Opinion ID: 204097
Heading Depth: 2
Heading Rank: 2

Heading: Late Submission of Performance Data

Text: Puerto Rico first argues that HHS's decision not to accept the revised FY 2001 data submitted on February 14, 2002 was arbitrary and capricious. Puerto Rico asserts that because the data was submitted only forty-five days late, HHS had sufficient time to consider the corrected data, which would have shown a PEP of 92% and thus no FY 2001 deficiency. Accordingly, Puerto Rico contends that HHS had no logical or reasonable explanation for failing to accept the FY 2001 data for purposes of determining whether reliable and complete information had been submitted for FY 2001. [5] We hold that HHS's decision not to accept and consider Puerto Rico's untimely PEP data to determine its FY 2001 performance for incentive purposes was neither arbitrary nor capricious. An agency's interpretation of its regulations is entitled to substantial deference, and must be given controlling weight unless it is plainly erroneous or inconsistent with the regulation. Thomas Jefferson Univ. v. Shalala, 512 U.S. 504, 512, 114 S.Ct. 2381, 129 L.Ed.2d 405 (1994) (internal quotation marks omitted). Here, as Puerto Rico acknowledges, the regulation at issue unambiguously required Puerto Rico to submit the FY 2001 PEP data by December 31, 2001. 45 C.F.R. § 305.32(f). The regulation further made it clear that only data submitted by that date would be considered by HHS for purposes of determining completeness and reliability. Id. HHS has explained that this deadline is necessary to allow the Agency sufficient time to analyze the data and determine each state's entitlement to incentive payments. See Child Support Enforcement Program; Incentive Payments, Audit Penalties, 65 Fed.Reg. 82,178, 82,184 (Dec. 27, 2000) (explaining, in preamble to final rule, that [a] cut-off point [of December 31st] is necessary for us to make the required performance determinations and calculations on a timely basis). That is, because incentive payments are allocated to each state as a percentage of a common pool of funds based on relative performance, 42 U.S.C. § 658a(b), the Agency cannot reasonably accommodate late submissions without delaying incentive payments to every eligible state. Puerto Rico has not identified any evidence in the record that calls the Agency's explanation into question, nor has it offered any plausible interpretation of its own. Under these circumstances, the Agency's decision to read its regulations as written was not plainly erroneous. Alternatively, Puerto Rico argues that HHS acted in an arbitrary and capricious manner when it rejected the timely, but uncorrected, FY 2001 data covering the eighteenth-month period from January 1, 2000 to June 30, 2001. Because the regulations provide that, in certain limited circumstances, the Secretary may excuse noncompliance with Title IV-D reporting requirements, Puerto Rico argues that the Agency's decision to reject Puerto Rico's FY 2001 PEP data was an abuse of discretion. The regulation on which Puerto Rico relies provides that the Secretary may disregard a state's failure to submit complete and reliable data, and forgo the assessment of a penalty, if the Secretary determines that the incompleteness or unreliability of the data, or the noncompliance with one or more of the IV-D requirements, is of a technical nature which does not adversely affect the performance of the State's IV-D program or does not adversely affect the determination of the level of the State's paternity establishment or other performance measures percentages. 45 C.F.R. § 305.62. We agree with HHS that Puerto Rico's failure to comply with the FY 2001 PEP reporting requirements was not of a technical nature and, therefore, the Secretary had no discretion to accept Puerto Rico's submission. As the DAB reasonably found, any calculations based on eighteen months of dataas opposed to the proper twelve month period would have skewed Puerto Rico's PEP rate upward for FY 2001 and thus would have adversely affect[ed] the determination of the level of the State's paternity establishment. Under these circumstances, the Agency did not abuse its discretion when it rejected Puerto Rico's timely FY 2001 data due to the deficiencies identified above, or assessed a penalty based, in part, on that reporting failure.