Federal Register / Vol. 72, No. 41 / Friday, March 2, 2007 / Proposed Rules 9491 

20. Section 498.88 is amended by 

adding a new paragraph (g) to read as 

follows: 

§ 498.88 Decision or remand by the 

Departmental Appeals Board. 

* * * * * 

(g) When a request for Board review 

is filed after an ALJ has issued a 

decision or dismissal order, the Board 

must issue a decision, dismissal order or 

remand to the ALJ, as appropriate, no 

later than 180 days after the appeal was 

received by the Board. 

(Catalog of Federal Domestic Assistance 

Program No. 93.773, Medicare—Hospital 

Insurance Program; and No. 93.774, 

Medicare—Supplementary Medical 

Insurance Program.) 

Dated: August 30, 2005. 

Mark B. McClellan, 

Administrator, Centers for Medicare and 

Medicaid Services. 

Dated: November 8, 2006. 

Micheal O. Leavitt, 

Secretary. 

[FR Doc. 07–870 Filed 2–23–07; 8:45 am] 

BILLING CODE 4120–01–P 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Administration for Children and 

Families 

45 CFR Part 98 

RIN 0970–AC29 

Child Care and Development Fund 

Error Rate Reporting 

AGENCY: Administration for Children 

and Families (ACF), HHS. 

ACTION: Notice of proposed rulemaking. 

SUMMARY: This proposed rule revises the 

Child Care and Development Fund 

(CCDF) regulations to provide for the 

reporting of error rates in the 

expenditure of CCDF grant funds by the 

fifty States, the District of Columbia and 

Puerto Rico. The error rate reports will 

serve to implement provisions of the 

Improper Payments Information Act of 

2002 (IPIA) and the President’s 

Management Agenda (PMA)’s goal of 

‘‘Eliminating Improper Payments.’’ For 

reasons that will be explained in the 

preamble to the rule, the initial 

information collection under this 

proposed rule will require States, the 

District of Columbia, and Puerto Rico to 

review and report on a random sample 

of cases estimated to achieve the 

calculation of annual improper 

authorizations for payment (rather than 

improper payments made) with a 90 

percent confidence interval of +/-5.0 

percent. 

DATES: Comment Period: You may 

submit comments through May 1, 2007. 

We will not consider comments 

received after this date. 

ADDRESSES: You may mail comments to 

the Administration for Children and 

Families, Child Care Bureau, 1250 

Maryland Ave. SW., 8th Floor, 

Washington, DC 20024. Attention: 

Christine Calpin, Associate Director. 

Commenters also may provide 

comments on the ACF website. To 

transmit comments electronically, or to 

download an electronic version of the 

proposed rule, please go to http:// 

regulations.acf.hhs.gov. We will have 

comments available for public 

inspection Monday through Friday, 8:30 

a.m. to 5 p.m. at the above address. The 

information collection related to this 

regulation can be found at http:// 

www.acf.hhs.gov/programs/ccb/ccdf/ 

ipi/ipi.htm. 

FOR FURTHER INFORMATION CONTACT: Jeff 

Polich, Child Care Program Specialist, 

Child Care Bureau, at (202) 205–8696, or 

by email at jpolich@acf.hhs.gov. 

SUPPLEMENTARY INFORMATION: 

Table of Contents 

I. Background 

A. Child Care and Development Fund 

B. Improper Payments 

C. Statutory and Administrative Directives 

To Measure Improper Payments and 

Calculate Error Rates 

D. Error Rate Methodology Pilots 

E. Operationalizing the Error Rate 

Methodology 

II. Statutory Authority 

III. Provisions of Proposed Rule 

A. Summary of the Existing Regulations 

B. Consultation with States, Territories and 

Other Organizations 

C. Changes Made in This Proposed Rule 

D. Relation to Existing Regulations 

IV. Regulatory Impact Analyses 

A. Executive Order 12866 

B. Regulatory Flexibility Analysis 

C. Assessment of the Impact on Family 

Well-Being 

D. Paperwork Reduction Act 

E. Unfunded Mandates Reform Act of 1995 

F. Congressional Review 

G. Executive Order 13132 

I. Background 

This proposed rule adds a new 

subpart to the Child Care and 

Development Fund (CCDF) regulations 

that would require States, the District of 

Columbia and Puerto Rico to employ a 

case review process in calculating CCDF 

error rates in accordance with an error 

rate methodology established by the 

Secretary of Health and Human Services 

(the Secretary). The proposed rule 

would require States, the District of 

Columbia and Puerto Rico to report 

specified information regarding errors to 

the Department of Health and Human 

Services. The basic components of this 

error rate methodology, and how it was 

developed and pilot tested, are 

described in this proposed rule. The 

specifics of this methodology and how 

it will be implemented are detailed in 

the information collection forms and 

instructions associated with this rule, 

copies of which may be downloaded or 

requested as detailed in the section 

discussing the Paperwork Reduction Act 

below. 

A. Child Care and Development Fund 

(CCDF) 

CCDF provides Federal funds to 

States, Territories, Indian Tribes and 

tribal organizations for the purpose of 

assisting low-income families, including 

families receiving or transitioning from 

the Temporary Assistance for Needy 

Families program (TANF), in the 

purchase of child care services, thereby 

allowing parents to work or attend job 

training or an educational program. 

States and Territories must spend a 

portion of their CCDF allotment on 

expenditures to improve the quality and 

availability of child care. A principle 

goal of CCDF set forth in Section 658A 

of the Child Care and Development 

Block Grant (CCDBG) Act of 1990, as 

amended (42 U.S.C. 9858, et seq.), is to 

‘‘Allow each State maximum flexibility 

in developing child care programs and 

policies that best suit the needs of 

children and parents within such 

State.’’ CCDF is provided only to States, 

Territories and Tribes—there is no 

provision for direct funding to 

individual families or providers. 

Federal law establishes eligibility 

criteria for families receiving CCDF 

assistance; however, States and 

Territories administering CCDF funds 

may impose more restrictive eligibility 

standards. Regulations governing CCDF 

are codified in 45 CFR Parts 98 and 99, 

and the Federal definition of a child’s 

eligibility for child care services is set 

forth in 45 CFR 98.20. This description 

includes eligibility requirements related 

to a child’s age, a child’s special needs 

or protective services status, family 

income and parent’s work, training or 

educational activity. Lead Agencies of 

the CCDF Program—which are the State, 

territorial or tribal entities to which 

CCDF block grants are awarded and that 

are accountable for the use of the funds 

provided—have established policies and 

procedures that vary considerably 

across and even within jurisdictions, 

including, but not limited to, stricter 

income limits, special eligibility or 

priority for families receiving TANF and 


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eligibility that differs for a child with 

special needs. All clients seeking child 

care assistance supported by CCDF 

funds must undergo an eligibility 

determination process when they 

initially apply, and all Lead Agencies 

have defined a process for verifying 

information submitted in the 

application. Eligibility determination 

affects many other aspects of the 

program, including provider payment 

rates, authorized hours of care and a 

family’s co-payment responsibility. 

Section 658E of the CCDBG Act (42 

U.S.C. 9858c) and 45 CFR 98.52 limit 

expenditures by States and Territories 

for the costs of administering the CCDF 

program to no more than five percent of 

the State’s or Territory’s aggregate 

expenditures from a fiscal year’s 

allotment of CCDF funds. Various costs 

that are considered an integral part of 

service delivery are excluded from the 

five percent administrative cap, 

including eligibility determination and 

redetermination and the establishment 

and maintenance of computerized child 

care information systems. 

B. Improper Payments 

An August 2002 General 

Accountability Office (GAO) report, 

‘‘Coordinated Approach Needed to 

Address the Government’s Improper 

Payments Problems,’’ (GAO–02–749) 

found that Federal agencies reported 

over $19 billion in improper payments 

for fiscal year 2001 and estimated that 

the actual amount of improper 

payments is likely billions of dollars 

more. GAO further noted in a June 2004 

report, ‘‘HHS Lacks Adequate 

Information to Assess Risk and Assist 

States in Managing Improper 

Payments,’’ (GAO–04–723) that 

minimizing improper payments in the 

CCDF program is particularly important 

considering that almost $5 billion in 

Federal CCDF funds is appropriated to 

the program annually. In the latter 

report, GAO recommended that HHS 

develop mechanisms to gather 

information on a recurring basis from all 

States on their internal control systems 

for measuring and minimizing improper 

payments. Finally, a November 2006 

report, ‘‘Agencies’ Fiscal Year 2005 

Reporting under the Improper Payments 

Information Act Remains Incomplete,’’

(GAO–07–92) cites CCDF as a 

susceptible program that is not currently 

reporting improper payment estimates. 

The GAO reports may be downloaded 

electronically at http://www.gao.gov/ 

new.items/d02749.pdf, http:// 

www.gao.gov/new.items/d04723.pdf, 

and http://www.gao.gov/new.items/ 

d0792.pdf. 

C. Statutory and Administrative 

Directives To Measure Improper 

Payments and Calculate Error Rates 

Congress responded to the issue of 

improper payments by enacting the 

Improper Payments Information Act of 

2002 (IPIA) (31 U.S.C. 3321 note). The 

IPIA requires Federal agencies to 

identify programs that are vulnerable to 

improper payments and to estimate 

annually the amount of underpayments 

and overpayments made by these 

programs. An improper payment, as 

defined by the IPIA, is any payment that 

should not have been made or that was 

made in an incorrect amount under 

statutory, contractual, administrative or 

other legally applicable requirement. 

Incorrect amounts are overpayments 

and underpayments (including 

inappropriate denials of payment or 

service). An improper payment includes 

any payment that was made to an 

ineligible recipient or for an ineligible 

service. Improper payments also are 

duplicate payments, payments for 

services not received and payments that 

do not account for credit for applicable 

discounts. 

According to the IPIA, Federal 

agencies also must report on the actions 

they are taking to reduce improper 

payments. This report must include a 

discussion of the causes of improper 

payments, what actions Federal 

agencies have taken to correct those 

causes and the results achieved. Federal 

agencies also must state whether they 

have the information systems and other 

infrastructure needed to reduce 

improper payments and, if not, what 

resources they have requested in their 

budget submissions. Finally, Federal 

agencies must report on what steps they 

have taken to hold managers 

accountable for reducing improper 

payments. The IPIA may be downloaded 

at http://thomas.loc.gov/cgi-bin/ 

bdquery/z?d107:HR04878:TOM:/bss/ 

d107query.html. 

The Executive Branch has also 

worked to address the improper 

payments issue. The President’s 

Management Agenda (PMA)’s goal of 

‘‘Eliminating Improper Payments’’

promises to establish a baseline of the 

extent of improper payments and to 

work with agencies to set goals to 

reduce improper payments for each 

program. The anticipated result of this 

effort is greater accuracy in benefit and 

assistance programs, which will enable 

programs to serve additional eligible 

recipients. The PMA may be 

downloaded at http:// 

www.whitehouse.gov/omb/budget/ 

fy2002/mgmt.pdf. 

The modifications proposed in this 

notice of proposed rulemaking (NPRM) 

are designed to meet the requirements of 

IPIA as well as to meet the PMA’s goal 

of ‘‘Eliminating Improper Payments.’’

D. Error Rate Methodology Pilots 

The methodology that will be 

implemented through this rule is based 

on a methodology the Child Care Bureau 

developed and field-tested in 2005 in 

partnership with four States that 

volunteered to participate in a pilot 

study (Arkansas, Colorado, Illinois and 

Ohio). This methodology focused on 

administrative error associated with 

client eligibility. A principal reason for 

focusing on client eligibility is that, 

while the methods used to determine 

initial and ongoing client eligibility are 

not uniform across States, Territories 

and Tribes, all States, Territories and 

Tribes have procedures in place for 

parents to apply for child care services 

and some system to initially determine 

and periodically re-determine 

eligibility. Also, determining client 

eligibility is the first step in the child 

care subsidy process and therefore 

affects the administration of the entire 

program. 

Federal staff and contractors worked 

with pilot State staff to select a 

statistically valid statewide random 

sample of child care subsidy cases from 

the universe of cases in which a child 

care payment had been authorized. 

Electronic or hard copy files for the 

selected cases were then retrieved and 

documentation from the case record was 

reviewed to determine if errors were 

made in determining client eligibility, 

whether any errors that were made 

resulted in an improper authorization 

for payment and the amount of any 

improper authorization. 

Pilot States employed this case review 

process to identify the percentage of 

cases with an error, the percentage of 

cases with an improper authorization 

for payment, the percentage of improper 

authorizations for payment and the 

average amount of improper 

authorization for payment per child. 

This methodology focused on improper 

authorizations for payment rather than 

actual payments because we believe that 

improper authorizations for payment are 

closely related to improper payments. 

Eligibility and authorization are the first 

steps in the child care subsidy process 

and errors made at this stage in the 

process are likely to affect the 

administration of the entire program. 

The Child Care Bureau provided the 

pilot States with a template of items to 

examine as part of each case review; 

pilot States were asked to modify this 

template to reflect specific State policies 


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and practices. Federal staff and 

contractors provided guidance and 

oversight through on-site visits and 

other means regarding the selection of 

the sample, the identification and 

categorization of errors as part of the 

case reviews and the calculation of the 

resulting error rates. 

In summary, the error rate 

methodology used in the pilot included: 

(1) Sample Selection: A sample of cases 

was selected by each State using a 

sampling frame based on the child 

population served by eligibility offices 

for a one month period. (The number of 

cases selected was estimated to achieve 

a precision level of 6 percent at the 90 

percent confidence interval.); (2) Record 

Review Worksheet: A template of a 

record review worksheet, which 

captured the detail for each element of 

eligibility, the benefit calculation as 

documented by the agency, the amount 

of the subsidy authorized for the review 

month and any resulting errors, 

modified by each State so their 

worksheets would conform to the 

specifics of their State plans; (3) Case 

Review: State representatives conducted 

case reviews and collected key pieces of 

information for a defined review month, 

including the county of service, 

administrative errors occurring during 

the review month, cause of improper 

authorization for payment, total amount 

of improper authorizations for payment 

during the review month and total 

amount of authorizations during the 

review month; (4) Error Rate 

Calculation: These data were compiled 

and error rates were computed for each 

State, including percentage of cases 

with an error (case error rate) 

(percentage of cases with an error as 

compared to the total number of cases 

in the sample), percentage of cases with 

an improper authorization for payment 

case rate (percentage of cases with an 

improper authorization for payment as 

compared to the total number of cases 

in the sample), percentage of improper 

authorizations for payment rate 

(percentage of child care payment 

dollars that were improper 

authorizations for payment as compared 

to the total amount of child care 

authorizations for payment dollars for 

the sample), and average amount of 

improper authorization for payment per 

child (total dollar amount of child care 

improper authorizations for payment 

made divided by the number of cases 

that had an improper authorization for 

payment); (5) Federal Oversight and 

Monitoring, and Ongoing Technical 

Assistance: As part of the pilot, Child 

Care Bureau and ACF Regional staff 

provided ongoing oversight, monitoring 

and technical assistance, both on- and 

off-site. For example, the Child Care 

Bureau held a planning conference in 

February 2005 to provide an overview of 

the proposed research design and obtain 

input from participating States and 

conducted site visits of each 

participating State to review the error 

rate calculation process. Again, the pilot 

focused on administrative error in 

determining client eligibility (i.e., the 

extent of errors made by the agency in 

determining eligibility based on 

program rules and information available 

in case records); however, one State 

decided to extend the methodology to 

include provider error and client error. 

The final report on the error rate 

methodology pilots may be downloaded 

electronically at http:// 

www.acf.hhs.gov/programs/ccb/ccdf// 

ipi/phase2/sec1_1.htm. A pilot study of 

additional States (Florida, Kansas, New 

Jersey, Oregon, and West Virginia) was 

conducted in 2006, but results are still 

forthcoming. 

E. Operationalizing the Error Rate 

Methodology 

At the conclusion of the pilot, it was 

determined that a version of the tested 

methodology would be an appropriate 

tool for calculating error rates related to 

client eligibility. The proposed 

methodology described in this proposed 

rule and detailed in the information 

collection forms and instructions is 

substantively the same as the pilot 

described above with the following 

exceptions: (1) The sample size must be 

increased to achieve a 90% confidence 

level +/¥5%; (2) States will do the 

sampling and calculate findings (a 

contractor performed those functions for 

pilot States), (3) Two items (portion of 

improper authorizations for payment 

attributable to insufficient or lack of 

documentation and type of improper 

authorization for payment 

[underauthorization and 

overauthorization]) are added to the 

required Data Entry Form to capture 

information required by revised 

Appendix C of OMB Circular A–123; (4) 

An informal process used with the 

pilots to consider causes of improper 

authorizations for payment and future 

actions to reduce them is formalized 

and requires submission of a State 

Improper Authorizations for Payment 

Report, and (5) States must review cases 

from each month of the year, rather than 

from one particular month as was done 

by the pilot States. The rationale for 

reviewing cases from each month of the 

year is to improve the statistical 

reliability of the case reviews: reviewing 

cases from only one designated month—

as was done in the pilots—would have 

yielded a statistically valid error rate 

only for that particular month rather 

than for the whole year. 

Although the proposed rule is broad 

enough to encompass reporting on all 

types of errors, the initial methodology 

and reporting requirements will focus 

on administrative errors associated with 

client eligibility and improper 

authorizations for payment, as described 

in more detail in the information 

collection forms and instructions 

associated with this rule (please refer to 

the section discussing the Paperwork 

Reduction Act below). 

During the initial information 

collection, States, the District of 

Columbia, and Puerto Rico will evaluate 

both the frequency with which errors 

occurred and the amount of improper 

authorization for payment. ACF will use 

the improper authorization for payment 

error rates and amounts for each State, 

the District of Columbia, and Puerto 

Rico to compute a national improper 

authorizations for payment rate and 

amount that will be annually reported 

in the HHS’s Performance and 

Accountability Report (PAR) beginning 

with the Fiscal Year 2008 PAR. 

We will use a 3-year rotational cycle 

to measure improper authorizations for 

payment in Child Care programs in the 

States, the District of Columbia, and 

Puerto Rico. Out of this group, we will 

select 18 to measure in the first year of 

each cycle and 17 in the remaining 2 

years of each cycle. The result is that 

each State, the District of Columbia, and 

Puerto Rico will be measured once, and 

only once, in every 3 years. This 

rotation allows respondents to plan for 

the reviews because they know in 

advance in which year they will be 

measured. States, the District of 

Columbia, and Puerto Rico will be 

randomly assigned using the following 

methodology. First, each entity will be 

stratified by the 10 ACF regions, with 

the regions randomly ordered. Then 

within region each group will be sorted 

by caseload, from the most cases to the 

least cases. Every third State (including 

the District of Columbia and Puerto 

Rico) on the list will be selected, using 

a random start number between one and 

three the first year. After removing those 

selected for the first year from the frame, 

a second random start is drawn between 

one and two and every other State 

(including the District of Columbia and 

Puerto Rico, if they remain) is selected 

for the second year. The third year will 

include those not selected in year one 

or year two. This sampling approach 

will yield a mix of county-administered 

and State-administered programs and 

programs serving both large and small 

numbers of children each year. A list of 


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States (including the District of 

Columbia and Puerto Rico) assigned to 

each review year can be found in the 

information collection instructions. 

Again, and for the reasons noted 

earlier, we are proposing to require 

States, the District of Columbia, and 

Puerto Rico to measure improper 

authorizations for payment rather than 

improper payments at this time. 

However, we would be interested in 

hearing from States, the District of 

Columbia, and Puerto Rico—as well as 

other interested stakeholders—as to how 

closely-related authorization for 

payment and final payment are linked. 

We would also be interested in hearing 

about how useful information about 

improper authorizations for payment 

will be in reducing improper payments 

and pursuing corrective action, without 

information about final payment. We 

would also like to better understand 

what additional burden and/or benefit 

the States, the District of Columbia, and 

Puerto Rico might reap if, at some future 

date, we were to request the 

measurement of actual improper 

payments as part of the measurement of 

improper authorizations for payment. 

II. Statutory Authority 

This proposed regulation is being 

issued under the authority granted to 

the Secretary by Section 658I of the 

CCDBG Act (42 U.S.C. 9858g) and in 

accordance with the IPIA (31 U.S.C. 

3321 note). 

III. Provisions of Proposed Rule 

A. Summary of the Existing Regulations 

Under CCDF regulations, ACF 

employs several methods to gather the 

information from States, the District of 

Columbia, and Territories needed to 

comply with the statutory requirements 

of the CCDBG Act and to efficiently 

oversee the administration of the CCDF 

program. States and Territories must 

submit plans every two years detailing 

their intentions for implementing 

programs under 45 CFR 98.17. Pursuant 

to 45 CFR 98.70, States and Territories 

also must collect monthly case-level 

reports (which may be submitted 

monthly or quarterly) and submit 

annual aggregated reports on services 

provided through all CCDF grant funds. 

Finally, States and Territories are 

required to submit quarterly reports on 

estimates and expenditures in 

conjunction with 45 CFR 98.65. 

45 CFR 98.65(a) requires Lead 

Agencies to have an audit conducted 

after the close of each program period in 

accordance with OMB Circular A–133 

and the Single Audit Act Amendments 

of 1996 and 45 CFR 98.67(c) requires 

Lead Agencies to have fiscal control and 

accounting procedures sufficient to 

establish that funds have been expended 

appropriately. CCDF regulations do not 

currently require the reporting of error 

rates at regular intervals. 

B. Consultation With States, Territories 

and Other Organizations 

The Child Care Bureau has consulted 

with States, the District of Columbia and 

Territories since 2003 on different 

approaches to addressing improper 

payments. Through quarterly conference 

calls, workshops at annual State 

Administrators Meetings and an 

Improper Payments survey, the Child 

Care Bureau has engaged States and 

Territories in conversations about 

strategies to identify, measure, prevent, 

reduce and collect improper payments. 

The Child Care Bureau also has been in 

contact with national organizations such 

as the American Public Human Services 

Association, the National Association 

for Program Information and 

Performance Measurement and the 

United Council on Welfare Fraud 

through conferences, meetings and 

conference calls regarding strategies to 

address improper payments. 

C. Changes Made in This Proposed Rule 

While retaining the provisions 

governing CCDF Lead Agency audits, 

financial reporting requirements and 

fiscal requirements (located in 45 CFR 

98.65 and 45 CFR 98.67), this NPRM 

proposes to add a new Subpart K—Error 

Rate Reporting to require CCDF Lead 

Agencies of the fifty States, the District 

of Columbia and Puerto Rico to 

measure, calculate and report to the 

Department of Health and Human 

Services error rates in accordance with 

an error rate methodology established 

by the Secretary, as summarized in this 

rule and detailed in the associated 

information collection forms and 

instructions. 

We anticipate publishing a final rule 

with an effective date of October 1, 

2007. This means that the first round of 

States (including the District of 

Columbia and/or Puerto Rico if 

applicable) subject to the final 

regulations would need to complete 

their reviews and submit their data to 

ACF by June 30, 2008. 

Error Rate Report (Section 98.100) 

Under proposed section 98.100(a), 

these requirements would apply only to 

the fifty States, the District of Columbia 

and Puerto Rico. American Samoa, the 

U.S. Virgin Islands, the Commonwealth 

of the Northern Mariana Islands, Guam 

and the Tribes would be exempted from 

the requirements of the proposed rule 

because they serve smaller numbers of 

families. We do not believe that the 

benefits of the error rate data obtained 

from these exempted Territories and the 

Tribes justify the costs of compliance 

with the proposed regulation, which 

would require a much greater portion of 

child care resources relative to the 

States, the District of Columbia and 

Puerto Rico. However, we would 

encourage exempted Territories and 

Tribes to comply voluntarily with the 

requirements of the proposed rule or to 

create their own methods and strategies 

for identifying and reducing improper 

payments. Additionally, should funding 

and provision of services change in 

these exempted Tribes and Territories, 

we will consider removing the 

exemption through the notice and 

comment rulemaking process. 

As stated earlier, the terms ‘‘error’’

and ‘‘improper payment’’ have been 

defined broadly enough in this rule to 

encompass reporting on all types of 

errors and all types of improper 

payments. For example, paragraph (c) 

proposes a definition of ‘‘error’’; and 

paragraph (d) proposes a definition of 

‘‘improper payment.’’ The important 

distinction between the two terms is 

that every improper payment is the 

result of an error; however, not every 

error result in an improper payment. 

Error is defined as any violation or 

misapplication of statutory, contractual, 

administrative, or other legally 

applicable requirements governing the 

administration of CCDF grant funds, 

regardless of whether such violations 

results in an improper payment. An 

improper payment is defined to mean 

any payment of CCDF grant funds that 

should not have been made or that was 

made in an incorrect amount (including 

overpayments and underpayments) 

under statutory, contractual, 

administrative or other legally 

applicable requirements governing the 

administration of CCDF grant funds, 

including any payment of CCDF grant 

funds to an ineligible recipient, any 

payment of CCDF grant funds for an 

ineligible service, any duplicate 

payment of CCDF grants funds and 

payments of CCDF grant funds for 

services not received. 

Though we may consider expanding 

the measurement of error and improper 

payments in the future to include the 

full range of errors and improper 

payments, we are proposing to 

implement this rule for the time being 

by focusing on the measurement of error 

in eligibility determinations and 

improper authorizations for payment. 

For example, under proposed paragraph 

(b), States, the District of Columbia and 

Puerto Rico would prepare a report 


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calculating the ‘‘error rates,’’ defined as 

the percentage of cases with an error 

(expressed as the total number of cases 

with an error compared to the total 

number of cases). At this time—and 

consistent with our initial focus on 

client eligibility errors—we will be 

operationalizing this requirement by 

asking States, the District of Columbia, 

and Puerto Rico to measure only 

administrative errors. 

Similarly, for the time being, we are 

asking States, the District of Columbia, 

and Puerto Rico to review and measure 

the improper authorizations for 

payments to subsidy recipients rather 

than improper payments made. Thus, 

under proposed paragraph (b), States, 

the District of Columbia, and Puerto 

Rico would also prepare a report 

calculating the percentage of cases with 

an error, the percentage of cases with an 

improper authorization for payment 

(expressed as the total number of cases 

with an improper authorization for 

payment compared to the total number 

of cases); the percentage of improper 

authorizations for payment (expressed 

as the total amount of improper 

authorizations for payment compared to 

the total dollar amount of authorizations 

made); the average amount of improper 

authorization for payment; and the 

estimated annual amount of improper 

authorizations for payment. The report 

would provide strategies for reducing 

the error rates and will allow States, the 

District of Columbia and Puerto Rico to 

set target error rates for the next cycle. 

The rationale for capturing the 

information is as follows: (1) Percentage 

of cases with an error within a sample 

of cases for a reporting period is the 

basic measure of error rate for a child 

care agency. The overall goal of an 

agency should be to get this rate as close 

to zero as possible. (2) Percentage of 

cases with an improper authorization 

for payment typically should be a lower 

rate than the percentage of cases with an 

error because not all errors result in an 

improper authorization for payment 

being made. (3) Percentage of improper 

authorizations for payment based on the 

total amount (in dollars) of child care 

improper authorizations for payment in 

the sample divided by the total amount 

of child care authorizations (in dollars) 

for the sample. This provides a measure 

of the magnitude (from a financial 

standpoint) of the improper 

authorizations for payment compared 

with the authorizations for payment 

properly made during the reporting 

period. (4) Average amount of improper 

authorization for payment gives an 

estimate of the size (i.e., the average 

amount in dollars) of the errors for the 

reporting period. This can be helpful in 

determining courses of action for 

recovery and also gives an agency a 

basis for estimating the potential benefit 

of preventive actions to improve the 

eligibility determination process (e.g., 

management interventions to reduce 

error rates). (5) Estimated annual 

amount of improper authorizations for 

payment gives an estimate of the total 

amount of improper authorizations for 

payment for the reporting period. The 

percentage of cases with an improper 

authorization for payment and the 

estimated annual amount of improper 

authorizations for payment are 

necessary to comply with the 

requirements of the IPIA and to provide 

a baseline from which future 

accomplishments in reducing improper 

authorizations for payment can be 

measured. We believe the other 

information will be useful for the States, 

the District of Columbia, and Puerto 

Rico to reduce errors and any improper 

payments resulting from errors. 

Additionally, we believe this 

information will be valuable to ACF in 

monitoring progress in addressing 

improper authorizations for payments, 

reducing improper payments, and 

providing technical assistance, as well 

as focusing entities on potential 

problems in the administration of their 

child care programs. 

Case Review Methodology (Section 

98.101) 

Under proposed section 98.101, Case 

Review Methodology, the error reports 

that would be required by this proposed 

rule must be based on comprehensive 

reviews of case records conducted by 

States, the District of Columbia and 

Puerto Rico in accordance with a 

methodology established by the 

Secretary and detailed in this proposed 

rule and associated information 

collection forms and instructions. In 

determining which case records to 

review, States, the District of Columbia, 

and Puerto Rico must select a random 

sample of child records estimated to 

achieve the calculation of an estimated 

annual amount of improper payments 

with a 90 percent confidence interval of 

±5.0 percent. At this time—and for 

reasons stated earlier—we are 

operationalizing this requirement, 

through the information collection 

instruments and instructions, by asking 

States, the District of Columbia, and 

Puerto Rico to select a random sample 

of child records estimated to achieve the 

calculation of an estimated annual 

amount of improper authorizations for 

payments with a 90 percent confidence 

interval of ±5.0 percent. 

Pursuant to the proposed paragraph 

(b), the Secretary would provide forms 

for use in complying with the proposed 

rule, together with instructions on an 

acceptable methodology. These forms 

and instructions may be requested or 

downloaded as detailed in the section 

discussing the Paperwork Reduction Act 

below. States, the District of Columbia, 

and Puerto Rico would be required 

under proposed paragraph (c) to 

conduct case reviews and submit error 

rate reports every three years on a 

staggered basis according to a cycle 

established by the Secretary and shared 

in instructions accompanying 

information collection forms. The 

proposed rule at paragraph (d) would 

require States, the District of Columbia 

and Puerto Rico to provide access to 

Federal staff to participate and provide 

oversight in the case review and error 

rate calculation process. Federal staff 

may make site visits, as was done 

during the error rate methodology 

pilots, to provide technical assistance 

and review compliance with the 

regulatory requirements. Pursuant to 

paragraph (e) of the proposed rule, 

States, the District of Columbia, and 

Puerto Rico would be required to retain 

records pertinent to the case reviews 

and submission of error rate reports for 

a period of five years from the date of 

submission of the applicable error rate 

report or, if the error rate report was 

revised, from the date of submission of 

the revision. We selected a period of 

five years so that records would be 

available for review through two cycles 

of case reviews and report submissions. 

Content of Error Rate Reports (Section 

98.102) 

This proposed rule adds a new 

section 98.102, Content of Error Rate 

Reports addressing submission of 

baseline reports and standard reports. 

Under proposed paragraph (a), in the 

initial cycle, States, the District of 

Columbia and Puerto Rico would 

submit a baseline report listing baseline 

error rate information and targets for the 

next cycle, as well as information about 

causes of, and strategies to address, 

error and information about their 

information technology systems. Under 

proposed paragraph (b), in subsequent 

cycles, States, the District of Columbia 

and Puerto Rico would submit a 

standard report that would, in addition 

to updating the information provided in 

the baseline report, enable States, the 

District of Columbia and Puerto Rico to 

examine their ability to meet previously 

submitted targets, set future targets, and 

describe strategies to reduce their error 

rates. This report would be used by the 

Department to comply with the 

reporting requirements of the IPIA, to 

advance the goals of the PMA and to 


jlentini on PROD1PC65 with PROPOSAL
9496 Federal Register / Vol. 72, No. 41 / Friday, March 2, 2007 / Proposed Rules 

address concerns raised by GAO and 

others regarding the problem of 

improper payments. 

We intend that the initial case reviews 

and reports would focus on 

administrative error associated with 

client eligibility and authorizations for 

payment for the reasons previously set 

forth; however the regulatory language 

provides flexibility to allow for 

changing or expanding the error rate 

study and report if future circumstances 

warrant doing so. Therefore, should we 

decide to broaden the examination of 

‘‘errors,’’ we would provide notice and 

comment through the information 

collection process. However, we 

welcome comments regarding the use of 

improper authorizations for payment as 

a means to estimate improper payments 

as well as comments regarding the 

additional burden and/or benefit that 

measuring improper payments would 

entail. 

We are proposing that the frequency 

of reporting would be every three years 

to conserve resources and to allow time 

for the results of responses to error rates 

undertaken by States, the District of 

Columbia and Puerto Rico to take effect. 

However, entities are encouraged to 

measure the impact of their corrective 

actions more frequently. In addition, the 

proposed rule would allow for sampling 

of cases as part of the review of case 

records, using methodology established 

by the Secretary and set forth in 

instructions accompanying information 

collection forms. 

D. Relation to Existing Regulations 

Administrative Costs Cap—45 CFR 

98.52 prohibits Lead Agencies from 

spending more than five percent of the 

aggregate CCDF funds expended by the 

Lead Agency from each fiscal year’s 

allotment for administrative activities. 

Section 658E(c)(3)(C) of the CCDBG Act 

(42 U.S.C. 9858c(c)(3)(C)) and the 

accompanying Conference Report (H.R. 

Conf. Rep. 104–725) specify that the 

costs of providing direct services are to 

be excluded from any definition of 

administrative costs. The Conference 

Report specifically identified eligibility 

determination and redetermination, 

reviews and supervision of child care 

placements and establishment and 

maintenance of computerized child care 

information systems as ‘‘integral part[s] 

of service delivery’’ that ‘‘should not be 

considered administrative costs.’’

Therefore, provided the focus of the 

error rate calculations and reports 

continue to focus on client eligibility, 

the costs to Lead Agencies of 

conducting case reviews and preparing 

error rate reports shall be considered a 

part of service delivery and excluded 

from administrative costs subject to the 

five percent administrative cap. Further, 

any costs incurred by a Lead Agency in 

complying with this proposed 

regulation that are directed toward 

establishing or improving child care 

information systems shall also be 

excluded from administrative costs 

subject to the five percent 

administrative cap. 

Identified Improper Payments—

Pursuant to 45 CFR 98.66, any actual 

improper payments related to specific 

cases that were included in the sample 

during the case review process would be 

subject to disallowance in accordance 

with the procedures set forth in 45 CFR 

98.66. Extrapolations of estimated 

improper payments derived from 

random sampling of total cases are not 

subject to disallowance. In the event 

that improper payments identified 

through the case review process are 

recovered, 45 CFR 98.60(g) provides that 

such payments shall (1) if received by 

the Lead Agency during the applicable 

obligation period (described in 45 CFR 

98.60(d) & (e)), be used for activities 

specified in the Lead Agency’s approved 

plan and must be obligated by the end 

of the obligation period; or (2) if 

received after the end of the applicable 

obligation period, be returned to the 

Federal government. 

No Private Right of Action—Section 

658F(a) of the CCDBG Act (42 U.S.C. 

9858d(a)) makes clear that CCDF 

funding is not an entitlement to any 

child care provider or recipient of child 

care services. As a result, detection of an 

underpayment in any specific case does 

not create an entitlement to that 

individual to a particular service or 

benefit. Nothing in this proposed rule 

should be construed to create a right 

requiring the States, the District of 

Columbia or Puerto Rico to remedy any 

individual, even if a payment error in 

the form of an underpayment has been 

made. 

IV. Regulatory Impact Analyses 

A. Executive Order 12866 

Executive Order 12866 requires that 

regulations be drafted to ensure that 

they are consistent with the priorities 

and principles set forth in Executive 

Order 12866. The Department has 

determined that this proposed rule is 

consistent with these priorities and 

principles. 

Executive Order 12866 encourages 

agencies, as appropriate, to provide the 

public with meaningful participation in 

the regulatory process. As described 

earlier, the Child Care Bureau has 

consulted with States, the District of 

Columbia, and Territories on numerous 

occasions since 2003 concerning 

different approaches to addressing 

improper payments. Specifically, 

through quarterly conference calls, 

workshops at annual State 

Administrators Meetings and an 

Improper Payments survey, the Child 

Care Bureau has engaged States and 

Territories in conversations about 

strategies to identify, measure, prevent, 

reduce and collect improper payments. 

The Child Care Bureau also has been in 

contact with national organizations such 

as the American Public Human Services 

Association, the National Association 

for Program Information and 

Performance Measurement and the 

United Council on Welfare Fraud 

through conferences, meetings and 

conference calls regarding strategies to 

address improper payments. In 

addition, we are providing a 60 day 

public comment period. 

This rule is considered a ‘‘significant 

regulatory action’’ as defined under 

Executive Order 12866 and therefore 

has been reviewed by the Office of 

Management and Budget. Specifically, 

the rule raises ‘‘novel legal or policy 

issues arising out of legal mandates, the 

President’s priorities, or the principles 

set forth in the Executive Order.’’

B. Regulatory Flexibility Analysis 

The Regulatory Flexibility Act (RFA) 

(5 U.S.C. Ch. 6) requires the Federal 

government to anticipate and reduce the 

impact of rules and paperwork 

requirements on small businesses and 

other small entities. Small entities are 

defined in the RFA to include small 

businesses, small non-profit 

organizations and small governmental 

entities. This rule will affect only the 50 

States, the District of Columbia and 

Puerto Rico. Therefore, the Secretary 

certifies that this rule will not have a 

significant impact on small entities. 

C. Assessment of the Impact on Family 

Well-Being 

We certify that we have made an 

assessment of this proposed rule’s 

impact on the well-being of families, as 

required under Section 654 of the 

Treasury and General Appropriations 

Act of 1999. This proposed rule aims to 

identify and reduce errors in the 

administration of CCDF funds, thus 

ensuring that the program is operated as 

efficiently and fairly as possible. 

Because CCDF block grant allotments 

are capped (i.e., CCDF is not an 

entitlement), fewer improper payments 

translates into more funds for use in 

assisting low-income families in 

purchasing child care services, 

providing comprehensive consumer 

education to parents and the public and 


jlentini on PROD1PC65 with PROPOSAL
Federal Register / Vol. 72, No. 41 / Friday, March 2, 2007 / Proposed Rules 9497 

improving the quality and availility of 

child care. 

D. Paperwork Reduction Act 

The proposed rule would require 

States, the District of Columbia and 

Puerto Rico to compile information 

regarding errors made in the 

administration of CCDF funds using an 

error rate methodology established by 

the Secretary and detailed in this 

proposed rule and proposed information 

collection forms and instructions. 

Towards this end, this rule would 

require States, the District of Columbia 

and Puerto Rico to submit reports to the 

Department on their findings. Copies of 

the proposed information collection 

forms and instructions may be obtained 

by writing to the Administration for 

Children and Families, Office of 

Administration, Office of Information 

Services, 370 L’Enfant Promenade, SW., 

Washington, DC 20447, Attn: ACF 

Reports Clearance Officer. All requests 

should be identified by the title of the 

information collection. E-mail address: 

rsargis@acf.hhs.gov. Copies of the 

proposed information collection forms 

and instructions may also be obtained 

on the Child Care Bureau’s webpage on 

Addressing Improper Payments at: 

http://www.acf.hhs.gov/programs/ccb/ 

ccdf/ipi/ipi.htm. 

In accordance with the Paperwork 

Reduction Act of 1995, this notice 

invites the general public and other 

public agencies to comment on the 

information collection requirements 

contained in this proposed rule. The 

Administration for Children and 

Families (ACF) will consider comments 

by the public on this proposed 

collection of information in the 

following areas: 

(1) Evaluating whether the proposed 

collection is necessary for the proper 

performance of the functions of ACF, 

including whether the information will 

have practical utility. For example, will 

the measurement of improper 

authorizations for payment provide a 

useful and meaningful component 

estimate of improper payments?; 

(2) Evaluating the accuracy of ACF’s 

estimate of the burden of the proposed 

collection of information, including the 

validity of the methodology and 

assumptions used; 

(3) Enhancing the quality, usefulness 

and clarity of the information to be 

collected; and 

(4) Minimizing the burden of the 

collection of information on those who 

are to respond, including through the 

use of appropriate automated, 

electronic, mechanical, or other 

technology, e.g., permitting electronic 

submission of responses. 

As required by the Paperwork 

Reduction Act of 1995 (44 U.S.C. 

3507(d)), the Administration for 

Children and Families has submitted a 

copy of this section, together with a 

copy of this notice of proposed 

rulemaking to the Office of Management 

and Budget (OMB) for its review. 

OMB is required to make a decision 

concerning the collection of information 

contained in these proposed regulations 

between 30 and 60 days after 

publication of this document in the 

Federal Register. Therefore, a comment 

is best assured of having its full effect 

if OMB receives it within 30 days of 

publication. This does not affect the 

deadline for the public to comment to 

the Department on the proposed 

regulations. These information 

collection requirements will not become 

effective until approved by OMB. 

To make sure that your comments and 

related material reach OMB, please 

submit them by one of the following 

means: 

1. By fax to OMB at (202) 395–6974. 

To ensure your comments are received 

in time, mark the fax to the attention of 

the Desk Officer for the Administration 

for Children and Families. 

2. By e-mail to 

OIRA_submission@omb.eop.gov. To 

ensure your comments are received in 

time, mark the e-mail to the attention of 

the Desk Officer for the Administration 

for Children and Families. 

Title: Child Care and Development 

Fund: Error Rate Report for States, the 

District of Columbia and Puerto Rico. 

Description: States, the District of 

Columbia and Puerto Rico must prepare 

and submit to the Department reports of 

errors occurring in the administration of 

CCDF grant funds. They would be 

required to report the percentage of 

cases with an error, the percentage of 

cases with an improper authorization 

for payment; the percentage of improper 

authorizations for payment; the average 

improper authorization for payment 

amount; and the estimated annual 

amount of improper authorizations for 

payment. The report also will provide 

strategies for reducing the error rates 

and allow States, the District of 

Columbia and Puerto Rico to set target 

error rates for the next cycle. 

Respondents: The fifty States, the 

District of Columbia and Puerto Rico. 

ANNUAL BURDEN ESTIMATES

Instrument or requirement Number of 

respondents* 

Yearly 

submittals 

Average 

burden hours 

per submittal 

Total burden 

hours 

Record Review Worksheet .............................................................................. 17.33 **271 13.74 64,562 

Data Entry Form .............................................................................................. 17.33 **271 .14 652 

State Improper Payments Report .................................................................... 17.33 1 367 6,360 

Estimated Total Annual Burden Hours ..................................................... ........................ ........................ ........................ 71,574 

* States, the District of Columbia and Puerto Rico will compile and submit error rate reports in staggered three-year cycles. 

** These burden estimates are based on a review of 271 cases, which is estimated to be the amount needed to meet the sampling requirements of the proposed rule. 

E. Unfunded Mandates Reform Act of 

1995 

Section 202 of the Unfunded 

Mandates Reform Act of 1995 (UMRA) 

requires that a covered agency prepare 

a budgetary impact statement before 

promulgating a rule that includes any 

Federal mandate that may result in the 

expenditure by State, local and tribal 

governments, in the aggregate, or by the 

private sector, of $100 million or more 

in any one year. 

ACF has estimated the cost impact of 

conducting an error rate case review and 

preparing the required reports in 

compliance with the proposed rule. The 

cost estimate analysis was based on the 

error rate pilots and an estimation of the 

amount of time and cost required to 

complete various tasks. The estimated 

cost for a single respondent to conduct 

its case reviews and prepare the 

required report is approximately 

$150,000. The total estimated cost 

includes the cost from drawing of the 

sample of cases from 12 monthly 

sampling frames, training staff, 


jlentini on PROD1PC65 with PROPOSAL
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conducting record reviews, compiling 

data, calculating error rates and 

preparing the final report. The total 

annual cost burden of having 17 

respondents, the average number 

required in any year, to conduct error 

rate case reviews and prepare the 

required reports would be 

approximately $2.6 million. Thus, this 

proposed rule will not result in the 

expenditure by State, territorial, local 

and tribal governments, in the aggregate, 

or by the private sector, of $100 million 

or more in any one year. 

F. Congressional Review 

This proposed rule is not a major rule 

as defined in 5 U.S.C. 804. 

G. Executive Order 13132 

Executive Order 13132 on Federalism 

requires that Federal agencies consult 

with State and local government 

officials in the development of 

regulatory policies with federalism 

implications. As noted above, the Child 

Care Bureau has engaged States and 

Territories in conversations about 

strategies to identify, measure, prevent, 

reduce and collect improper payments 

through quarterly conference calls, 

workshops at annual State 

Administrators Meetings and an 

Improper Payments survey. Further, 

consistent with Executive Order 13132, 

we specifically solicit comment from 

State and local government officials on 

this proposed rule. We will seriously 

consider these comments in developing 

the final rule. 

List of Subjects in 45 CFR Part 98 

Administrative practice and 

procedure, Day care, Grant programs, 

Reporting and recordkeeping 

requirements. 

(Catalogue of Federal Domestic Assistance 

Programs: 93.575, Child Care and 

Development Block Grant; 93.596, Child Care 

Mandatory and Matching Funds) 

Dated: April 10, 2006. 

Wade F. Horn, 

Assistant Secretary for Children and Families. 

Approved: February 5, 2007. 

Michael O. Leavitt, 

Secretary, Department of Health and Human 

Services. 

For the reasons set forth in the 

preamble, the Administration for 

Children and Families proposes to 

amend part 98 of title 45 of the Code of 

Federal Regulations as follows: 

PART 98–CHILD CARE AND 

DEVELOPMENT FUND 

1. The authority for part 98 continues 

to read: 

Authority: 42 U.S.C. 618, 9858. 

2. Amend 45 CFR Part 98 to add 

Subpart K to read as follows: 

Subpart K—Error Rate Reporting 

Sec. 

98.100 Error Rate Report. 

98.101 Case Review Methodology. 

98.102 Content of Error Rate Reports. 

§ 98.100 Error Rate Report. 

(a) Applicability—The requirements 

of this subpart apply to the fifty States, 

the District of Columbia and Puerto 

Rico. 

(b) Generally—States, the District of 

Columbia and Puerto Rico shall 

calculate, prepare and submit to the 

Department, a report of errors occurring 

in the administration of CCDF grant 

funds, at times and in a manner 

specified by the Secretary in 

instructions. States, the District of 

Columbia and Puerto Rico must use this 

report to calculate their error rates, 

which is defined as the percentage of 

cases with an error (expressed as the 

total number of cases with an error 

compared to the total number of cases); 

the percentage of cases with an 

improper payment (expressed as the 

total number of cases with an improper 

payment compared to the total number 

of cases); the percentage of improper 

payments (expressed as the total amount 

of improper payments in the sample 

compared to the total dollar amount of 

payments made in the sample); the 

average amount of improper payment; 

and the estimated annual amount of 

improper payments. The report also will 

provide strategies for reducing their 

error rates and allow States, the District 

of Columbia and Puerto Rico to set 

target error rates for the next cycle. 

(c) Error Defined—For purposes of 

this subpart, an ‘‘error’’ shall mean any 

violation or misapplication of statutory, 

contractual, administrative, or other 

legally applicable requirements 

governing the administration of CCDF 

grant funds, regardless of whether such 

violation results in an improper 

payment. 

(d) Improper Payment Defined—For 

purposes of this subpart, ‘‘improper 

payment’’ (1) means any payment of 

CCDF grant funds that should not have 

been made or that was made in an 

incorrect amount (including 

overpayments and underpayments) 

under statutory, contractual, 

administrative, or other legally 

applicable requirements governing the 

administration of CCDF grant funds; and 

(2) Includes any payment of CCDF 

grant funds to an ineligible recipient, 

any payment of CCDF grant funds for an 

ineligible service, any duplicate 

payment of CCDF grant funds and 

payments of CCDF grant funds for 

services not received. 

(e) Costs of Preparing the Error Rate 

Report—Provided the error rate 

calculations and reports focus on client 

eligibility, expenses incurred by the 

States, the District of Columbia and 

Puerto Rico in complying with this rule, 

including preparation of required 

reports, shall be considered a cost of 

direct service related to eligibility 

determination and therefore is not 

subject to the five percent limitation on 

CCDF administrative costs pursuant to 

§ 98.52(a). 

§ 98.101 Case Review Methodology. 

(a) Case Reviews and Sampling—In 

preparing the error reports required by 

this subpart, States, the District of 

Columbia and Puerto Rico shall conduct 

comprehensive reviews of case records 

using a methodology established by the 

Secretary. For purposes of the case 

reviews, States, the District of Columbia 

and Puerto Rico shall select a random 

sample of child records which is 

estimated to achieve the calculation of 

an estimated annual amount of 

improper payments with a 90 percent 

confidence interval of ±5.0 percent. 

(b) Methodology and Forms—States, 

the District of Columbia and Puerto Rico 

must prepare and submit forms issued 

by the Secretary, following the 

accompanying instructions setting forth 

the methodology to be used in 

conducting case reviews and calculating 

the error rates. 

(c) Reporting Frequency and Cycle—

States, the District of Columbia and 

Puerto Rico shall conduct case reviews 

and submit error rate reports to the 

Department according to a staggered 

three-year cycle established by the 

Secretary such that each State, the 

District of Columbia, and Puerto Rico 

will be selected once, and only once, in 

every three years. 

(d) Access to Federal Staff—States, 

the District of Columbia and Puerto Rico 

must provide access to Federal staff to 

participate and provide oversight in 

case reviews and error rate calculations, 

including access to forms related to 

determining error rates. 

(e) Record Retention—Records 

pertinent to the case reviews and 

submission of error rate report shall be 

retained for a period of five years from 

the date of submission of the applicable 

error rate report or, if the error rate 

report was revised, from the date of 

submission of the revision. Records 

must be made available to Federal staff 

upon request. 


jlentini on PROD1PC65 with PROPOSAL
Federal Register / Vol. 72, No. 41 / Friday, March 2, 2007 / Proposed Rules 9499 

§ 98.102 Content of Error Rate Reports. 

(a) Baseline Submission Report—At a 

minimum, States, the District of 

Columbia and Puerto Rico shall submit 

an initial error rate report to the 

Department, as required in § 98.100, 

which includes the following 

information on errors and resulting 

improper payments occurring in the 

administration of CCDF grant funds, 

including Federal Discretionary Funds 

(which includes any funds transferred 

from the TANF Block Grant), Mandatory 

and Matching Funds and State Matching 

and Maintenance-of-Effort (MOE 

Funds): 

(1) Percentage of cases with an error 

(regardless of whether such error 

resulted in an over or under payment), 

expressed as the total number of cases 

in the sample with an error compared to 

the total number of cases in the sample; 

(2) Percentage of cases with an 

improper payment (both over and under 

payments), expressed as the total 

number of cases in the sample with an 

improper payment compared to the total 

number of cases in the sample; 

(3) Percentage of improper payments 

(both over and under payments), 

expressed as the total dollar amount of 

improper payments in the sample 

compared to the total dollar amount of 

payments made in the sample; 

(4) Average amount of improper 

payments (gross over and under 

payments, divided by the total number 

of cases in the sample that had an 

improper payment (both over and under 

payments)); 

(5) Estimated annual amount of 

improper payments (which is a 

projection of the results from the sample 

to the universe of cases statewide during 

the 12-month review period) calculated 

by multiplying the percentage of 

improper payments by the total dollar 

amount of child care payments that the 

State, the District of Columbia or Puerto 

Rico paid during the 12-month review 

period; 

(6) For each category of data listed 

above, targets for errors and improper 

payments in the next reporting cycle 

(which must be lower than the most 

recent estimated error rates); 

(7) Summary of methodology used to 

arrive at estimate, including fieldwork 

preparation, sample generation, record 

review and error rate computation 

processes; 

(8) Discussion of the causes of 

improper payments identified and 

actions that will be taken to correct 

those causes in order to reduce the error 

rates; 

(9) Description of the information 

systems and other infrastructure that 

assist the State, the District of Columbia 

and Puerto Rico in identifying and 

reducing improper payments, or if the 

State, the District of Columbia or Puerto 

Rico does not have these tools, a 

description of actions that will be taken 

to acquire the necessary information 

systems and other infrastructure; and 

(10) Such other information as 

specified by the Secretary. 

(b) Standard Report—At a minimum, 

the State, the District of Columbia and 

Puerto Rico shall submit an error rate 

report to the Department, as required in 

§ 98.100, made subsequent to the 

baseline submission report as set forth 

in § 98.102(a) which includes the 

following information on errors and 

resulting improper payments occurring 

in the administration of CCDF grant 

funds, including Federal Discretionary 

Funds (which includes any funds 

transferred from the TANF Block Grant), 

Mandatory and Matching Funds and 

State Matching and Maintenance-ofEffort (MOE Funds): 

(1) All the information reported in the 

baseline submission, as set forth in 

§ 98.102(a), updated for the current 

cycle; 

(2) For each category of data listed in 

§ 98.102(a)(1) through (5), States, the 

District of Columbia and Puerto Rico 

must include data and targets from the 

prior cycle in addition to data from the 

current cycle and targets for the next 

cycle; 

(3) Description of whether the State, 

the District of Columbia or Puerto Rico 

met error rate targets set in the prior 

cycle and, if not, an explanation of why 

not; 

(4) Discussion of the causes of 

improper payments identified in the 

prior cycle and actions that were taken 

to correct those causes, in addition to a 

discussion on the causes of improper 

payments identified in the current cycle 

and actions that will be taken to correct 

those causes in order to reduce the error 

rates; and 

(5) Such other information as 

specified by the Secretary. 

[FR Doc. E7–3664 Filed 3–1–07; 8:45 am] 

BILLING CODE 4184–01–P 

DEPARTMENT OF COMMERCE 

National Oceanic and Atmospheric 

Administration 

50 CFR Part 622 

[I.D. 021507B] 

South Atlantic Fishery Management 

Council; Public Hearings 

AGENCY: National Marine Fisheries 

Service (NMFS), National Oceanic and 

Atmospheric Administration, 

Commerce. 

ACTION: Notice of additional public 

hearing. 

SUMMARY: The South Atlantic Fishery 

Management Council (Council) will 

hold an additional public hearing in a 

series of public hearings regarding 

Amendment 18 to the Fishery 

Management Plan for Coastal Migratory 

Pelagic Resources of the Gulf of Mexico 

and South Atlantic. Amendment 18 will 

modify the total allowable catch (TAC) 

for the Atlantic migratory group king 

mackerel and Spanish mackerel 

fisheries, and change the commercial 

trip limits for Spanish mackerel to 

reflect recent changes in the fishing 

year. 

DATES: The additional public hearing 

will be held March 18, 2007. Written 

comments regarding Amendment 18 

must be received in the Council office 

by close of business on April 10, 2007. 

See SUPPLEMENTARY INFORMATION for the 

date, time, and location of the public 

hearing. 

ADDRESSES: Written comments should 

be sent to Bob Mahood, Executive 

Director, South Atlantic Fishery 

Management Council, 4055 Faber Place 

Drive, Suite 201, North Charleston, SC 

29405, or via email to 

MackerelAmendment18@safmc.net. 

Copies of the public hearing document 

are available from Kim Iverson, South 

Atlantic Fishery Management Council, 

4055 Faber Place Drive, Suite 201, North 

Charleston, SC 29405; telephone: 843–

571–4366 or toll free at 866/SAFMC–10. 

FOR FURTHER INFORMATION CONTACT: Kim 

Iverson, South Atlantic Fishery 

Management Council, 4055 Faber Place 

Drive, Suite 201, North Charleston, SC 

29405; telephone: 843–571–4366; fax: 

843–769–4520; email address: 

kim.iverson@safmc.net. 

SUPPLEMENTARY INFORMATION: The 

Council initiated a regulatory 

amendment in June 2006 to adjust the 

TAC following an assessment and report 

reflecting the need to reduce the current 

TACs for both Atlantic migratory group 

king and Spanish mackerel. The Council 

is proposing to reduce the current 

annual TAC for king mackerel from 10.0 

million pounds to 7.1 million pounds, 

and for Spanish mackerel from 7.04 

million pounds to 6.7 million pounds. 

Amendment 18 was changed from a 

regulatory amendment to a plan 

amendment in September 2006 to allow 

more flexibility for alternatives. While 

the title has changed, the alternatives 

and information contained in the plan 

amendment remain the same. 


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