out of programs under such State plans.

PRWORA, Pub. L. No. 104

- 193, § 116 (b)(3), 110 Stat. 2105 (1996).

The “single audit procedure” to which reference is made in § 116(b)(3) is established by the Single Audit Act of 1984 ( “ SAA ” ), 31 U.S.C. §§ 7501

- 7507

. Under t he SAA, “[e]ach non

- Federal entity” that expends at least $300,000 of Federal awards in a fiscal year “shall have either a single audit or a program

- specific audit made for such fiscal year in accordance with the requirements of this chapter.” 31 U.S.C. § 7502(a)(1)(A)

.

The Administration for Children and Families ( “ ACF ” ), the division of HHS responsible for administering
the former AFDC and current TANF program s , interpreted §
116 in a series of program instructions (“PI”s) that clarified ACF policy for th e recovery of AFDC overpayments and provided the states with directions for closing out the ir AFDC
accounts in accordance with § 116

. On March 9, 1999, ACF
iss ued PI 99

- 2, which requ ired states to remit to HHS the federal share of recovered overpayments made to recipients on or before September 30, 1996, but permitted states to retain the full amount of recovered overpayments of AFDC or TANF funds paid to recipients after October 1, 1 996, with the recovered overpayments to be applied towards TANF program costs. PI 99

- 2 also provided that states must submit the federal share of overpayments to the ACF in quarterly
checks. On May 1, 2000, ACF issued PI 99

- 2 (Revised),6 which permitted s tates to retain the full amount of recovered overpayments but stated that “the amounts recovered must be credited against the current grant in the fiscal year in which the overpayment was recovered.” (A. 122

- 2 3

. )

On September 1, 2000, ACF issued PI 2000

- 2, which
rescinded PI 99

- 2 and PI 99

- 2 (Revised) and replaced them with a new overpayment recovery policy. PI 2000

- 2 reiterated the continuing requirement to remit the federal
share of recovered AFDC overpayments. PI 2000

- 2 required
the states to remit t he f ederal share of pre

- October 1, 1996 overpayments to ACF by check

, and provided the states with instructions for making these repayments going forward. It also provided that it was only “effective for recoveries made after 9/30/96,” and th at “[r]ecover ies made prior to the date of this transmittal [ i.e. , September 1, 2000] will be evaluated on reasonable interpretation of statutory requirements or any previous guida nce provided by ACF.” (A. 125

. )

B. Factual and Procedural Background

In August 2007, th e HH S Office of Inspector General ( “ OIG ” ) conducted a nationwide audit to determine whether states were complying with the requirements to reimburse the federal share of recovered AFDC overpayments made before October 1, 1996. According to t he OIG report, of the 43 states reviewed, 24 states had complied with the f ederal requirements and reimbursed ACF for overpayment
recoveries fr om July 2002 through June 2006, while 19 states
and the District of Columbia continued to collect overpayments, but did not rei mburse ACF $28.7 million for
the federal share of recoveries

. T he OIG report recommended that ACF collect the f ederal share of the7 overpayments from the states that had not complied with the reimbursement requirements.

The OIG audit found that the Pennsy lvania DPW

, the

state agency responsible for administering the former AFDC
and current TANF program s , had recovered $10,598,09 5 in AFDC overpayments from October 1, 1996 t hr o ugh June 30, 2006, but had not reimbursed ACF for the federal share of $5,609,572. Pursuant to this audit, on June 26, 2008, the OIG sent a letter to DPW requesting remittance of t he federal share of $5,609, 572 by check made payab le to HHS within 30 days.

DPW appealed this reimbursement request, or “disallowance,” to the HHS Departmen tal Appeals Board ( “ DAB ” or “Board” ). DPW did not contest the OIG audit findings with respect to either the amount of AFDC overpayments recovered or the calculation of the federal
share

. Rather, it challenged HHS’ authority to conduct the
audit. It argu ed that PRWORA § 116 (b) designates the SAA

as providing the exclusive audit procedure for the close

- out of the AFDC program, and thus precludes HHS from requiring
reimbursement based on the results of its own audit

. DPW
submitted declarations stating that its federal programs, including TANF, had been subject to SAA audits since 1996, and that none of the audits had taken any “exc eption . . . or finding . . . relative to DPW’s retention of overpayment

recov eries from the [AFDC] program. ” ( A

. 16 1

. ) DPW

ar gued that HHS was bound by the results of these audit s

.

DPW also argued that it was entitled to retain the recovered overpayments under HHS policies. It contended
that PI 2000

- 2 permitted it to retain the over payments collected before September 1, 2000, because “it was not8 unreasonable for the State to interpret” PRWORA as allowing
it to do so . (A. 69

. ) It also claimed that it was entitled to
retain the over payments collected after September 1, 2000,
because even if its retention of overpayments violate d ACF policy in the various PIs

, § 116 prohibited ACF from issuing
such guidance documents to the states. DPW also advanced a separate argument that the DAB could not give stare decisis effect to its prior decisions addressing AFDC overpayments in the TAN F period because the agency had not properly
indexed those decisions in accordance with the Freedom of Information Act ( “ FOIA ” ) requirements that agencies maintain published indices of their final decisions. 5 U.S.C. § 552(a)(2 )

.

In a decision issued o n April 16, 20 09, the DAB rejected each DPW argument and upheld the HHS
determination requiring DPW to remit the federal share of $5,609, 572 to HHS. The DAB held that the reference to the SAA in § 116(b) does not preclude HHS from relying on the
accurate results of its own audit of the s t ate s ’ accounting of federal grants. It also held that DPW is not entitled to retain
the funds under either federal appropriations law or the

sta tutory limits on T ANF grants. The DAB also rejected the
DPW challenge to its precedent , holding that the website indexing its decisions satisfies FOIA requirements

.

In June 2009, DPW sought judicial review of the DAB
decision in the District Court for the Western District of Pennsylvania. Count One of its Complaint challenged the agency’s decision under the Administrative Procedure Act ( “ APA ” ) , 5 U.S.C. § 706(2)

, on two grounds. First, it argued
that the D AB decision upholding the reimbursement directive “was not in accordance with law,” reasserting its argument9 that PRWORA designate s the SAA procedure as the exclusive audit procedure. Second, it claimed that the
conclusion that DPW was not entitled to retain the fed eral share of the AFDC overpayment r ecoveries under substantive
law was “arbitrary, cap ricious and contrary to law.” ( A

. 20

. )
Count two raised a FOIA claim based on HHS’ alleged failure to maintain an adequate published index of its prior
decisions. Whil e DPW conceded that it was not prejudiced by
this alleged failure in the instant dispute, it sought ongoing injunctive relief to compel HHS to comply with FOIA requirements.

In an order entered on October 14, 2010 , t he District
C ourt granted summary judgm ent for HHS on both counts.
On Count On e, the C ourt first held that the DAB reasonably rejected DPW’s “procedural” argument , concluding that there was no support for the assertion that PRWORA prohibits HHS from conducting its own audit. The District C our t next held that the conclusion that DPW was not substantively

ent itled to retain the federal share of the recovered overpayments was not arbitrary, capricious, or contrary to
law. On Count T wo, the District C ourt held that DPW lack ed standing to raise th e FOIA claim because it had alleged no injury from the allegedly inadequate indices. DPW now appeals the District C ourt’s decision.

II.

We have jurisdiction over this appeal pursuant to 28 U.S.C. § 1291

. We apply de novo review to a district court’s grant of summary judgment in a case brought under the APA, “and in turn appl y the applicable standard of review to the underlying agency decision.” Cyberworld Enter. Techs., Inc. v. Napolitano , 602 F.3d 18 9, 195

- 96 (3d Cir. 2010)

. The10 underlying agency decision is reviewed under the APA, which requires courts to set aside an agency decision that is “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law,” or that was conducted “without observance of procedure required by law.” 1

III. 5 U.S.C. §§ 706(2)(A) & (D); Chao v. Roy’s Const., Inc. , 51 7 F.3d 180, 186 (3d Cir. 2008)

. With respect to the grant of summary judgment on the FOIA claim, we review dismissals for lac k of standing under a de novo standard. Common Cause of Pa. v. Pennsylvania , 55 8 F.3d 249, 257 (3d Cir. 2009)

.

Section 603(b)(2) of Title 42 describe s t he methods for computing federal payments to the states and provide s that
the amount shall be:

1 DPW's challenge to the D AB's interpretation of PRWORA's transition provision raises the question whether deference is appropriate under Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc. , 467 U.S. 837 (1984). The
District Court concluded that Chevron deference is inapplica ble (see A. 45

- 53), and although HHS does not raise this issue, DPW contends that the DAB decision is not entitled to deference. (DPW Reply at 1

- 2). Recently, we held that the DAB's interpretation of statutory provisions that are part of the Medicaid pro gram is entitled to Chevron
deference. See Pa., Dep’t of Pub. Welfare v. U.S. Dep’t of
Health & Human Services , 647 F.3d 506, 510

- 11 (3d Cir. 2011). We find it unnecessary to decide whether our recent decision is applicable in the context presented here, as we find that the DAB decision withstands plenary review.11 [R]educed by a sum equivalent to the pro
rata share to which the United States is equitably entitled, as determined by the Secretary of Health and Human Services

, of the net amount recovered during any prior quarter by the State or any political subdivision thereof with respect to aid to families with dependent children furnished
under the S tate plan.

42 U.S.C. § 603(b)(2)(B) (repealed). Although PRWORA repealed most of the AFDC , § 116(b)(2) preserves certain powers and responsibilities under the AFDC, including :

[A] dministrative actions and proceedings
commenced before such date [of the AFDC’s

r epeal] , or authorized before such date to be

co mmenced, under such provisions.

42 U.S.C. § 116(b)(2)(B)

. The HHS letter requesting
remittance of the f ederal share of AFDC overpayments ma de through September 30, 1996, is a collection proceeding that
was “authorized . . . to be commenced” before the AFDC was repealed. Specifically, 45 C.F.R. § 74.72(a) provides:

(a) The closeout of an award does not affect any of the following: (1) the right of the HHS awarding agency to disallow costs and
recover funds on the basis of a later audit or other review. (2) The obligation of the recipient to return any funds due as a result
of later r efunds, corrections, or other
transactions.12 ( E mphasis added). Thus, even after “[t]he closeout of an award,” this regulation preserves both HHS’ authority “to
disallow costs and recover funds on the basis of a later audit,” and DPW’s obligation, as a reci pient of funds, “to return any funds due as a result of later refunds.” Id.

The statutory scheme therefore authorizes HHS’
disallowance letter and establishes at the very least its presumptive entitlement to the requested funds

. DPW challenges this conc lusion by advancing various legal theories why the reimbursement directive was unauthorized, and why , in any event, DPW is entitled to retain the funds

. For the reasons set forth herein, we reject each of these arguments

.
DPW challenges HHS’ authority to require the disallowance by claiming that PRWORA’s transition provision, § 116(b)(3)(A), prohibits it. Section 116(b)(3)(A) provides:

The head of each Federal department shall

— (A) use the single audit procedure to review and
resolve any claims in connecti on with the close out of programs under such State plans.

(E mphasis added). Emphasizing the seemingly mandatory “shall use” and broad “any claims” language, DPW interprets this provision to mean that HHS must rely on the results of audits conducted pursua nt to the SAA procedure in resolving all claims relating to the close

- out of the AFDC program

— including federal claims for the federal share of recovered AFDC overpayments. Accordingly, DPW reasons that this provision prohibits the HHS reimbursement deman d, which relied on the result of the OIG audit. Moreover, DPW argues13 that since HHS is bound by the results of the SAA audits, which took no exception to DPW’s failure to remit the federal share of its AFDC overpayments between October 1996 and June 2006, HHS has no authority for its demand

.
DPW argues that this interpretation is consistent with PRWORA’s overall statutory scheme and purpose. As evidence of this purpose, DPW cites 42 U.S.C. § 617, which provides:

No office r or employee of the Federal
Gover nment may regulate the conduct of States under this part or enforce any provision of this part, except to the extent expressly provided in this part.

This section narrowly circumscribes the scope of HHS

au thority with regard to TANF, and the legislative history of this provision evinces Congress’ intent in this regard:

Many S tates are highly critical of the current welfare system’s lack of flexibility and high degree of Federal regulation. This provision i s designed to explicitly restrict the ability of Federal officials to regulate State block grant programs, except as specifically provided under the committee proposal.

House Report 104

- 651, at 137 1 (emphasis added)

. However, the language of § 617 and the legislative history indicate that this provision limits HHS authority only with respect to TANF, and not with respect to the AFDC program. Accordingly, this provision does not affect our interpretation of HHS authority to disallow AFDC overpayments.14 DPW also asserts that § 116(b)(2)(B), discussed supra ,

“ prohibit[ s ] HHS from issuing any new policies relative to the AFDC program that would bind the single auditors.” ( DPW
Br. at 16.) DPW reasons that these provisions and the legi slative history reflect Congress’ intent to create a “‘hands off’ approach to Federal interfer ence” with TANF. ( Id. ) It argues that § 116(b)(3)(A) should be construed, consistent with the overall statutory purpose, as prohibiting HHS from relying on its own audit procedures in resolving AFDC

related claims.

DPW’s interpretation of the pertinent statutory provisions is only plausible when the language of § 116(b)(3)(A)

— particularly the “shall use” and “any claims”

terms

— is read in isolation from the relevant statutory context
and definitions. We, however, agree with the DAB and District Court that the meaning of the provision must be determined in light of the relevant statutory context. Following this approach, we concur with the ir interpretation of § 116(b)(3)(A) as permitting HHS to conduct its own
audits in addition to the single audit procedure employed by
DPW . We reach this interpretation after identifying two
flaws in DPW’s in terpretation of the provision.

A. “Any Claims”

F irst, we conclude that § 116(b)(3)(A)’s directive

— to use the SAA procedure to resolve “any claims” connected
with the close

- out of AFDC programs

— does not apply to
federal claims for the federal share of recovered AFDC overpayments. DPW’s contrary interpre tation depends on reading the words “any claims” in isolation from the relevant

context

. As the District Court observed, the phrase “any15 claims” must be considered in the context of the entirety of § 116(b)(3), which provides:

CLOSING OUT ACCOUNT FOR THOS E
PROGRAMS TERMINATED OR
SUBSTANTIALLY MODIFIED BY THIS
TITLE

. — In closing out accounts, Federal and State officials may use scientifically accept able statistical sampling techniques. Claims made with respect to State expenditures under a State plan appr oved under part A of title IV of the Social Security Act (as in effect on September 30, 1995) with respect to assistance or services provided on or before September 30, 1995, shall be treated as claims with respect to expenditures during fiscal year 1995 f or purposes of reimbursement even if payment was made by a State on or after October 1, 1995. Each State shall complete the filing of all claims under the State plan (as so in effect) within 2 years after
the date of the enactment of this Act.

(E mphasis a dded). The following subpart, § 116(b)(3)(A), then provides that “[t]he head of each Federal department
shall

— (A) use the single audit procedure to review and resolve any claims in connection with the close out of programs under such State plans.” Thus, the words “any
claims in connection with the close out of programs” appear in the context of a provision that discusses “claims” exclusively in terms of state claim s: claims that states must file for state expenditures made under state plans. Moreover,
th e subsequent sub part of § 116(b)(3) reinforces the exclusive focus of this provision on “state” claims:16 The head of each Federal department shall

— . . . (B) reimburse States for any payments made for assistance or services provided during a prior fiscal ye ar from funds for fiscal year 1995, rather than from funds authorized by this title.

§ 116(b)(3)(B). Thus, the surrounding statutory text indicates that this provision is concerned with claims that the states make for reimbursement from the federal govern ment for their expen ditures under the AFDC program.

That the phrase “any claims” in § 116(b)(3)(A) refers to claims asserted by a state is made especially clear in the sentence immediately preceding § 116(b)(3)(A). This sentence establishes the filing de adline for state claims

, i.e.

, two years after the enactment of the legislation . ACF explained this requirement in PI 97

- 4, which “provide[d] guidance to States for the closeout of the AFDC” and detailed some of the procedures for transitioning to TANF in accordance with § 116. (A. 211.) Explaining the meaning of this sentence, PI 97

- 4 noted: “ all expenditures that a State
claims pursuant to these instructions” must, among other requirements, “meet the two year limit for filing claims for expenditures, i n accordance with Section 1132 of the Social Security Act and 45 CFR Part 95 , Subpart A.” (A. 211 (emphasis added)

. )

Section 1132 of the Social Security Act p rovides for a

two

- year period for filing “ any claim by a S tate for payment with respect to an expenditure made during any calendar quarter by the State

— (1) in carrying out a State plan

. . . . ” 42 U.S.C. § 1320b

- 2(a) (emphasis added). Additionally, 45 C.F.R. § 95.4 defines “claim” as follows : “In this subpart

— . .

. Claim means a request for Federal financial participation in17 the manner an d format required by our program regulations,
and instructions and directives issued thereunder.” 45 C.F.R. § 95.4 (emphasis added).

Section 116(b)(3) is focused exclusively on state
claims for federal reimbursement. None of the surrounding statutory language contemplates federal claims for states to repay the federal share of recovered AFDC overpayments.
F urthermore, the two

- year filing period plainly could not contemplate HHS claims for state

- recovered AFDC overpayments given the fact that recoupment of overpayments from welfare be neficiaries occu r s over a course of many years.

DPW contends that “[w]hen Congress wants to refer to State claims, it customarily uses the modifier ‘state’ in close conjunction with the word ‘claim,’ ” and points out that this modifier “state” “appears throughout § 116(b)(3), except in the clause at § 116(b)(3)(A).” (DPW Br. at 17

. ) It concludes: “Had Congress wanted to tie back the words ‘any claims’ to the earlier references to state claims, it wou ld have said ‘HHS shall use the single audit procedure to review and solve such claims.’” ( Id. ) This argument invokes an expressio unius type of logic: that the inclusion of “state” in the preceding discussion of claims is purpos eful, and therefore, so too is the omission of this qualifier in the ensuing subpart

.
Even assuming arguendo that Congress “customarily” refers to state claims by including “state” in close conjunction
with “claim”

— a sweeping hypothesis about statutory wr iting
for which DPW offers no evidence

— it does not follow that Congress would include that modifier where it is evident from the context that it refers to state claims. In any event, we do not agree that “any claims” is unconnected to the word “state”18 in § 116(b)(3)(A). In fact, this provision makes such a link, as it says: “any claims in connection with the close out of programs under such State plans.” § 116(b)(3)(A). This language tracks the preceding sentence, which makes clear the type of claims th at are “in connection with the close out”:

“ all claims under the State plan ” that states must file within a

two

- year deadline. § 116(b)(3). Indeed, the reference to “such State plans” indicates that § 116(b)(3)(A) clearly refers back to this preceding se ntence, which was concerned only
with “state” claims.

DPW also challenge s this interpretation by invoking the Supreme Court’s statement that “the words ‘any claim’ are sweeping words in common usage.” ( DPW Br. at 17

, quoting Unite d States v. Yellow Cab , 340 U.S. 543 (1951)

. ) DPW’s argument , however, is untethered from the context of
the Yellow Cab Court’s statement

. I n Yellow Cab , the Court

was con sidering whether the United States could be sued for
contribut ion by a joint tortfeasor under the Federal Tort
Claims Act when it remarked: “ T he words ‘any claim against the United States . . . on account of personal injury’ are broad words in common usage . They are not words of art.” 340
U.S. at 548 . Thus, the Court was considering the meaning of the words “any claim” in a statute concerning tort claims against the United States. By contrast, in the current case we
consider the m eaning “any claims” in the context of a provision that has narrowed the discussion to a particular category of state claims. The statement in Yellow Cab does not require us to disregard this context and interpret it as referring to the broad category of “ any” claim that could be brought “in connection with the close out of” AFDC

programs.19 W hen viewed in their fixed position within the relevant context, we think the words “any claims” are reasonably read as referring to the narrower category of state
claim s for federal reimbursement of state expenditures,
submitted within the two

- year filing period. We therefore
conclude that the single audit directive in § 116(b)(3)(A) does not apply to federal claims for state reimbursement of the
federal share of recove red AFDC overpayments.

B. “Shall Use”

Second, even if “any claims” does include federal
claims for state reimbursement of the federal share of recovered AFDC overpayments, we nevertheless find that § 116(b)(3)(A) did not require ACF to rely on the results of
SAA audits in order to require reimbursement . DPW’s argument that the provision prohibits ACF from conducting its own audit is predicated on its interpretation of the “shall . . . use the single audit procedure” language as imposing a mandatory require ment on ACF to rely on the results of the single audit procedure. However, a close examination of the statutory context, including the SAA, supports the conclusion that “using” its procedure does not require exclusive reliance
on it.

“[T]he single audit p rocedure” refers to the method for conducting audits under the SAA, which provides that method as part of a scheme for reducing the burden on federal funding recipients of complying with various audit requirements. As the SAA states: “An audit conducted i n accordance with this chapter shall be in lieu of any financial
audit of Federal awards which a non

- Federal entity is required to undergo under any other Federal law or regulation.” 3 1 U.S.C. § 7503(a) . However, the SAA also expressly20 preserves the authority of federal agencies to conduct their
own audits:

Notwithstanding subsection (a), a Federal agency may conduct or arrange for additional audits which are necessary to carry out its responsibilit ies under Federal law or regulation. The provisions of this chapter do not authorize

any non

- Federal entity (or subrecipient thereof) to constrain, in any manner, such agency from carrying out or arranging for such additional audits, except that the Feder al agency shall plan such audits to not be duplicative of other audits
of Federal awards.

3 1 U.S.C. § 7503(b) . Therefore, while the SAA prohibits ACF from requiring DPW to conduct more than one audi t of
its Title IV

- A program in any fiscal year, it does not restrict ACF from conducting its own audit when “necessary to carry out its responsibilities under Federal law or regulation.” Id.
Because the HHS audit was necessary to enable HHS to complete its responsibility to monitor state expend itures under the AFDC program, the HHS audit was not precluded by the SSA.

DPW resists this interpretation, reasoning that the requirement to use the SAA procedure implicitly precludes
H HS from using an “exception to th at procedure.” (DPW Br. at 18.) We disagree. The SAA preserves a federal agency’s authority to carry out additional audits as necessary, and there is no indication in § 116(b)(3)(A) that Congress intended to depart from this feature of the SAA. We do not believe that Congress would attempt to convey this purpose by referring to the SAA, which expressly preserves agency authority to21 conduct audits. Rather, if Congress intended to designate only one part of the SAA and ex clude application of the rest of the Act, we believe it would have manifested this intent more clearly. When considered in light of the SAA, the most reasonable interpretation of § 116(b)(3) is that it restricts HHS from imposing additional audit requirem ents on states in the process of closing out their AFDC programs, but does not preclude HHS from conducting its own audits. We therefore conclude that § 116(b)(3)(A) does not prohibit HHS from relying on the results of its own audit in order to require DP W to remit the federal share of recovered AFDC overpayments.

C. DPW’s Remaining Arguments

DPW next argues that even if HHS is not bound by the results of the single audit, Pennsylvania is nonetheless
entitled to retain the federal share of recovered AFDC

o verpayment s under substantive law. DPW advances several disjointed arguments to defend its entitlement to the funds

. F or the sake of clarity, we will address each of the arguments according to the asserted legal basis of the claim

.

1. “Equitable Entitlement ” u nder 42 U.S.C. § 603(b) and PRWORA § 116(b)(2)(B )

DPW argues that “ whether or not HHS is entitled ” to recover the federal share of Pennsylvania’s recovered AFDC overpayments “depends upon whether [HHS] is ‘equitably
entitle d’” to the funds under § 603( b) of the old AFDC

statute. (DPW Br. at 20

- 21.) This provision stated

, in relevant part

, that the HHS Secretary shall compute the amount to be paid to each state, which amount shall be:22 [R]educed by a sum equivalent to the pro rata
share to which the Uni ted States is equitably entitled, as determined by the Secretary of [HHS] , of the net amount recovered during any prior quarter by the State or any political subdivision thereof with respect to aid to families with dependent children furnished
under the S t ate plan

.

42 U.S.C. § 603(b)(2) (B) (repealed) (emphasis added). DPW

argues that PRWORA § 116(b)(2)(B) stripped the HHS Secretary of the authority to make this determination under
the repealed AFDC, because this administr a tive action was
not “commenced . . . or authorized . . . to be commenced ” prior to the effective date of PRWORA on July 1, 1997. (DPW B r. at 20

, quoting PRWORA § 116(b)(2)(B)

. ) I n this
ostensible vacuum of authority, argues DPW

, “it was up to
the S tate ( or the single auditors . . . ) to decide whether HHS was equitably entitled to a refund.” ( Id. at 21. ) S ince “[n]either of these parties made such a determination,” DPW neatly concludes that it is entitled to retain the f unds. ( Id. )

First, we agree with the view taken by the District Court, which rejected DPW’s contention that § 603(b) required the HHS Secretary to make an “explicit finding of equitable entitlement.” ( A

. 31

. ) Second, w e reject DPW’s claim that § 116(b)(2) stripped HHS of its authority to seek
reimbursement. To the contrary, a s discussed supra , § 116(b)(2)(B) preserves HHS’ authority to disallow the federal share of recovered AFDC overpayments bec ause it wa s a collection proceeding that was authorized under 45 C.F.R. §
7 4.72(a) to be commenced prior to PRWORA’s effective
date. E ven if it were not the case that PRWORA preserves23 HHS’ authority in this regard, we are not persuaded by
DPW’s claim that the equitable entitlement determination would fall by default to DPW or the single auditors

. DPW offers no explanation for this conclusion, and we discern no plausible basis for it

.

2. Unambiguous Statutory Repayment
Conditions

DPW next argues that it is not required to reimburse
HHS because the repayment obligation was not stated unambiguously in the AFDC , and is therefore invalid. 2

2 While DPW acknowledges that it “did not argue for the grant

- law standard for review below,” it insists that “a party cannot waive the proper standard for review in the Court of Appeals” and acc ordingly this Court “has an obligation to apply the correct legal standard.” (DPW Reply at 3, n. 2, citing In re Cmty. Bank of N. Va. , 622 F.3d 275, 290 (3d Cir. 2010) (“[W]hether an incorrect legal standard
has been used . . . is an issue of law to be reviewed de

novo .”)). DPW’s argument appears to be substantive, rather
than a standard for review of a claim. We need not resolve that issue, howe ver, because DPW’s argument lacks merit. For this proposition it cites Pennhurst State School & Hosp. v. Halderman , 451 U.S. 1 (1981)

, and its progeny, which upheld Congress’ power to attach conditio ns to federal grants to states so long as the conditions are stated unambiguously.
451 U.S. at 17

. To determine whether a statute satisfies this clarity r equirement, courts “ask whether . . . a state of ficial would clearly understand . . . the obligations” of the law, and
“w hether the [statute] furnishes clear notice regardin g the24 liability at issue in [the] case .” Arlington Cent. School Dist. Bd. of Ed uc. v. Murphy , 548 U.S. 291, 296 (2006)

.

DPW asserts that “th e question before the Court thus reduces to whether the old AFDC statute, as modified by the transition provision of PRWORA, unambiguously requires Pennsylvania to make repayment of the Federal portion of the AFDC overpayment collections.” (DPW Reply at 2

- 3

. )
DPW contends that “[t]here is no unambiguous repayment condition in the statute,” and effectively reassert s its arguments about 42 U.S.C § 603(b) and PRWORA §
116 (b)(2). ( Id. at 3

. ) I t claims that 42 U.S.C. § 603(b)(2)

, which require d the s tates’ f unds to be reduced by the “pro rata share to which the United States is equitably entitled, as determined by the [HHS] Secretary

, ” does not impose a mandatory repayment obligation , but rather calls for a “discretionary determination.” ( Id. ) DPW then argu es that § 116(b)(2) revoked the Secretary’s authority to determine whether HHS was “equitably entitled” to repayment , and that the authority to make this decision was transferred to the single auditors, who “made no such determination here.” ( Id. )

DPW’s argument relies on misunderstandings of both
the Pennhurst clear notice requirement and § 603(b)(2)

. The rationale underlying the Pennhurst requirement i s that

, because a conditional grant is akin to a contract, recipients of
feder al funds should accept the attached conditions “voluntarily and knowingly.” 451 U.S. at 17

. “States cannot knowingly accept conditions of which they are ‘unaware’ or which they are ‘unable to ascertain.’” Arlington , 548 U.S. at
296 ( quoting Pennhurst , 451 U.S. at 17 ). Yet, DPW does not
demonstrate that it was unaware or unable to ascertain that §25 603(b)(2) created a repayment obligation

. DPW’s only argument in this regard

— that the repayment obligation depended on the Secretary’s “ discretionary determination that HHS was ‘equitably entitled’ to return of the money”

— is unavailing. (DPW Reply at 3.) Section 603(b)(2)(B) provides clear notice to states that the federal payments they
receive will be “reduced by a sum,” i.e. , the share to which the federal government is “equitably entitled.” The fact that the Secretary is responsible for determining the amount of

t his federal share in no way renders the c ondition ambiguous. Even assuming that this determi nation is “discretionary,” thi s does not run afoul of Pennhurst

, which merely requires that
states have clear notice of conditions on accepting federal funds, and imposes no requ irement that such conditions be
unconditional.

3. HHS Program Instructions

DPW also argues that the p rogram i nstructions HHS issued during the TANF period authorized DPW to retain the
disallowed funds. DPW cites PI 2006

- 03, which ACF issued on June 20, 2006, and which stated that a state’s retention of recoveries made prior to the date of that transmittal would be evaluated “on reasonable interpretation of statutory requirements.” (A. 133 .) DPW argues that because its interpretation of the statute “is reasonable, so it is entitle [sic] to retain the AFDC overpayment collections.” (DPW Br. at
23

. ) In this rega rd it asserts, without citation to any authority,
that “ [t] o demonstrate reasonableness the Court need only ask itself if the arguments for state retention of the money would
be sustained if HHS advanced them

, ” and unsurprisingly
concludes that in its case , “[i] t should be clear that they
would.” ( Id. ) DPW then reasons that “[s]ince HHS is bound26 by its own guidance saying that it would accept any reasonable interpretation of PWORA . . . Pennsylvania is
entitled to retain the funds. ” ( Id. , citation omitted .)

T he District Court rejected DPW’s argument that it “reasonably interpreted PI 99

- 2 (Revised) to permit retention of the AFDC overpayments” recovered before September 1,
2000. (A. 23

. ) The District Cour t correctly held that PI 99

- 2 (Revised) required states to credit the federal share of recovered AFDC overpayments “against the TANF grant in the fiscal year in which the overpayments were recovered

. ”
Because DPW “supplemented its TANF grants” with the
fu nds

, rather than crediting them, it did not reasonably rely on that program instruction. (A. 2 4. )

4. F ederal Appropriation s Law under 31
U.S.C. § 1301(a)

DPW also argues that the District Court erred in upholding the DAB’s decision that the State had no rig ht to retain the federal share of the AFDC overpayment recoveries
under Federal appropriations law

. Section 130 1(a) provides that Federal “[a]ppropriations shall be applied only to the objects for which the appropriations were made except as otherwise pro vided by law.” 31 U.S.C. § 1301(a)

. Before the
DAB and District Court , DPW acknowledged that its use of the recovered AFDC overpayments made before September 30, 1996 to supplement its TANF grant was a violation of general appropriation law , but argued that an exception to this general law applied. T he DAB and District Court both rejected this argument because the exception was inapplicable, and DPW failed to identify any other statutory provisio n which supersedes §1301(a) to permit its use of AFDC funds for the TANF program.27 In defense of its retention of AFDC funds for its TANF program, DPW first contends that § 1301(a) “governs how Federal agencies spend money, not what recipients of
Federal f unds do with money after it is paid. ” (DPW Br. at
21

. ) In support of this claim, DPW offers only “the fact that [sic] title of the United States Code subchapter in which this provision is located is entitled ‘The Budget Process

, ’” and

reasons that a cont rary conclusion would “make an appropriations act violation out of every use of Federal funds by an ultimate recipient contrary to the intended purpose.” ( Id. )

DPW’s interpretation of federal appropriations law

— in support of which it cites no substantive authority

— is contrary to the commonly understood principle that public funds “may be used only for the purpose for which they were appropriated.” (HHS Br. at 16, citing Principles of Federal Appropriations Law, 2d ed., U.S. G eneral Accounting Offic e, July 1991, OGC

- 91

- 5, at 4

- 2.) Moreover, as HHS observes,
because DPW “ ‘ d [ id ] not dispute [in District Court ] that its
use of the ’ ” AFDC funds for TANF program costs “ ‘ violated general Federal appropriations law, ’ ” it has waived i ts opportunity to raise a contrary argument now. ( Id. at 17, quoting A

. 21.)

DPW next contends that if federal appropriations law applies, it complied with it by applying AFDC funds to the TANF program, which benefited the same “objects” of the AFDC appr opriation: “needy families with children.” (DPW
Br. at 22

. ) However, as we just explained , DPW waived this argument when it failed to dispute that its use of AFDC funds for the TANF program violated federal appropriations law. In any event

, the merits o f this argument are unavailing

,28 because despite sharing similar purposes, AFDC and TANF are distinct statutes with separate appropriations , and DPW
cite s no statutory provision which purports to authorize the use of AFDC funds to supplement the TANF progra m.

Finally, DPW argues tha t § 1301 “does not apply
where ‘otherwise provided by law,’” and maintains that the repealed AFDC statute “allows States to retain the overpayment collections unless there is a determination that HHS is ‘equitably entitled’ to a refund.” (DPW Br. at 22

. )
We conclude that DPW has also waived this argument, which it did not raise before the agency. See United States v. L.A. Tucker Truck Lines, 344 U.S. 33, 37

- 38 (1952) ; Dir., Office of Workers’ Comp. Progra ms v. N. Am. Coal Corp. , 626 F.2d 1137, 1143

- 44 (3d Cir 1980)

.

5. TANF Spending Cap under 42 U.S.C. § 603(a)(1)

As part of the tradeoff of state flexibility for reduced
f

ederal welfare spending, 42 U.S.C. § 603(a)(1) provides for a
d ollar limit

, or “ cap ,” on the f ederal TANF funds that a state can receive in a fiscal year. Before the DAB and District
Court , DPW argued that it was entitled to retain the AFDC funds recovered before September 1, 2000 because DPW’s
retention of the feder al share of recovered AFDC overpayments did not excee d the TANF cap on federal funds. In this regard, DPW claimed that the annual S tate F amily
As sistan ce G rant (“SFAG” ) does not set the cap o n funds a state may receive under TANF, because states may be el igible
for a bonus , supplemental grant, or contingency funds. The
District Court and DAB properly rejected “this possibility [as] meaningless

, ” reasoning that, while a state’s annual TANF funds may be increased beyond the SFAG by a bonus

,29 supplemental gra nt, or contingency funds , these amounts are determined by “a statutory formula under Title IV, ” and thus the statute still impose s a dollar cap on a s tate’s annual
f

ederal TANF gran t. (A. 25

. ) They concluded that DPW “may not

. . . exceed [] [this cap] by using AFDC overpayment recoverie s to supplement those funds.” ( A. 25

. ) We agree with this interpretation of the TANF dollar cap, and since DPW offers no persuasive argument to defeat this interpretation, we conclude that t he District Court did not err.

IV.

A. Lack of Standing to Pursue a FOIA Claim

Turning to its FOIA claim, DPW argues that the
District Court erred in granting summary judgment against it on the grounds that it lacked standing

. The g ist of DPW’s
claim is t hat FOIA requires agencies to publish “current indexes providing identifying information for the public as to any matter issued, adopted, or promulgated after July 4, 1967, and required by this paragraph to be made available or published.” 5 U.S.C. § 552( a)(2)

. DP W asserts that the DAB fails to satisfy its duties under this requirement because it provides only a listing of decisions and a key word search engine on the agency’s website.

HHS challenged DPW’s standing to raise this issue
before the District Court , and DPW responded with a Rule 56(f) motion and declaration . The declaration asserted that the lack of an index prevented it from effectively representing itself before the DAB, because its counsel could not conclusively determine whether it had fo und all relevant precedent on the search engine. The declaration also claimed that the search engine’s key

- word search function was30 inadequate because the DAB decisions do not use uniform wording. DPW offered an example of a principle that could
not be s earched by word, but could be categorized by topic.

The District Court did not consider the merits of this claim, and instead dismissed it for lack of standing due to its
failure to allege an adequate injury , explaining :

PA DPW has fa iled to cite a single instance in which the alleged inadequacy of the DAB’s

“ index ” of its final decision under FOIA has resulted in its failure to find a prior DAB
decision which would have been advantageous

to PA DPW in an appeal before the DAB. As a result, this case is si mply not the proper case to challenge generally t he sufficiency of the
DAB’s “index” of its final decisions.

(A. 35

- 36.)

To establish standing to sue, a plaintiff has the burden of establishing an “injury in fact ”: a harm that is both concrete and particu larized, either actual or imminent, and not conjectural or hypothetical. Lujan v. Defenders of Wildlife

, 504 U.S. 555, 560

- 61 (1992)

. In Cervase v. Office of th e Fed. Register , 580 F.2d 1166 (3d Cir. 1978) , a lawyer sought to compel the Office of the Federal Register to compile an index
of t he Code of Federa l Regulations. He argued that the Table of Contents to the Code made it “almost impossible for [him]
to know which federa l regulations appl[ied] to [him

. ] ” Id. at 1167

. We held that the lawyer had standing under FOIA because “[t ]he Federal Register Act was intended to confer upon the general public rights of access to agency rulings,” and this was clearly intended to benefit a “practicing attorney,31 who by virtue of his profession must advise others about their legal rights

. ” Id. at 1172. Therefore, we found that the lawyer’s “inability to retrieve information from the Federal Register” was an injury

- in

- fact. Id

.

I n Pa. Dep’t of Pub. Welfare v. United States Dep’t of
Health & Human Services

, No. 99

- 175, 2001 U.S. Dist. LEXIS 3492 ( W.D. Pa . Feb 7, 2001) (hereinafter, “Pennsylvania”)

, then

- D istrict C ourt J udge D. Brooks Smith held that DPW was injured by the DAB’s failure to index certain policy statements . 2001 U.S. Dist. LEXIS 3492, at
*63

- 64. The Court observed that “[w]ithout current or complete indices . . . the [state] is unable to determine precisely what rules and regulations govern its conduct and is without sufficient information to structure its AFDC, EA, and TANF programs in the future.” Id. As a result, the state was injured because it was “deprived of information” that Congress intended it to have

. Id.

However, t he harms that DPW alleges in the case at
bar are not equivalent to the injuries

- in

- fact in these cases. In its Rule 56(f) declaration, DPW described the various ways in which it was injured by the DAB’s allegedly inadequate
index. It explained that “the lack of an index has hampered [DPW counsel’s] effective representation of DPW b efore the
DAB.” (A. 237. ) It elaborated that the key word searchable website was inadequate, because DPW’s counsel

[O]ften want[s] to find DAB cases setting forth the principle that a State’s interpretation of an ambiguous statute, regulation, or state p lan is entitled to prevail over a Federal interpretation if the State has not been given notice of the Federal interpretation. Those cases are difficult32 to locate by key word because the DAB does not use uniform wording in discussing the issue.

(A. 238.) Thus, DPW generally asserts that the lack of an index causes it difficulty, and the specific harm it claims as a result is that its counsel “ can never be certain that [it has] located all important DAB decisions on a topic because sometimes the topic is not susceptible to a key

- word search.” (A. 23 7

- 38. ) DPW insist s that these allegations are “more than an ‘unsupported assertion’ that the lack of an index hampered legal research

. ” (DPW Reply at 7.)

We disagree. T here is a meaningful distinction
betwe en the “ difficulties ” that DPW identifies and the harms that were sufficient to qualify as injuries in Cervase and Pennsylvania

. Although DPW claims the lack of an index “hampered [ DPW counsel’s] effective representation of DPW before the DAB,” it offers only a general description of the challenges of searching, explaining that some “cases are difficult to locate by key word,” and that it “can never be certain” that it has found everything. (A. 237

- 38

. ) Yet, s uch vague and indefinite allegations are inad equate to establish injury

- in

- fact , and D PW does not cure this deficiency by identifying any concrete information or cases that it was unable to find, or any other description of how this inability actually hampered its representation before the DAB.

W hil e the key word search function may be
inconvenient and create some uncertainty in the research

process, there is no indication that DPW suffered any disadvantage due to the lack of an index. In fact, DPW was able to locate all of the DAB precedents releva nt to its proceeding, and although it asserts that it s counsel has “practiced before the DAB for nearly thirty years” and33 “handled dozens of cases in the DAB,” it does not offer a single example of when it was unable to locate relevant
decisions in other c ases. Since t he lack of an index has not made it “almost impossible” for DPW to find relevant DAB precedent, we conclude that the D istrict Court did not err in concluding that DPW lacks standing.

B. Rule 56(f) Decision 3

There remains one final claim that DPW asserts to defend its standing. DPW argues that at the Rule 56( d ) stage, “it was not necessary for [it] to identify a particular case where it was prejudiced by the lack of an index before the
DAB. The declaration only needed to specify what particu lar information was sought and how it would preclude summary judgment.” (DPW Br. at 27.) It argues that the District Court “should have allowed [it] to take depositions or other discovery to obtain evidence to show injury.” (DPW Reply at
8

. ) It also as serts that Rule 56( d ) “ motions are usually

3 DPW styled its June 16, 2010 motion to the District Court as a “Rule 56(f) Motion,” (A. 235

- 39), and the District Court evaluated it under the standards applied to Rule 56(f) motions. (A. 43

- 45.) A s part of a ge neral restyling of the
Federal Rules of Civil Procedure in December 2007

, the language of Rule 56(f) was amended and incorporated into Rule 56(d). See Fed. R. Civ. P. 56(d). These amendments were “intended to be stylistic only,” and Rule 56(d) “carries
f

orward without substantial change the provisions of former subdivision (f).” (Advisory Committee Notes, Fed. R. Civ. P. 56(d)). Therefore, although DPW’s briefs and much of the caselaw refer to the language of Rule 56(f), these changes do
not alter our s ubstantive legal analysis.34 granted as a matter of course.” ( Id.

, citing Doe v. Abington
Friends School , 480 F.3d 252 , 257 (3d Cir. 2006) .)

When a party opposing summary judgment “believes that s/he needs additional time for discovery, [Rule 56( d )] specifies the procedure to be followed

. ” Dowling v. City of
Phila. , 855 F.2d 136, 139 (3d Cir. 1988)

. Specifically, Rule 56( d ) states:

If a nonmovant shows by affidavit or declaration that, for specified reasons, it cannot present facts essential to justify its opposition,
the cou rt may:

— . . . (2) allow time to obtain affidavits or declarations or to take discovery

.

Fed. R. Civ. P. 56( d )

. We ha ve interpreted this provision to require “a party seeking further discovery in response to a summary judgment motion [to] submit an affidavit specifying, for example, what particular information is sought; how, if uncovered, it would preclude summary judgment; and why it has not previously been obtained.” Dowling , 855 F.2d at 139

- 4 0

. DPW , however, submitted no
such affidavit

. Thus, the District Court properly dismissed
the FOIA claim for lack of standing

.

V.

For the foregoing reasons, we will affirm the District Court’s judgment.