DEPARTMENT
OF HEALTH AND HUMAN SERVICES
CFDA 93.044
SPECIAL PROGRAMS FOR THE AGING--TITLE III, PART B--GRANTS FOR SUPPORTIVE
SERVICES AND SENIOR CENTERS
CFDA 93.045
SPECIAL PROGRAMS FOR THE AGING--TITLE III, PART C--NUTRITION SERVICES
I. PROGRAM
OBJECTIVES
Grants for
Supportive Services and Senior Centers
The objective
of this grant program is to assist States develop and implement,
through a network of public and private agencies and service providers,
comprehensive and coordinated community-based service delivery systems
for older Americans, which will assist them in leading independent,
meaningful and dignified lives in their own homes and communities
as long as possible. The target population for these supportive
services, which include in-home services for frail elderly as well
as those provided in multi-purpose senior centers, is individuals
aged 60 and older with emphasis on those with the greatest social
and economic need, particularly low-income minorities; however,
proof of age is not required as a condition of receiving services.
As the program
itself matures, program funding is increasingly being targeted to
serve those elderly who, because of their income or age, may not
be eligible for Medicaid or Medicare, and recipients are coordinating
with other Federal and State programs in ensuring the availability
of the broadest range of services for the elderly. As a result,
many of the organizations funded under this program and the nutrition
program (see below) also receive funds from other Federal sources
as well as from non-Federal sources.
Supportive
services may include a full range of economic and social services,
including access services (transportation, outreach, information
and referral, and language translation services), legal assistance
and other counseling services, case management services, health
screening services, services designed to ensure safe and appropriate
housing, pre-retirement planning and assessment of post-retirement
needs, ombudsman services, and services to families of elderly victims
of Alzheimer's disease and related disorders with neurological and
organic brain dysfunction. Nutrition services are provided under
a separate authorization as described below.
Grants for
Nutrition Services
The objective
of this grant program is to provide individuals aged 60 or older
with nutrition services, including meals and nutrition education,
either in the home or in a congregate setting. This program is clustered
with the grants for supportive services and senior centers for purposes
of this Compliance Supplement (Supplement) since these services,
although separately earmarked, fall under the overall State planning
process and process for allocation of funds.
II. PROGRAM
PROCEDURES
Source of Governing
Requirements
These programs
are authorized under Parts B and C, respectively, of Title III of
the Older Americans Act, as amended, which is codified at 42 USC
3021-3030. These programs may also be referred to as Part B (supportive
services and senior centers) and Part C1(congregate nutrition services)
and C2 (home-delivered nutrition services). Grants to Indian tribes
for similar purposes are authorized under another title of the Older
Americans Act and are not included in this Supplement. Implementing
regulations are published at 45 CFR part 1321.
Administration
and Services
The Administration
on Aging (AoA), a component of the Department of Health and Human
Services, administers the supportive services and senior centers
program and the nutrition program in cooperation with States, sub-State
agencies, and other service providers. The States receive a formula
grant from AoA, which is used by the State Unit on Aging (SUA or,
hereafter, State Agency) both for its planning, administration,
and evaluation of these programs as well as to pass through to other
entities.
Planning and
Service Areas (PSAs) are designated by the State Agency in accordance
with AoA guidelines after considering the geographical distribution
of the service populations, location of available services, available
resources, other service area boundaries, location of units of general
purpose local government, and other factors. An Area Agency on Aging
(AAA or, hereafter, Area Agency) is then designated by the State
for each PSA after considering the views of affected local governments
(States that had a single State-wide planning and service area in
place prior to FY 1981 had the option to continue that method of
operation; there are currently eight States in this category). A
single Area Agency may serve more than one PSA. The Area Agencies,
which may be public or private non-profit agencies or organizations,
develop and administer counterpart area aging plans, as approved
by the State Agency, and, in turn, provide subgrants to or contract
with public or private service providers for the provision of services.
In general,
the State Agency and the Area Agencies are precluded from the direct
provision of services, other than ombudsman services, unless providing
the services is necessary to ensure an adequate supply of services,
the services are related to the agency's administrative functions,
or where services of comparable quality can be provided more economically
by the agency. Federal funds may pay for only a portion of the costs
of administration and services with the State and subrecipients
required to provide a matching share from other sources.
Service providers
may include profit-making organizations (42 USC 3020(c)).
State Plan
and Area Plans
A State plan,
approved by AoA, is a prerequisite to funding of the supportive
services and nutrition programs; however, the State Plan covers
the totality of AoA programs for which the State is the recipient
under the Older Americans Act. The State Plan is developed on the
basis of input from the Area Agencies as well as input from the
affected populations as a result of public hearings. The State Plan
addresses how the State intends to comply with the various requirements
of the Older Americans Act and, specifically for Title III, its
program objectives, designation of Planning and Service Areas (PSAs),
and specification of the intrastate allocation formula for distribution
of funds to each PSA. The State Plan also contains assurances required
by the Act and implementing regulations.
Unless a State
is not in compliance with Title III requirements, the State Plan
may be submitted on a two-, three-, or four-year cycle, at the option
of the State, with annual amendments, as appropriate; however, AoA
funding is provided annually. States found to be in noncompliance
may be required to submit their State Plans annually until they
are determined to be in compliance. Area plans are prepared and
submitted to the State for approval for either two, three, or four
years, with annual adjustments, as necessary.
III. COMPLIANCE
REQUIREMENTS
In developing
the audit procedures to test compliance with the requirements for
a Federal program, the auditor should first look to Part 2, Matrix
of Compliance Requirements, to identify which of the 14 types of
compliance requirements described in Part 3 are applicable and then
look to Parts 3 and 4 for the details of the requirements.
A. Activities
Allowed or Unallowed
1. State Agency
a. State Agencies
may use any amount of Title III-B (supportive services) funding
necessary to conduct an effective ombudsman program (42 USC 3024
(d)(1)(B)).
b. Grant funds
may be used for paying the costs of providing for a State volunteer
services coordinator (42 USC 3024 (e)).
c. Grant funds
may be used for State plan administration, including State Plan
preparation, evaluation of activities carried out under the Plan,
the collection of data and the conduct of analyses related to the
need for services, dissemination of information, short-term training,
and demonstration projects (42 USC 3028 (a)).
d. No supportive
services, nutrition services, or in-home services may be provided
directly by the State Agency unless the State Agency determines
that direct provision of services is necessary to ensure an adequate
supply of services, where such services are related to the agency's
administrative functions, or where such services of comparable quality
can be provided more economically by the State Agency (42 USC 3027
(a)(10)).
2. Area
Agency
a. Funds may
be used for plan administration, operation of an advisory council,
activities related to advocacy, planning, information sharing, and
other activities leading to development or enhancement within the
designated service area(s) of comprehensive and coordinated community-based
systems of service delivery to older persons (45 CFR section 1321.53).
b. Funds may
be used for paying the costs of providing for an area volunteer
services coordinator (42 USC 3024(e) and 3026(a)(12)).
c. If approved
by the State Agency, an Area Agency may use service funds for program
development and coordination activities (42 USC 3024 (d)(1)(D);
45 CFR section 1321.17(f)(14)(i)).
d. No supportive
services, nutrition services, or in-home services may be provided
directly by an Area Agency except if, in the judgment of the State
Agency, direct provision of services is necessary to ensure an adequate
supply of services, where such services are related to the agency's
administrative functions, or where such services of comparable quality
can be provided more economically by the agency (42 USC 3027 (a)(10)).
3. Service
Providers
a. Funds may
be used to assist in the operation of multi-purpose senior centers
and to meet all or part of the costs of compensating professional
and technical personnel required for center operation (42 USC 3030d
(b)(2)).
b. Funds may
be used for nutrition services and supportive services consistent
with the terms of the agreement between the Area Agency and the
service provider (42 USC 3026 (a)(1), 3030d(a), and 3030e).
c. Funds may
be used for services associated with access to supportive services
for in-home services, and for legal assistance (42 USC 3026 (a)(2)).
d. Nutrition
services may be provided to older individuals' spouses, who may
not be eligible for these services in their own right, on the same
basis as they are provided to older individuals, and may be made
available to handicapped or disabled individuals who are less than
60 years old but who reside in housing facilities occupied primarily
by older individuals at which congregate nutrition services are
provided (42 USC 3027 (a)(13)(A)).
e. In accordance
with procedures established by the Area Agencies, nutrition project
administrators may offer meals to individuals providing volunteer
services during the meal hours and to individuals with disabilities
who reside at home with and accompany eligible individuals (42 USC
3027 (a)(13)(I)).
f. Funds may
be used for provision of home-delivered meals to older individuals
(42 USC 3027 (a)(13)(B)).
g. Funds may
be used to acquire (in fee simple or by lease for 10 years or more),
alter, or renovate existing facilities or to construct new facilities
to serve as multi-purpose senior centers for not less than 10 years
after acquisition, or 20 years after completion of construction,
unless waived by the Assistant Secretary for Aging (42 USC 3027
(a)(15)).
G. Matching,
Level of Effort, Earmarking
1. Matching
a. State
(1) States
must contribute from State or local sources at least 25 percent
of the cost of State Plan administration as their matching share.
This may include cash or in-kind contributions by the State or third
parties (42 USC 3028 (a)(1), 42 USC 3029 (b), and 45 CFR section
1321.47).
(2) Using fiscal
year (FY) 1980 as the baseline, the difference, if any, between
the amount representing the match for services (of at least 15 percent
State-wide) in FY 1980 and the amount required in any subsequent
FY shall be met from State sources only (42 USC 3029 (b)).
(3) All services,
whether provided by the State Agency, an Area Agency or other service
provider (including any ombudsman services provided under the authority
of 42 USC 3024 (d)(1)(D)) must be funded with a non-Federal match
of at least 15 percent. Funds for ombudsman services provided under
the authority of 42 USC 3024 (d)(1)(B) are not required to be matched.
This percentage must be met on a State-wide basis (42 USC 3042 (d)(1)(D);
45 CFR section 1321.47).
b. State
and Area Agencies
Area Agencies,
in the aggregate, must contribute at least 25 percent of the costs
of administration of area plans (42 USC 3024 (d)(1)(A); 45 CFR section
1321.47).
(1) State -
Since this match is computed based on the aggregate of all Area
Agencies in the State, the auditor's testing of the amount of this
match is performed at the State Agency.
(2) Area Agencies
- The auditor's testing of the allowability of the matching (e.g.,
from an allowable source and in compliance with the administrative
requirements and allowable costs/cost principles requirements) should
be performed at the Area Agencies.
2.1 Level
of Effort - Maintenance of Effort - State
The State Agency
must spend for both services and administration at least the average
amount of State funds it spent under the State plan for these activities
for the three previous fiscal years. If the State agency spends
less than this amount, the Assistant Secretary reduces the State's
allotments for supportive and nutrition services under this part
by a percentage equal to the percentage by which the State reduced
its expenditures (42 USC 3029 (c); 45 CFR section 1321.49). See
L.1. for reporting requirement regarding maintenance of effort.
2.2 Level
of Effort - Supplement Not Supplant - Not Applicable
3. Earmarking
a. State
(1) Expenditures
for administration of the State plan are limited to the greater
of five percent (or $300,000 or $500,000 depending on the aggregate
amount appropriated or a lesser amount for the U.S. territories)
of the overall allotment to a State under Title III unless a waiver
is granted by the Assistant Secretary on Aging (42 USC 3028 (a)(1),
and (b)(1), (2) and (3)).
(2) After determination
of the amount to be applied to State plan administration under 42
USC 3028 (b), the State may make up to (and including) 10 percent
of that amount available for the cost of administration of Area
Plans. The State may either calculate the 10 percent based on the
total allotment from AoA or on the amount remaining after deducting
the amount to be applied to State Plan administration. This is an
aggregate amount and need not be applied on an Area Agency-by-Area
Agency basis (42 USC 3024 (d)(1)(A)).
(3) Any amounts
available to the State for State plan administration which the State
determines are not needed for that purpose may be used by the State
to supplement the amount available for administration of Area Plans
(42 USC 3028 (a)(2)).
(4) Any State
which has been designated as a single planning and service area
may elect to be subject to the State Plan administration limit (five
percent) or the Area Plan administration (10 percent) limit (42
USC 3028 (a)(3)).
(5) A State
may transfer:
(a) Up to 30
percent of a State's separate allotments for congregate and home-delivered
nutrition services between those two allotments without AoA approval
(42 USC 3028 (b)(4)(a); 45 CFR section 1321.45 (a)).
(b) Not more
than 20 percent between programs under Part B and Part C (Parts
C1 and/or C2) for use as the State considers appropriate (42 USC
3028 (b)(5)(A)).
A State Agency
may not delegate to an Area Agency or any other entity the authority
to make such transfers 42 USC 3028 (b) (6)).
Additional
amounts may be transferred with AoA approval (42 USC 3028 (b)(4)(B)
and (b)(5) (B)).
(6) If a State
allotted 10 percent of its allotment for administration of area
plans, the State may allow any Area Agency, upon request and with
justification, to use an amount (that an Area Agency would otherwise
make available for direct services) for program development and
coordination activities by that Area Agency (42 USC 3024 (d)(1)(D);
45 CFR section 1321.17(f)(14)(i)).
b. Area
Agency
As provided
in agreements with the State Agency, Area Agencies earmark portions
of their allotment. The typical earmarks are:
1) A maximum
amount or percentage for Program development and coordination activities
by that agency (42 USC 3024 (d)(1)(D); 45 CFR section 1321.17(f)(14)(i)).
(2) A minimum
amount or percentage for Services related to access, in-home services,
and legal assistance (42 USC 3026 (a)(2) and (b)).
H. Period
of Availability of Federal Funds
Funds are made
available to the State annually and must be obligated by the State
by the end of the Federal fiscal year in which they were awarded.
The State has two years to liquidate all obligations for its administration
of the State Plan and for awards to the Area Agencies consistent
with their intrastate allocation formula. Therefore, in any given
year, multiple years of funding are being used to provide services
State-wide.
Whenever the
Assistant Secretary on Aging determines that any amount allotted
to a State under Parts B or C for a fiscal year will not be used
to carry out the purpose for which the allotment was made, the funds
may be reallotted to one or more other States. Any amount made available
to a State as the result of a reallotment shall be regarded as part
of the State's allotment for the same fiscal year in which the funds
were appropriated, but shall remain available for obligation by
the State until the end of the succeeding fiscal year (42 USC 3024
(b)).
J. Program
Income
Service providers
are required to provide an opportunity to individuals being served
under the nutrition services program to make voluntary contributions
for meals. These voluntary contributions are to be added to the
amounts made available by the State or Area Agency and must be used
to increase the number of meals served, facilitate access to meals,
and provide other supportive services directly related to nutrition
services (42 USC 3027(a)(13)(C)(i)and (ii)).
L. Reporting
1. Financial
Reporting
a. SF-269,
Financial Status Report, and AoA Supplemental Form (OMB No.
0985-0004) - Applicable (Required semi-annually)
b. SF-270,
Request for Advance or Reimbursement - Not Applicable
c. SF-271,
Outlay Report and Request for Reimbursement for Construction
Program - Not Applicable
d. SF-272,
Federal Cash Transactions Report - Payments under this program
are made by the Department of Health and Human Services, Payment
Management System. Reporting equivalent to the SF-272 is accomplished
through the Payment Management System and is evidenced by the PMS
272 series of reports.
2. Performance
Reporting - Not Applicable
3. Special
Reporting - Not Applicable
M. Subrecipient
Monitoring
1. State Agency
The State Agency
is required to develop policies governing all aspects of programs
operated under the State Plan and to monitor their implementation,
including assessing performance for quality and effectiveness and
specifying data system requirements to collect necessary and appropriate
data (45 CFR sections 1321.11 and 1321.17 (f)(9)).
2. Area
Agencies
Area Agencies
are required to oversee the activities of service providers with
respect to provision of services, reporting, voluntary contributions,
and coordination of services (45 CFR section 1321.65).
DEPARTMENT
OF HEALTH AND HUMAN SERVICES
CFDA 93.558
TEMPORARY ASSISTANCE FOR NEEDY FAMILIES (TANF)
I. PROGRAM
OBJECTIVES
The objectives
of this program are to provide time-limited assistance to needy
families with children so that the children can be cared for in
their own homes or in the homes of relatives; end dependence of
needy parents on government benefits by promoting job preparation,
work, and marriage; prevent and reduce out-of-wedlock pregnancies,
including establishing prevention and reduction goals; and encourage
the formation and maintenance of two-parent families. This program
replaces the Aid to Families with Dependent Children (AFDC), Job
Opportunities and Basic Skills Training (JOBS), and Emergency Assistance
(EA) programs.
II. PROGRAM
PROCEDURES
Source of Governing
Requirements
This program
is authorized under Title IV-A of the Social Security Act, as amended
by the Personal Responsibility and Work Opportunity Reconciliation
Act of 1996 (PRWORA) (P.L. 104-193), and subsequent amendments thereto,
and codified at 42 USC 601-619. Other sections of the Social Security
Act that were not amended by PRWORA continue to apply to TANF and
may be referenced in this Supplement. PRWORA was signed into law
on August 22, 1996, and required State implementation no later than
July 1, 1997. The statute also afforded the States (other than eligible
territories) the opportunity for earlier implementation. Proposed
implementing program regulations have been published as a Notice
of Proposed Rulemaking in the November 20, 1997, Federal Register
(62 FR 224, pp.62124 et seq.). The Department of Health and Human
Services (HHS) Administration for Children and Families (ACF) has
issued several Policy Announcements and Program Instructions for
State use, primary among them, TANF-ACF-PA-97-1, January 31, 1997.
TANF is subject
to the A-102 Common Rule and OMB Circular A-87. This is in contrast
to AFDC which, as described in Appendix I, was excluded from the
A-102 Common Rule.
Administration
and Services
ACF, a component
of HHS, administers the TANF program on behalf of the Federal Government.
To be eligible for the TANF block grant, a State (including the
District of Columbia, the Commonwealth of Puerto Rico, the United
States Virgin Islands, Guam, and American Samoa) must submit a State
plan containing specified information and assurances within the
27-month period prior to the Federal fiscal year in which the funds
are to be provided.
Indian Tribal
governments are also eligible entities for TANF but under another
set of requirements that ACF will implement separately. Until this
Supplement is updated for these requirements, audits of Indian Tribal
governments should follow Part 7 rather than Part 4 of this Supplement.
Following ACF
review of the State Plan and determination that it is complete,
ACF awards the basic "State Family Assistance Grant" (SFAG) to the
State using a formula allocation derived from funding levels under
the superseded programs. The SFAG is a fixed amount to the State
subject to reductions based on any penalties assessed. In addition,
amounts may be adjusted on the basis of separate Federal funding
of counterpart Indian tribal programs within the State. States meeting
the qualifying criteria may also receive supplemental grants, bonuses,
loans, and payments from a contingency fund. As long as the minimum
requirements are met, a State has significant flexibility in designing
programs and determining eligibility requirements and may use grant
funds to provide cash or non-cash assistance, including direct services,
and for administrative activities. Along with the discretion provided
to the States, there are also a number of provisions to ensure accountability
for results, in the form of monetary penalties, and requirements
to provide a variety of data to ACF about expenditures and individuals
receiving benefits under the program. In addition to the penalties
for failure to meet programmatic or administrative requirements,
a State may be rewarded for its performance in program-related areas,
such as reducing out-of-wedlock births.
Other Considerations
As of July
1, 1997, all States, including the eligible territories, had to
implement the TANF requirements. However, waivers granted under
the authority of Section 1115 of the Social Security Act, that allowed
a State to operate a program that did not comply with specific statutory
requirements of TANF's predecessor programs, remain in effect in
some States. In some cases, these waivers are inconsistent with
the statutory requirements of the TANF program, but are being allowed
under 42 USC 615 to continue until their expiration, despite the
inconsistency.
III. COMPLIANCE
REQUIREMENTS
In developing
the audit procedures to test compliance with the requirements for
a Federal program, the auditor should look to Part 2, Matrix of
Compliance Requirements, to identify which of the 14 types of compliance
requirements described in Part 3 are applicable and then look to
Parts 3 and 4 for the details of the requirements.
A. Activities
Allowed or Unallowed
1. Funds may
be used in any manner reasonably calculated to achieve the purposes
of the program (as specified in 42 USC 601), including providing
low-income households with assistance in meeting home heating and
cooling costs, or any uses authorized for State expenditure under
prior Parts A and F, Title IV-A, of the Social Security Act as in
effect on September 30, 1995 or August 21, 1996, at the State's
option (42 USC 604(a)(1) and (2)).
2. A State
may use funds for programs to prevent and reduce the number of out-of-wedlock
pregnancies, including programs targeted to law enforcement officials,
the educational system and counseling services, that provide education
and training of women and men on the problem of statutory rape (42
USC 602(a)(1)(A)(v) and (vi)).
3. Funds may
be used to make payments or provide job placement vouchers to State-approved
public and private job placement agencies providing employment placement
services to individuals receiving assistance under TANF (42 USC
604(f)).
4. Funds may
be used to implement an electronic benefits transfer system (42
USC 604(g)).
5. Funds may
be used to carry out a program to fund individual development accounts
(as described in 42 USC 604(h)(2)) established by individuals eligible
to receive assistance under TANF (42 USC 604(h)).
6. Funds may
not be used for juvenile justice activities except for those States
having approved AFDC State Plans under Title IV-A which included
Emergency Assistance juvenile justice activities as of September
30, 1995 or August 21, 1996, at the State's option (42 USC 604(a)(2)).
7. Grant funds
may not be used to provide medical services other than pre-pregnancy
family planning services (42 USC 608(a)(6)).
8. Funds may
not be used for sectarian worship, instruction, or proselytization
(42 USC 604a(j)).
9. A State
may contract with charitable, religious and private organizations
to provide administrative and programmatic services and may provide
beneficiaries of assistance with certificates, vouchers, or other
forms of disbursement which are redeemable with such organization
(42 USC 604a(b)).
10. A State
may transfer up to 30 percent combined total of the State family
assistance grant, supplemental grant for population increases, and
bonus funds for high performance and illegitimacy reduction, if
any, for a given fiscal year to carry out programs under the Social
Services Block Grant (Title XX) (CFDA 93.667) and/or the Child Care
and Development Block Grant (CFDA 93.575). However, no more than
10 percent may be transferred to Title XX and such amounts may be
used only for programs or services to children or their families
whose income is less than 200 percent of the poverty level. Contingency
funds under 42 USC 603(b) cannot be transferred under this authority
(42 USC 604(d)).
C. Cash
Management Under the TANF program's State Maintenance of Effort
(MOE) requirement, the drawdown of Federal cash should not exceed
the federally funded portion of TANF expenditures taking into account
the State MOE accounts. For example, if a State has an MOE level
that is calculated to be 40 percent of the total funds for a fiscal
year, Federal draws should not exceed 60 percent of the amount needed
to cover disbursements in any time period (Department of the Treasury,
Financial Management Service CMIA Policy Statement Number 19).
E. Eligibility
1. Eligibility
for Individuals
The State Plan
provides the specifics on how eligibility is determined in each
State. The State Plan and eligibility requirements must comply with
the following Federal requirements:
a. To be eligible
for assistance under this program, a family must include a minor
child, i.e., an individual less than 18 years old, or, if a full-time
student in a secondary school (or the equivalent level of vocational
or technical training), less than 19 years old, who resides with
the family (consistent with 42 USC 608(a)(10)); or a pregnant individual.
A family must also meet the State's eligibility requirements as
provided in the State Plan (42 USC 602, 608(a)(1) and 619(2)).
b. Any family
that includes an adult or minor child head of household or a spouse
of the head of household who has received assistance under any State
program funded by Federal TANF funds for 60 months (whether or not
consecutive) from the date of the initiation of the State program
is ineligible for additional federally funded TANF services unless
an exemption is granted by the State on the basis of hardship or
a family member having been battered or subjected to extreme cruelty.
In determining the number of months for which the head of household
or the spouse of the head of household has received assistance,
the State must not count any month during which the adult received
the assistance while living in Indian country or in an Alaskan Native
Village and the most reliable data available with respect to that
month (or a period including that month) indicate at least 50 percent
unemployment among adults living in Indian country or in the village
(42 USC 608(a)(7)).
(See III.G.3.,
Earmarking, for testing the limits related to the number of exemptions.)
c. A State
may not use Federal TANF funds to provide assistance to an individual
who is under age 18, is unmarried, has a minor child at least 12
weeks old, and has not successfully completed high school or its
equivalent unless the individual either participates in education
activities directed toward attainment of a high school diploma or
its equivalent, or participates in an alternative education or training
program approved by the State (42 USC 608(a)(4)).
d. A State
may not use Federal TANF funds to provide assistance to an unmarried
individual under 18 caring for a child, if the minor parent and
child are not residing with a parent, legal guardian, or other adult
relative, unless one of the statutory exceptions applies (42 USC
608(a)(5)).
e. A State
may not use any part of the grant to provide assistance for a minor
child who has been or is expected to be absent from the home for
a period of 45 consecutive days or, at the option of the State,
such period of not less than 30 and not more than 180 consecutive
days unless the State grants a good cause exception, as provided
in its State Plan (42 USC 608(a)(10)).
f. A State
may not use any part of the grant to provide assistance for an individual
who is a parent (or other caretaker relative) of a minor child who
fails to notify the State agency of the absence of the minor child
from the home, as in paragraph e. immediately above, within five
days of the date that it becomes clear to that individual that the
child will be absent for the specified period of time (42 USC 608(a)(10)(C)).
g. A State
shall require, as a condition of providing assistance, that a member
of the family assign to the State the rights the family member may
have for support from any other person. This assignment does not
exceed the amount of assistance provided (42 USC 608(a)(3)).
h. A State
may not use any part of the grant to provide cash assistance to
an individual during the 10-year period that begins on the date
the individual is convicted in Federal or State court of having
made a fraudulent statement or representation with respect to place
of residence in order to simultaneously receive assistance from
two or more States under TANF, Title XIX, or the Food Stamp Act
of 1977, or benefits in two or more States under the Supplemental
Security Income program under Title XVI of the Social Security Act.
If the President of the United States grants a pardon with respect
to the conduct which was the subject of the conviction, this prohibition
will not apply for any month beginning after the date of the pardon
(42 USC 608(a)(8)) .
i. A State
may not use any part of the grant to provide assistance to any individual
who is fleeing to avoid prosecution, or custody or confinement after
conviction, for a felony or attempt to commit a felony (or in the
State of New Jersey, a high misdemeanor), or who is violating a
condition of probation or parole imposed under Federal or State
law (42 USC 608(a)(9)(A)).
j. Qualified
aliens, as defined at 8 USC 1641b, entering the United States on
or after August 22, 1996, are not eligible for Federal TANF benefits
for a period of five years beginning on the date of the alien's
entry into the United States, unless they meet an exception at 8
USC 1612(b)(2) or 1613. A State may, at its option, provide Federal
TANF assistance to qualified aliens who entered the United States
before August 22, 1996, and, for aliens entering the United States
on or after August 22, 1996, after the expiration of the five-year
time bar. Non-qualified aliens may not receive Federal TANF assistance
unless one of the exceptions at 8 USC 1612(b)(2) applies (8 USC
1612 and 1613).
k. An individual
convicted under Federal or State law of any offense which is classified
as a felony and which involves the possession, use, or distribution
of a controlled substance (as defined the Controlled Substances
Act (21 USC 802(6)) is ineligible for assistance under TANF if the
conviction was based on conduct occurring after August 22, 1996.
A State shall require each individual applying for assistance under
TANF to state in writing whether the individual or any member of
their household has been convicted of such a felony involving a
controlled substance. However, a State may by law exempt individuals
or limit the time period of this prohibition (21 USC 862a).
l. If an individual
refuses to engage in required work, a State must reduce TANF assistance
to the family, at least pro rata, with respect to any period during
the month in which the individual so refuses, or may terminate assistance.
Any reduction or termination is subject to good cause or other exceptions
as the State may establish (42 USC 607(e)(1)). However a State may
not reduce or terminate TANF assistance based on a refusal to work
if the individual is a single custodial parent caring for a child
who is less than 6 years of age if the individual can demonstrate
the inability (as determined by the State) to obtain child care
for one or more of the following reasons: (1) the unavailability
of appropriate care within a reasonable distance of the individual's
work or home; (2) unavailability or unsuitability of informal child
care; or (3) unavailability of appropriate and affordable formal
child care (42 USC 607(e)(2)).
2. Eligibility
for Groups of Individuals or Area of Service Delivery - Not
Applicable
3. Eligibility
of Subrecipients - Not Applicable
G. Matching,
Level of Effort, Earmarking
1. Matching
- Not Applicable
2.1 Level
of Effort - Maintenance of Effort
a. TANF
MOE - A State is required to maintain in each succeeding year
an amount of "qualified State expenditures" (as defined in 42 USC
609(a)(7)(B)) at least at the applicable percentage of historic
State expenditures for eligible families (as defined in 42 USC 609(a)(7)(B)(i)(IV))
for the immediately preceding fiscal year. The applicable percentage
for fiscal years 1997 through 2002 is 80 percent of the amount of
non-Federal funds the State spent in Fiscal Year (FY) 1994 on AFDC
or 75 percent if the State meets the Act's work participation rate
requirements (42 USC 607(a)) for the fiscal year. This is termed
"TANF MOE" and the requirement is based on the Federal fiscal year.
This amount was prorated for FY 1997 based on a State's entry into
the program. Qualified expenditures with respect to eligible families
may come from all programs, i.e., the State's TANF program as well
as programs separate from the State's TANF program (42 USC 609(a)(7)(A)
and 609(a)(7)(B)(i)(I)).
If application
of a penalty results in a reduction of Federal TANF funding, a State
is required in the immediately succeeding fiscal year to spend from
State funds an amount equal to the total amount of the reduction,
in addition to the otherwise required TANF MOE (42 USC 609(a)(12)).
Expenditures
to support TANF MOE are shown on the TANF ACF 196 Financial Report
under the columns headed "State TANF Expenditures(MOE)" and "Separate
State Programs (MOE)."
b. Contingency
Fund MOE - A State must exceed its annual reconciliation maintenance
of effort level, which is 100 percent of historic State expenditures
in FY 1994, to qualify for contingency funding. This is termed "Contingency
Fund MOE." The Contingency Fund MOE requirement may be met only
through qualified expenditures under the State's TANF program with
respect to eligible families. Qualified expenditures consist of
those defined under 42 USC 609(a)(7)(B)(i)(I), but excludes those
expenditures described in subclause (I)(bb) (42 USC 603(b)(6)(B)(ii)
and 609(a)(10)).
c. Limitations
on "Qualified State expenditures" - Expenditures under pre-existing
programs, other than those funded under Title IV-A existing prior
to PRWORA/TANF, may not count toward the State's MOE requirement
for the current year unless the current year's expenditures with
respect to eligible families exceed the expenditures made under
the State or local program in FY 1995. To be considered as "exceeding"
the FY 1995 level, the expenditures must be new or additional expenditures
(42 USC 609(a)(7)(B)(i)(II)(aa)). In addition, expenditures by the
State from amounts that originated from Federal funds may not count
toward meeting a State's MOE requirement even if the expenditures
"qualify" (42 USC 609(a)(7)(B)(iv)(I)).
Except for
child care expenditures, double-counting of expenditures to meet
the MOE requirement is prohibited. For TANF purposes, a State may
count a limited amount (i.e., the Matching Fund MOE under CFDA 93.596)
for the child care expenditures also claimed as a condition of receiving
Federal funds under the Child Care and Development Fund (CFDA 93.596)
(42 USC 609(a)(7)(B)(iv)(II-IV)).
2.2 Level
of Effort - Supplement not Supplant - Not Applicable
3. Earmarking
a. A State
may not spend more than 15 percent for administrative purposes,
excluding expenditures for information technology and computerization
needed for required tracking and monitoring, of the total combined
amounts available under the State family assistance grant, supplemental
grant for population increases, bonus funds for high performance
and illegitimacy reduction, and contingency funds (42 USC 604(b)(1)
and (2)).
b. The number
of exemptions granted by a State for families that include an adult
or minor child head of household, or the spouse of the head of household,
who has received assistance under any State program funded by Federal
TANF funds for 60 months (whether or not consecutive) may not exceed
20 percent of the average monthly number of families to which the
State provided assistance during the fiscal year or the immediately
preceding fiscal year (but not both), as the State may elect (42
USC 608(a)(7)(C)(ii)).
(See III.E.1,
Eligibility for Individuals, for related eligibility testing.)
H. Period
of Availability of Federal Funds
Funds, other
than contingency funds, are available to the State until expended;
contingency funds may be used for qualified expenditures only in
the fiscal year for which the funding is provided (42 USC 603(b)
and 604(e)).
L. Reporting
1. Financial
Reporting
a. SF-269,
Financial Status Report - Not Applicable
b. SF-270,
Request for Advance or Reimbursement - Not Applicable
c. SF-271,
Outlay Report and Request from Reimbursement for Construction
Program - Not Applicable
d. SF-272,
Federal Cash Transactions Report - Payments under this program
are made by the Department of Health and Human Services, Payment
Management System. Reporting equivalent to the SF-272 is accomplished
through the Payment Management System and is evidenced by the PMS
272 series of reports.
e. Temporary
Assistance for Needy Families (TANF) ACF-196 Financial Report
(OMB No. 0970-0165) is due quarterly in lieu of the SF-269,
Financial Status Report. With the fourth quarter report,
the State must also file definitions and descriptive information
on the TANF program and expenditure-related information on the State's
separate program(s) used to meet the TANF maintenance of effort
requirement. Each fiscal year's expenditure reporting must be separate;
therefore, multiple reports may be required if the State spent funds
from more than one fiscal year in a given quarter.
2. Performance
Reporting - Not Applicable
3. Special
Reporting
Emergency
TANF Data Report, ACF-198, (OMB No.0970-0164) Quarterly
on the basis of information collected monthly, including both disaggregated
and aggregated data (42 USC 611(a)). States should select disaggregated
data in accordance with the Generic Sampling Specifications provided
with the form or the report should indicate the sampling plan followed.
Those States implementing TANF by March 31, 1997, were required
to submit their initial reports to cover the period from six months
after the date of their implementation of the program or July 1,
1997, whichever is later, through September 30, 1997.
Key Line
Items - Section 1 (disaggregated data):
Item 8 -- Type
of Family for Work Participation
Item 13 B. -- Cash and Cash Equivalent - Number of Months
Item 14 B. -- Work Subsidies-Number of Months
Item 15 B.-- Child CareCNumber of Months
Item 20 -- Date of Birth (Age)
Item 24 -- Relationship to Head of Household
Item 30 -- Work Participation Status
Items 31-44 -- Adult Work Participation Activities
Key Line Items
- Section 3 (aggregated data):
Item 4 -- Total
Number of Families
Item 5 -- Total Number of Two-Parent Families
Note 1: Section
1, items 30 and 31-44 and Section 3, items 4 and 5 are used by HHS
to determine whether a State meets the two-parent participation
rate and the overall rate which are achieved by having adults participate
in specified work activities for specified minimum hours per week.
The proper classification of work participation and caseload reduction
are critical to this calculation. HHS may penalize a State for up
to 21 percent of the SFAG for failure to meet the participation
rates (42 USC 607 and 609(a)(3)).
Note 2: Some
of the data required by TANF will be maintained at the local government
level rather than the State level. Regardless of any data collection
difficulties, the State is required to accurately collect and report
the data included in the TANF reports.
N. Special
Tests and Provisions
1. Child Support
Non-Cooperation
Compliance
Requirement - If the State agency responsible for administering
the State plan approved under Title IV-D of the Social Security
Act determines that an individual is not cooperating with the State
in establishing paternity, or in establishing, modifying or enforcing
a support order with respect to a child of the individual, and reports
that information to the State agency responsible for TANF, the State
TANF agency must (1) deduct an amount equal to not less than 25
percent from the TANF assistance that would otherwise be provided
to the family of the individual, and (2) may deny the family any
TANF assistance. HHS may penalize a State for up to five percent
of the SFAG for failure to substantially comply with this required
State child support program (42 USC 608(a)(2) and 609(a)(8)).
Audit Objective
- To determine whether, after notification by the State IV-D
agency, the TANF agency has taken necessary action to reduce or
deny TANF assistance.
Suggested
Audit Procedures:
a. Review the
State's TANF policies and operating procedures concerning this requirement.
b. Test a sample
of cases referred by the IV-D agency to the TANF agency to ascertain
if benefits were reduced or denied as required.
2. Income
Eligibility and Verification System (IEVS)
Compliance
Requirement - Each State shall participate in the Income Eligibility
and Verification System (IEVS) required by section 1137 of the Social
Security Act as amended. Under the State Plan the State is required
to coordinate data exchanges with other federally assisted benefit
programs, request and use income and benefit information when making
eligibility determinations, and adhere to standardized formats and
procedures in exchanging information with other programs and agencies.
Specifically, the State is required to request and obtain information
as follows (42 USC 1320b-7; 45 CFR 205.55):
1. Wage information
from the State Wage Information Collection Agency (SWICA) should
be obtained for all applicants at the first opportunity following
receipt of the application, and for all recipients on a quarterly
basis.
2. Unemployment
Compensation (UC) information should be obtained for all applicants
at the first opportunity, and in each of the first three months
in which the individual is receiving aid. This information should
also be obtained in each of the first three months following any
recipient-reported loss of employment. If an individual is found
to be receiving UC, the information should be requested until benefits
are exhausted.
3. All available
information from the Social Security Administration for all applicants
at the first opportunity (See Federal Tax Return Information
below).
4. Information
from the Immigration and Naturalization Service, and from other
agencies in the State or in other States that might provide income
or other useful information.
5. Unearned
income from the Internal Revenue Service (IRS) (See Federal Tax
Return Information below).
Federal
Tax Return Information - Information from the IRS and some information
from Social Security Administration (SSA) is Federal tax return
information and subject to use and disclosure restrictions by 26
USC 6103. Individual data received from the SSA's Beneficiary Earnings
Exchange Record (BEER), consisting of wage, self-employment, and
certain other income information is considered Federal tax return
information. However, benefits payments such as Supplemental Security
Income (SSI) are SSA data and not Federal tax return information.
Under 26 USC 6103, disclosure of Federal tax return information
from IEVS is restricted to officers and employees of the receiving
agency. Outside (non-agency) personnel (including auditors) are
not authorized to access this information either directly or by
disclosure from receiving agency personnel.
The State is
required to review and compare the information obtained from each
data exchange against information contained in the case record to
determine whether it affects the individual's eligibility or level
of assistance, benefits or services under the TANF program, with
the following exceptions:
- The State
is permitted to exclude categories of information items from follow-up
if it has received approval from ACF after having demonstrated that
follow-up is not cost effective.
- The State
is permitted, with ACF approval, to exclude information items from
certain data sources without written justification if it followed
up previously through another source of information. However, information
from these data sources that is not duplicative and provides new
leads may not be excluded without written justification.
The State shall
verify that the information is accurate and applicable to the case
circumstances either through the applicant or recipient, or through
a third party, if such determination is appropriate based on agency
experience or is required before taking adverse action based on
information from a Federal computer matching program subject to
the Computer Matching and Privacy Protection Act (45 CFR section
205.56).
For applicants,
if the information is received during the application process, the
State must use the information, to the extent possible, to determine
eligibility. For recipients or individuals for whom a decision could
not be made prior to authorization of benefits, the State must initiate
a notice of case action or an entry in the case record that no case
action is necessary within 45 days of its receipt of the information.
Under certain circumstances, action may be delayed beyond 45 days
for no more than 20 percent of the information items targeted for
follow-up (45 CFR section 205.56).
HHS may penalize
a State for up to two percent of the SFAG for failure to participate
in IEVS (42 USC 609(a)(4) and 1320b-7).
Audit Objective
- To determine whether the State has established and implemented
the required IEVS system for data matching, and verification and
use of such data. (This audit objective does not include Federal
tax return information as discussed in the compliance requirements.)
Suggested
Audit Procedures:
a. Review State
operating manuals and other instructions to gain an understanding
of the State's implementation of the IEVS system.
b. Test a sample
of TANF cases subject to IEVS to ascertain if the State:
(1) Used the
IEVS to determine eligibility in accordance with the State Plan.
(2) Requested
and obtained the data from the State Wage Information Collection
Agency, the State unemployment agency, the Social Security Administration
(excluding Federal tax return information as discussed in the compliance
requirements), the Immigration and Naturalization Service, and other
agencies, as appropriate, and performed the required data matching.
(3) Properly
considered the information obtained from the data matching in determining
eligibility and the amount of TANF benefits.
3. Adult
Custodial Parent of Child under Six When Child Care Not Available
Compliance
Requirement - If an individual is an adult single custodial parent
caring for a child under the age of six, the State may not reduce
or terminate assistance for the individual's refusal to engage in
required work if the individual demonstrates to the State an inability
to obtain needed child care based upon the following reasons: (a)
unavailability of appropriate child care within a reasonable distance
from the individual's home or work site; (b) unavailability or unsuitability
of informal child care by a relative or under other arrangements;
and (c) unavailability of appropriate and affordable formal child
care arrangements. The determination of inability to find child
care is made by the State. HHS may penalize a State for up to five
percent of the SFAG for violation of this provision (42 USC 607(e)(2)
and 609(a)(11)).
Audit Objective
- Determine whether the State has improperly reduced or terminated
assistance to adult single custodial parents who refused to work
because of inability to obtain child care for a child under the
age of six.
Suggested
Audit Procedures:
a. Gain an
understanding of the criteria established by the State to determine
benefits for an adult single custodial parent who refused to work
because of inability to obtain child care for a child who is under
the age of six.
b. Select a
sample of adult single custodial parents caring for a child who
is under six years of age whose benefits have been reduced or terminated.
c. Ascertain
if the benefits were improperly reduced or terminated because of
inability to obtain child care.
IV. OTHER
INFORMATION
Transfers
out of TANF
As discussed
in III.A, Activities Allowed or Unallowed, funds may be transferred
out of TANF to Social Services Block Grant (Title XX) (CFDA 93.667)
and the Child Care and Development Block Grant (CFDA 93.575). These
transfers are reflected on the quarterly Temporary Assistance
for Needy Families (TANF) ACF-196 Financial Report. The amounts
transferred out of TANF are subject to the requirements of the program
into which they are transferred and should not be included in the
audit universe and total expenditures of TANF when determining Type
A programs. On the Schedule of Expenditures of Federal Awards, the
amount transferred out should not be shown as TANF expenditures
but should be shown as expenditures for the program into which they
are transferred.
Transfers
into TANF
As described
in Part 4, Social Services Block Grant (SSBG) program (CFDA 93.667),
Subpart III.A. Activities Allowed or Unallowed, a State may transfer
up to 10 percent of its annual allotment under SSBG to this and
six other block grant programs for support of health services, health
promotion and disease prevention activities, low-income home energy
assistance, or any combination of these activities.
Amounts transferred
into this program are subject to the requirements of this program
when expended and should be included in the audit universe and total
expenditures of this program when determining Type A programs. On
the Schedule of Expenditures of Federal Awards, the amounts transferred
in should be shown as expenditures of this program when such amounts
are expended.
DEPARTMENT
OF HEALTH AND HUMAN SERVICES
CFDA 93.563
CHILD SUPPORT ENFORCEMENT--TITLE IV-D
I. PROGRAM
OBJECTIVES
The objectives
of the Child Support Enforcement program are to (1) enforce support
obligations owed by non-custodial parents, (2) locate absent parents,
(3) establish paternity, and (4) obtain child and spousal support.
II. PROGRAM
PROCEDURES
Administration
and Services
The Child Support
Enforcement program is administered at the Federal level by the
Office of Child Support Enforcement (OCSE), Administration for Children
and Families (ACF), a component of the Department of Health and
Human Services (HHS). Funding is provided to the 50 States, the
District of Columbia, Puerto Rico, the Virgin Islands and Guam,
based on a State plan and amendments, as required by changes in
statutes, rules, regulations, interpretations, and court decisions,
submitted to and approved by the cognizant ACF Regional Administrator.
This program
is an open-ended entitlement program that allows the State to be
funded at a specified percentage, Federal financial participation
(FFP), for eligible program costs.
State child
support agencies are required to conduct self-reviews of their programs.
The first round of self-assessments is required to be completed
by March 31, 1999 (42 USC 654.15).
Source of
Governing Requirements
The Child Support
Enforcement program is authorized under Title IV-D of the Social
Security Act, as amended, and is codified at 42 USC 651 through
669. Implementing program regulations are published at 45 CFR parts
301 through 307. In addition, with regard to eligibility and other
provisions, this program is closely related to programs authorized
under other titles of the Social Security Act, including the Temporary
Assistance to Needy Families (TANF) program (CFDA 93.558), the Medicaid
program (CFDA 93.778), and the Foster Care (Title IV-E) program
(CFDA 93.658).
As an HHS entitlement
program, the Child Support Enforcement program is subject to 45
CFR part 74 (in lieu of the HHS implementation of the A-102 Common
Rule), as specified in 45 CFR section 74.1(a)(3), and to Office
of Management and Budget Circular A-87 (as implemented in "Cost
Principles and Procedures for Developing Cost Allocation Plans and
Indirect Cost Rates for Agreements with the Federal Government,"
HHS Publication ASMB C-10, available on the Internet at http://www.hhs.gov/progorg/grantsnet/index2.htm).
This program is also subject to 45 CFR part 95.
States are
required to adopt and adhere to their own statutes and regulations
for program implementation, consistent with the requirements of
Title IV-D and the approved State plan.
III. COMPLIANCE
REQUIREMENTS
In developing
the audit procedures to test compliance with the requirements for
a Federal program, the auditor should look first to Part 2, Matrix
of Compliance Requirements, to identify which of the 14 types of
compliance requirements described in Part 3 are applicable and then
look to Parts 3 and 4 for the details of the requirements.
A. Activities
Allowed or Unallowed
1. Activities
Allowed
Consistent
with the approved Title IV-D plan, allowable activities include
the following. A more complete listing of allowable types of activities,
with examples, as appropriate, is included at 45 CFR sections 304.20
through 304.22.
a. Necessary
expenditures for support enforcement services and activities provided
to individuals from whom an assignment of support rights (as defined
in 45 CFR section 301.1) is obtained (45 CFR sections 304.20, 304.21,
and 304.22).
b. Parent locator
services for eligible individuals (45 CFR sections 304.20(a)(2),
304.20(b) and, 302.35(c)).
c. Paternity
and support services for eligible individuals (45 CFR section 304.20(a)(3)).
d. Administration
of the Child Support Enforcement program, including establishment
and administration of the State plan; establishment of agreements
with other State and local agencies and private providers; purchase
of equipment; and development of a cost allocation system and other
systems necessary for fiscal and program accountability (45 CFR
sections 304.20(b)(1) and 304.24).
e. The costs
of cooperative arrangements with appropriate courts and law enforcement
officials in accordance with the requirements of 45 CFR section
302.34, including associated administration and short-term training
of staff (45 CFR section 304.21(a)).
2. Activities
Unallowed
a. The following
costs and activities are unallowable pursuant to 45 CFR section
304.23:
(1) Activities
related to administering other titles of the Social Security Act.
(2) Construction
and major renovations.
(3) Education
and training programs other than those for Title IV-D agency staff
or as described in 45 CFR section 304.20(b)(2)(viii).
(4) Any expenditures
which have been reimbursed by fees collected.
(5) Any costs
of caseworkers (45 CFR section 303.20(e)).
(6) Medical
support enforcement activities performed under cooperative arrangements/agreements
(45 CFR sections 303.30 and 303.31).
(7) Any expenditures
related to carrying out an agreement under 45 CFR section 303.15.
(8) Any expenditures
for jailing of parents in child support enforcement cases.
(9) Costs of
counsel for indigent defendants in IV-D actions.
(10) Costs
of guardians ad litem in IV-D actions.
b. The following
costs associated with cooperative arrangements with courts and law
enforcement officials are unallowable: service of process and court
filing fees unless the court or law enforcement agency would normally
be required to pay the costs of such fees; costs of compensation
(salary and fringe benefits) of judges; costs of training and travel
related to the judicial determination process incurred by judges;
office-related costs, such as space, equipment, furnishings and
supplies incurred by judges; compensation (salary and fringe benefits),
travel and training, and office-related costs incurred by administrative
and support staffs of judges; and costs of cooperative agreements
that do not meet the requirements of 45 CFR section 303.107 (45
CFR section 304.21(b)).
E. Eligibility
1. Eligibility
for Individuals
Eligible recipients
are: (1) individuals applying for or receiving TANF benefits for
whom an assignment of child support rights has been made to the
State; (2) non-TANF Medicaid recipients; (3) former Aid to Families
with Dependent Children/TANF, Title IV-E, or Medicaid recipients
who continue to receive child support enforcement services without
filing an application; and (4) individuals needing such services
who have applied to a State child support enforcement agency (42
USC 608(a)(3); 45 CFR sections 302.32(a) and 302.33(a)).
2. Eligibility
for Groups of Individuals or Area of Service Delivery - Not
Applicable
3. Eligibility
for Subrecipients - Not Applicable
F. Equipment
and Real Property Management
Equipment that
is capitalized or depreciated or is claimed in the period acquired
and charged to more than one program is subject to 45 CFR section
95.707(b) in lieu of the requirements of the A-102 Common Rule (and
the HHS implementation at 45 CFR part 74) (45 CFR section 95.707(b)).
G. Matching,
Level of Effort, Earmarking
1. Matching
a. For program
costs other than laboratory costs related to determining
paternity, the Federal share of program costs, including those related
to the planning, design, development, installation and enhancement
of the Statewide computerized support enforcement system is 66 percent
(42 USC 655(a)(2)(C); 45 CFR sections 304.20(c) and 304.30).
b. The Federal
share of the costs of computerized support enforcement systems was
90 percent through Federal Fiscal Year 1997 which includes subsequent
costs under an approved Advanced Planning Document (42 USC 654(24);
45 CFR section 307.30).
c. The Federal
share of laboratory costs for determining paternity is 90 percent
(42 USC 655(a)(1)(C); 45 CFR sections 304.20(d) and 304.30).
2. Level
of Effort - Not Applicable
3. Earmarking
- Not Applicable
H. Period
of Availability of Federal Funds
This program
operates on a cash accounting basis and each year's funding and
accounting is discrete; i.e., there is no carry-forward of unobligated
funds. To be eligible for Federal funding, claims must be submitted
to ACF within 2 years after the calendar quarter in which the State
made the expenditure. This limitation does not apply to any claim
for an adjustment to prior year costs or resulting from a court-ordered
retroactive adjustment (45 CFR sections 95.7, 95.13, and 95.19).
L. Reporting
1. Financial
Reporting
a. SF-269,
Financial Status Report - Not Applicable
b. SF-270,
Request for Advance or Reimbursement - Not Applicable
c. SF-271,
Outlay Report and Request for Reimbursement for Construction
Programs - Not Applicable
d. SF-272,
Federal Cash Transactions Report - Payments under this program
are made by the HHS, Payment Management System (PMS). Reporting
equivalent to the SF-272 is accomplished through the PMS and is
evidenced by the PMS-272 series of reports.
e. OCSE 34A,
Child Support Enforcement Program Quarterly Report of Collections
(OMB No. 0970-0181).
f. OCSE 396A,
Child Support Enforcement Program Quarterly Report of Expenditures
and Estimates (OMB No. 0970-0181).
2. Performance
Reporting - Not Applicable
3. Special
Reporting - Not Applicable
N. Special
Tests and Provisions
1. Establishment
of Paternity and Support Obligations
Compliance
Requirement - The State IV-D agency must attempt to establish paternity
and a support obligation for children born out of wedlock. The State
IV-D agency must establish a support obligation when paternity is
not an issue. These services must be provided for any child in cases
referred to the IV-D agency or to individuals applying for services
under 45 CFR section 302.33 for whom paternity or a support obligation
had not been established (45 CFR sections 303.4 and 303.5). These
services must be provided within the time frames specified in 45
CFR sections 303.3(b)(3) and (b)(5), 303.3(c) and, 303.4(d).
Audit Objective
- Determine whether the State IV-D agency attempted to establish,
or established, paternity and a support obligation within the required
time frames.
Suggested
Audit Procedures
a. Review the
agency's procedures for tracking case referrals for the provision
of paternity and support obligation services and the type of documentation
maintained that these services were provided or attempted.
b. Test a sample
of cases referred to the agency during the audit period to ascertain
if:
(1) For cases
involving a child born out of wedlock, the agency established or
attempted to establish paternity.
(2) For all
cases:
(a) The agency
established or attempted to establish support obligation.
(b) Paternity
and support obligation services were provided within the required
time frame.
2. Enforcement
of Support Obligations
Compliance
Requirement - For all cases referred to the IV-D agency or applying
for services under 45 CFR section 302.33 in which an obligation
to support and the amount of the obligation has been established,
the agency must maintain a system for (1) monitoring compliance
with the support obligation; (2) identifying on the date the parent
fails to make payments in an amount equal to support payable for
one month, or an earlier date in accordance with State law, those
cases in which there is a failure to comply with the support obligation;
and (3) enforcing the obligation. To enforce the obligation the
agency must initiate income withholding, if required by and in accordance
with 45 CFR section 303.100, and initiate any other enforcement
action, unless service of process is necessary, within 30 calendar
days of identification of the delinquency or other support-related
noncompliance, or location of the absent parent, whichever occurs
later. If service of process is necessary, service must be completed
and enforcement action taken within 60 calendar days of identification
of the delinquency or other noncompliance, or the location of the
absent parent whichever occurs later. If service of process is unsuccessful,
unsuccessful attempts must be documented and meet the State's guidelines
defining diligent efforts. If enforcement attempts are unsuccessful,
the agency should determine when it would be appropriate to take
an enforcement action in the future and take it at that time (45
CFR section 303.6). Optional enforcement techniques available for
use by the State's are found at 45 CFR sections 303.71, 303.73,
and 303.104.
Audit Objectives
- Determine whether the State IV-D agency monitored and, when necessary,
enforced cases with support obligations within required time frames.
Suggested
Audit Procedures
a. Review the
agency's procedures for tracking case referrals and identifying
those cases where an obligation to support has been ordered and
the amount of the support obligation has been established.
b. Test a sample
of cases where an obligation to support had been ordered to ascertain
that the agency monitored such cases, and identified those cases
requiring enforcement within the required time frame.
c. For selected
cases identified as requiring enforcement, verify that enforcement
action was initiated within the required time frame. Ascertain if
a collection resulting from an enforcement action was received.
If so, no further audit procedures are necessary. If a collection
was not received:
(1) Ascertain
if use of income withholding was appropriate. If so, verify that
it was initiated within required time frame.
(2) If income
withholding was not appropriate and/or successful, ascertain if
the agency scheduled and took another enforcement action.
d. If a service
of process was necessary, but unsuccessful, verify that unsuccessful
attempts were documented and met the diligent effort standard under
the State's diligent effort definition.
3. Securing
and Enforcing Medical Support Obligations
Compliance
Requirement - The State IV-D agency must attempt to secure medical
support information, and establish and enforce medical support obligations
for all individuals eligible for services under 45 CFR section 302.33.
Specifically, the State IV-D agency must determine whether the custodial
parent and child have satisfactory health insurance other than Medicaid.
If not, the agency must petition the court or administrative authority
to include medical support in the form of health insurance coverage
in all new or modified orders for support. The agency is also required
to establish written criteria to identify cases not included above,
where there is a high potential for obtaining medical support based
on (1) available evidence that health insurance may be available
to the absent parent at reasonable cost, and (2) facts (as defined
by the State) which are sufficient to warrant modification of an
existing support order to include health insurance coverage for
a dependent child(ren). For cases meeting the established criteria,
the agency shall petition the court or administrative authority
to modify support orders to include medical support in the form
of health insurance coverage (45 CFR sections 303.31(b)(1)-(4)).
For non-TANF
cases, the agency shall petition for medical support when the eligible
individual is a Medicaid recipient or with consent of the individual
if not a Medicaid recipient (45 CFR section 303.31(c)).
In cases where
medical support is ordered, the agency is required to verify that
it was obtained. If it was not obtained, the agency should take
steps to enforce the health insurance coverage required by the support
order, unless it determines that health insurance was not available
to the absent parent at reasonable cost (45 CFR section 303.31(b)(7)).
The agency
shall inform the Medicaid agency when a new or modified order for
child support includes medical support and shall provide information
to the custodial parent concerning the health insurance policy secured
under any order (45 CFR sections 303.31(b)(5) and (6)).
Audit Objective
- Determine whether the State IV-D agency petitioned for and secured
or pursued enforcement of medical support in the form of health
insurance as part of support orders and informed the Medicaid agency
and custodial parent as required.
Suggested
Audit Procedures
a. Test a sample
of cases determined eligible during the audit period for services
under 45 CFR section 302.33 to ascertain if the agency determined
whether the custodial parent had satisfactory health insurance other
than Medicaid.
b. For those
selected cases where the custodial parent and child do not have
satisfactory health insurance other than Medicaid, verify that the
agency petitioned the court or administrative authority for health
insurance coverage when required.
c. For selected
cases where medical support was ordered, ascertain that the agency
verified that medical support was obtained by the absent parent.
If medical support was not obtained by the absent parent, ascertain
if the agency either made a determination that health insurance
was not available at a reasonable cost or took action to enforce
and obtain the medical support.
d. For selected
cases where the absent parent had health insurance or when health
insurance was obtained by the agency, ascertain if there is documentation
that the Medicaid agency and the custodial parent were informed.
4. Provision
of Child Support Services for Interstate Cases
Compliance
Requirement - The State IV-D agency must provide the appropriate
child support services needed for interstate cases (cases in which
the child and custodial parent live in one State and the responsible
relative lives in another State), establish an interstate central
registry responsible for receiving, distributing and responding
to inquiries on all incoming interstate IV-D cases, and meet required
time frames pertaining to provision of interstate services. The
case requiring action may be an initiating interstate case (a case
sent to another State to take action on the initiating State's behalf)
or a responding interstate case (a request by another State to provide
child support services or information only). Specific time frame
requirements for responding and initiating interstate cases are
at 45 CFR sections 303.7(a) and 303.7(b)(2), (4), (5) and (6), respectively
(45 CFR sections 302.36 and 303.7).
Audit Objective
- Determine whether the State IV-D agency provided required child
support services to interstate cases within the required time frames.
Suggested
Audit Procedures
a. Review the
agency's interstate central registry and ascertain the procedures
for receiving, distributing, and responding to all incoming interstate
claim cases.
b. Test a sample
of initiating interstate cases to verify that required information
was provided to the responding State within required time frames.
c. Test a sample
of responding interstate cases to verify that required child support
enforcement services were provided within the time frames for providing
information.
DEPARTMENT
OF HEALTH AND HUMAN SERVICES
CFDA 93.568
LOW-INCOME HOME ENERGY ASSISTANCE
I. PROGRAM
OBJECTIVES
The Low Income
Home Energy Assistance Program (LIHEAP) is a block grant program
in which States (including territories and Indian tribes) design
their own programs, within very broad Federal guidelines. There
are four components of LIHEAP: block grants, energy emergency contingency
funds, leveraging incentive awards, and the Residential Energy Assistance
Challenge Option Program (REACH). The objectives of LIHEAP are to
help low-income people meet the costs of home energy, defined as
heating and cooling of residences, and to increase their energy
self-sufficiency and reduce their vulnerability resulting from energy
needs. A primary purpose is meeting immediate home energy needs.
The target population is low income households, especially those
with the lowest incomes and the highest home energy costs or needs
in relation to income, taking into account family size. Additional
targets are low income households with members who are especially
vulnerable, including the elderly, persons with disabilities, and
young children.
II. PROGRAM
PROCEDURES
LIHEAP Block
Grants
The Department
of Health and Human Services (HHS), Administration for Children
and Families (ACF), Office of Community Services administers the
LIHEAP program at the Federal level. LIHEAP block grant funds are
distributed by formula to the States, the District of Columbia,
and territories. In addition, federally or State recognized Indian
tribes (including tribal consortiums and organizations designated
by them) have the option to request direct funding from ACF, rather
than being served by the State in which they are located. Tribes
that are directly funded by HHS receive a share of the funds that
would otherwise be allotted to the States in which they are located,
based on the number of eligible households in the tribal service
area as a percentage of the eligible households in the State, or
a larger amount agreed upon in a State/tribe agreement. Over half
the States agree to give the tribes in their State a larger amount
than required by the statute.
Each grantee
is required to submit a plan/application annually in order to receive
block grant funding. Grantees must allow for public participation
in the development of their annual plan. A separate application
is required for those LIHEAP grantees that wish to apply for leveraging
incentive awards or a REACH grant.
Energy Emergency
Contingency Funds
In addition
to appropriations for the LIHEAP block grant program, funds may
be awarded to meet the additional home energy assistance needs of
States for a natural disaster or other emergency. Contingency funds
that are awarded generally must be used under the normal statutory
and regulatory requirements that apply to the LIHEAP block grants,
unless special conditions are placed upon their use at the time
of the award.
Leveraging
Incentive Awards
Of the funds
appropriated for LIHEAP each year, HHS is required to earmark a
portion to reward those LIHEAP grantees that have acquired non-Federal
resources to help low income persons meet their home heating and
cooling needs, as an incentive to stretch the Federal dollars. This
could involve the grantee or private organizations putting some
of their own funds into LIHEAP or similar State or private programs,
buying fuel at reduced or discount prices through bulk purchases
or negotiated agreements, obtaining donations of weatherization
materials or fuels, waiving utility fees, or any number of other
activities. Awards in one year are based on leveraging activities
carried out during the previous year.
Residential
Energy Assistance Challenge Option Program
Up to 25 percent
of the funds earmarked for leveraging incentive awards each year
may be set aside for the REACH to make competitive grants to LIHEAP
grantees to help LIHEAP eligible households reduce their energy
vulnerability. The purposes of REACH are: (1) to minimize health
and safety risks that result from high energy burdens on low-income
households; (2) to prevent homelessness as a result of inability
to pay energy bills; (3) to increase efficiency of energy usage
by low income families; and (4) to target energy assistance to individuals
who are most in need. REACH grants are to be administered through
community-based organizations. REACH grants are subject to special
terms and conditions, which are specified in the grant awards.
Source of
Governing Requirements
The LIHEAP
program is authorized under Title XXVI of the Omnibus Budget Reconciliation
Act of 1981, as amended (Public Law 97-35, as amended, also known
as OBRA 1981), which is codified at 42 USC 8621-8629. Implementing
regulations for this and other block grant programs authorized by
OBRA 1981 are published at 45 CFR part 96. Those regulations include
general administrative requirements for the covered block grants
programs (in lieu of either 45 CFR parts 74 (OMB Circular A-110)
or 92 (A-102 Common Rule)). Requirements specific to LIHEAP are
in 45 CFR sections 96.80 through 96.89. In addition, grantees are
to administer their LIHEAP programs according to the plans which
they have submitted to HHS.
As discussed
in Appendix I of this Supplement, Federal Programs Excluded from
the A-102 Common Rule, States are to use the fiscal policies that
apply to their own funds in administering LIHEAP. Procedures must
be adequate to assure the proper disbursal of and accounting for
Federal funds paid to the grantee, including procedures for monitoring
the assistance provided (42 USC 8624(b)(10); 45 CFR section 96.30).
Under the block
grant philosophy, each State is responsible for designing and implementing
its own LIHEAP program, within very broad Federal guidelines. States
must administer their LIHEAP programs according to their approved
plan and any amendments and in conformance with the their own implementing
rules and policies.
Availability
of Other Program Information
The ACF LIHEAP
page on the Internet (http://www.acf.dhhs.gov/programs/liheap) provides
general information about this program.
III. COMPLIANCE
REQUIREMENTS
In developing
the audit procedures to test compliance with the requirements for
a Federal program, the auditor should first look to Part 2, Matrix
of Compliance Requirements, to identify which of the 14 types of
compliance requirements described in Part 3 are applicable and then
look to Parts 3 and 4 for the details of the requirements.
A. Activities
Allowed or Unallowed
The following
guidelines apply to LIHEAP block grants and leveraging incentive
award funds, unless noted otherwise. Energy emergency contingency
funds generally are subject to the LIHEAP block grant requirements,
but the contingency grant award letter should be reviewed to see
if different requirements apply. REACH grants are subject to special
rules described in the award.
1. LIHEAP funds
may be used to assist eligible households to meet the costs of home
energy, i.e., heating or cooling their residences (42 USC 8621(a)
and 8624(b)(1)).
2. LIHEAP funds
may be used to intervene in energy-related crisis situations, as
defined by the grantee (42 USC 8623(c) and 8624(b)(1)).
3. LIHEAP funds
may be used to conduct outreach activities (42 USC 8624(b)(1)).
4. Leveraging
incentive awards must be used to increase or maintain heating, cooling,
energy crisis, and weatherization benefits for low-income persons
(45 CFR section 96.87(j)).
5. Leveraging
incentive award funds may not be used for planning, developing,
or administering the LIHEAP program (45 CFR section 96.87(j)).
6. LIHEAP funds
may be used to provide low-cost residential weatherization and other
cost-effective energy-related home repair (42 USC 8624(b)(1)).
7. LIHEAP grantees
may use some or all of the rules applicable to the Department of
Energy's Low Income Weatherization Assistance Program (CFDA 81.042)
for their LIHEAP funds spent on weatherization (42 USC 8624(c)(1)(D)).
8. LIHEAP funds
may be used to provide services that encourage and enable households
to reduce their home energy needs and thereby the need for energy
assistance, including needs assessments, counseling, and assistance
with energy vendors (42 USC 8624 (b)(16)).
9. LIHEAP funds
(other than leveraging incentive award funds) may be used to identify,
develop, and demonstrate leveraging programs (45 CFR section 96.87(c)).
10. No LIHEAP
funds may be used for the purchase or improvement of land, or the
purchase, construction, or permanent improvement (other than low-cost
residential weatherization or other energy-related home repairs)
of any building or other facility (42 USC 8628).
B. Allowable
Costs/Cost Principles
As discussed
in Appendix I of this Supplement, Federal Programs Excluded from
the A-102 Common Rule, LIHEAP is exempt from the provisions of OMB
cost principles circulars. State cost principles requirements apply
to LIHEAP.
E. Eligibility
1. Eligibility
for Individuals
Grantees may
provide assistance to (1) households in which one or more individuals
are receiving Temporary Assistance for Needy Families (TANF), Supplemental
Security Income (SSI), Food Stamps, or certain needs-tested veterans
benefits; or (2) households with incomes which do not exceed the
greater of 150 percent of the State's established poverty level,
or 60 percent of the State median income. Grantees may establish
lower income eligibility criteria, but no household may be excluded
solely on the basis of income if the household income is less than
110 percent of the State's poverty level. Grantees may give priority
to those households with the highest home energy costs or needs
in relation to income (42 USC 8624(b)(2)).
2. Eligibility
for Groups of Individuals or Area of Service Delivery- Not Applicable
3. Eligibility
for Subrecipients
To the extent
it is necessary to designate local administrative agencies, the
grantee is to give special consideration to local public or private
nonprofit agencies (or their successor agencies) which were receiving
energy assistance or weatherization funds under the Economic Opportunity
Act of 1964 or other laws, provided that the grantee finds that
they meet program and fiscal requirements set by the grantee (42
USC 8624(b)(6)).
G. Matching,
Level of Effort, Earmarking
1. Matching
- Not Applicable
2. Level
of Effort - Not Applicable
3. Earmarking
The following
limitations apply to LIHEAP block grants and leveraging incentive
award funds, as noted. Energy emergency contingency funds generally
are subject to the requirements applicable to LIHEAP block grant
funds, but the contingency grant award letter should be reviewed
to see if different requirements were applied. REACH grants are
subject to special rules described in the award.
a. Planning
and Administrative Costs
(1) No more
than 10 percent of the LIHEAP funds payable to the State for a Federal
fiscal year may be used for planning and administrative costs, including
both direct and indirect costs. This limitation applies, in the
aggregate, to planning and administrative costs at both the State
and subrecipient levels (42 USC 8624(b)(9)(A); 45 CFR section 96.88(a)).
(2) A tribal
or territorial grantee may spend up to 20 percent of the first $20,000
and 10 percent of the amount above $20,000 for administration and
planning (45 CFR section 96.88(b)).
(3) Leveraging
incentive award funds may not be used for planning and administrative
costs. However, either in the award year or the following fiscal
year, they may be added to the base on which the maximum amount
allowed for planning and administration is calculated (45 CFR section
96.87(j)).
b. Weatherization
(1) No more
than 15 percent of the greater of the funds allotted or the funds
available to the grantee for a Federal fiscal year may be used for
low-cost residential weatherization or other energy-related home
repairs. The Secretary may grant a waiver, and the grantee may then
spend up to 25 percent for residential weatherization or energy-related
home repairs (42 USC 8624(k)).
(2) Leveraging
incentive award funds may be used for weatherization without regard
to the weatherization maximum in the statute. However, they cannot
be added to the base on which the weatherization maximum is calculated
(45 CFR section 96.87(j)).
c. Energy
Need Reduction Services - No more than 5 percent of the LIHEAP
funds payable to the grantee may be used to provide services that
encourage and enable households to reduce their home energy needs
and thereby the need for energy assistance. Such services may include
needs assessments, counseling, and assistance with energy vendors
(42 USC 8624(b)(16)).
d. Identifying
and Developing Leveraging Programs
(1) The greater
of 0.08 percent of a State's LIHEAP funds (other than leveraging
incentive award funds) or $35,000 may be spent to identify, develop,
and demonstrate leveraging programs, without regard to the limit
on planning and administering LIHEAP (42 USC 8626a(c)(2); 45 CFR
section 96.87(c)(2)).
(2) Indian
tribes/tribal organizations and territories may spend up to the
greater of 2 percent or $100 on such activities (45 CFR section
96.87(c)(1)).
H. Period
of Availability of Federal Funds
At least 90
percent of the LIHEAP block grant funds payable to the grantee must
be obligated in the fiscal year in which they are appropriated.
Up to 10 percent of the funds payable may be held available (or
"carried over") for obligation no later than the end of the following
fiscal year. Funds not obligated by the end of the following fiscal
year must be returned to ACF. There are no limits on the time period
for expenditure of funds (42 USC 8626).
Leveraging
incentive award funds must be obligated in the year in which they
are awarded or the following fiscal year, without regard to the
carryover limit. However, they may not be added to the base on which
the carryover limit is calculated (45 CFR sections 96.87(j)(1) and
(k)). Funds not obligated within these time periods must be returned
to ACF (45 CFR section 96.87(k)).
LIHEAP emergency
contingency funds are generally subject to the same obligation and
expenditure requirements applicable to the LIHEAP block grant funds,
but the contingency award letter should be reviewed to see if different
requirements were imposed.
L. Reporting
1. Financial
Reporting - Not Applicable
2. Performance
Reporting - Not Applicable
3. Special
Reporting
a. LIHEAP
Carryover and Reallotment Report (OMB No. 0970-0106)
- Grantees must submit a report no later then August 1 indicating
the amount expected to be carried forward for obligation in the
following fiscal year and the planned use of those funds. Funds
in excess of the maximum carryover limit are subject to reallotment
to other LIHEAP grantees in the following fiscal year, and must
also be reported (42 USC 8626).
b. Annual
Report on Households Assisted by LIHEAP (OMB No. 0970-0060)
- As part of the application for block grant funds each year,
a report is required for the preceding fiscal year of (1) the number
and income levels of the households assisted for each component
(heating, cooling, crisis, weatherization), (2) the number of households
served that contained young children, elderly, or persons with disabilities,
and (3) the number and income levels of households applying for
assistance. Territories with annual allowments of less than $200,000
and Indian tribes are required to report only on the number of households
served for each component (42 USC 8629; 45 CFR section 96.82).
IV. OTHER
INFORMATION
As described
in Part 4, Social Services Block Grant (SSBG) program (CFDA 93.667),
Subpart III.A. Activities Allowed or Unallowed, a State may transfer
up to 10 percent of its annual allotment under SSBG to this and
six other block grant programs.
Amounts transferred
into this program are subject to the requirements of this program
when expended and should be included in the audit universe and total
expenditures of this program when determining Type A programs. On
the Schedule of Expenditures of Federal Awards, the amounts transferred
in should be shown as expenditures of this program when such amounts
are expended.
DEPARTMENT
OF HEALTH AND HUMAN SERVICES
CFDA 93.569
COMMUNITY SERVICES BLOCK GRANT
I. PROGRAM
OBJECTIVES
The objective
of the Community Services Block Grant (CSBG) program is to provide
funds to States, territories, and Indian tribes and tribal organizations
(tribes) for community-based programs that assist in ameliorating
the causes and consequences of poverty. These programs may include
a range of social and emergency services to assist low-income individuals
and families, including the elderly and the homeless.
II. PROGRAM
PROCEDURES
Administration
and Services
The CSBG program
is administered by the Office of Community Services, Administration
for Children and Families (ACF), a component of the Department of
Health and Human Services (HHS). CSBG funds are awarded to States,
territories, and tribes in accordance with a pre-established formula
after submission and approval of their applications by ACF. The
State, territorial, or tribal recipient is responsible for overall
program administration but services are carried out by local non-profit
agencies that are funded according to a State-wide formula.
Source of
Governing Requirements
The CSBG program
is authorized under the Omnibus Budget and Reconciliation Act (OBRA)
of 1981 (Public Law 97-35), as amended, and is codified at 42 USC
9901-9912. The implementing regulations for this and other block
grant programs authorized by OBRA 1981 are published at 45 CFR part
96. Those regulations include both specific requirements and general
administrative requirements for the covered block grant programs
(in lieu of either 45 CFR part 74 (OMB Circular A-110) or part 92
(A-102 Common Rule)). Requirements specific to CSBG are in 45 CFR
sections 96.90 through 96.92.
As discussed
in Appendix I of this Supplement, Federal Programs Excluded from
the A-102 Common Rule, States are to use the fiscal policies that
apply to their own funds in administering CSBG. Procedures must
be adequate to assure the proper disbursal of and accounting for
Federal funds paid to the grantee, including procedures for monitoring
the assistance provided (45 CFR section 96.30).
Under the block
grant philosophy, each State is responsible for designing and implementing
its own CSBG program, within very broad Federal guidelines. States
must administer their CSBG program according to their approved plan
and any amendments and in conformance with the States own implementing
rules and policies.
III. COMPLIANCE
REQUIREMENTS
In developing
the audit procedures to test compliance with the requirements for
a Federal program, the auditor should look first to Part 2, Matrix
of Compliance Requirements, to identify which of the 14 types of
compliance requirements described in Part 3 are applicable and then
look to Parts 3 and 4 for the details of the requirements.
A. Activities
Allowed or Unallowed
1. Funds may
be used to (1) provide a range of services and activities having
a measurable and potentially major impact on causes of poverty in
a community; (2) provide activities designed to assist low-income
individuals or families (including the homeless, migrants and the
elderly poor) to secure and retain employment, attain an adequate
education, make better use of available income, obtain and maintain
adequate housing and a suitable living environment, obtain emergency
assistance through grants or loans, meet urgent needs, achieve self-sufficiency
and promote greater participation in community affairs, and make
more effective of other programs related to the purpose of CSBG;
(3) provide or arrange for the provision of emergency supplies,
services and foodstuffs to counteract conditions of starvation and
malnutrition among the poor; (4) to coordinate and establish linkages
between governmental and other social services programs to ensure
effective delivery of services to low-income persons; and (5) encourage
use of private-sector entities in the community to ameliorate poverty
(42 USC 9904(c)(1)).
2. Funds may
be used for training and technical assistance; to support State-wide
coordination and communication among eligible entities; to better
target the distribution of funds to the areas of greatest need;
and to coordinate State-operated programs and services targeted
to low-income children and families (42 USC 9904(c)(2)(B)).
3. Funds may
not be used to purchase or improve land or to purchase, construct,
or permanently improve buildings or facilities, other than low-cost
residential weatherization or other energy related home repairs
(this limitation may be waived by ACF) (42 USC 9909).
4. Funds may
not be used to support any partisan or non-partisan political activity
or to provide voters or prospective voters with transportation to
the polls or provide similar assistance in connection with an election
or any voter registration (42 USC 9904(c)(6) and (7)).
B. Allowable
Costs/Cost Principles
As discussed
in Appendix I of this Supplement, Federal Programs Excluded from
the A-102 Common Rule, CSBG is exempt from the provisions of OMB
cost principles circulars. State cost principles requirements apply
to CSBG at the State level. However, OMB administrative requirements
and cost principles circulars do apply to subrecipients (42 USC
9904(c)(14)).
E. Eligibility
1. Eligibility
for Individuals
The official
poverty guideline as revised annually by HHS shall be used to determine
eligibility. The poverty guidelines are issued each year in the
Federal Register, and HHS maintains a page on the Internet which
provides the poverty guidelines (http://aspe.os.dhhs.gov/poverty/poverty.htm).
The State may adopt a revised poverty guideline but it may not exceed
125 percent of the HHS-determined poverty guideline (42 USC 9902(2)).
2. Eligibility
for Groups of Individuals or Area of Service Delivery - Not
Applicable
3. Eligibility
for Subrecipients
Subgrants may
be made to the following entities:
a. Existing
community action agencies officially designated under the provisions
of Section 210 of the Economic Opportunity Act of 1964, or which
came into existence during fiscal year 1982 as a direct successor-in-interest
to such an agency, and meeting all the governing board requirements
specified in 42 USC 9904(c)(3); or limited purpose agencies receiving
Section 221 funds under the Economic Opportunity Act of 1964 and
which serve the general purposes of a community action agency (42
USC 9902(1)).
b. Non-profit
organizations serving seasonal or migrant farmworkers (42 USC 9904(c)(2)(A)).
c. Other non-profit
organizations with a governing board meeting the requirements of
42 USC 9904(c)(3) (42 USC 9902(1)).
G. Matching,
Level of Effort, Earmarking
1. Matching
- Not Applicable
2. Level
of Effort - Not Applicable
3. Earmarking
a. The grantee
must use at least 90 percent of the allotted funds for subgrants
(42 USC 9904(c)(2)).
b. The State's
administrative expenses, including monitoring activities, may not
exceed the greater of $55,000 or five (5) percent of the State's
allotment (42 USC 9904(c)(2)(B)(iv)).
H. Period
of Availability of Federal Funds
Funds available
to States from their allotment for any fiscal year shall be expended
by the grantee in that fiscal year or in the succeeding fiscal year
(42 USC 9907(b)). Similarly, funds distributed by the State to subgrantees
are also available to the subgrantee for expenditure in the year
in which provided or in the following fiscal year (Public Law 104-134,
April 26, 1996, 110 Stat. 1321-226)).
IV. OTHER
INFORMATION
As described
in Part 4, Social Services Block Grant (SSBG) program (CFDA 93.667),
Subpart III.A. Activities Allowed or Unallowed, a State may transfer
up to 10 percent of its annual allotment under SSBG to this and
six other block grant programs for support of health services, health
promotion and disease prevention activities, low-income home energy
assistance, or any combination of these activities.
Amounts transferred
into this program are subject to the requirements of this program
when expended and should be included in the audit universe and total
expenditures of this program when determining Type A programs. On
the Schedule of Expenditures of Federal Awards, the amounts transferred
in should be shown as expenditures of this program when such amounts
are expended.
DEPARTMENT
OF HEALTH AND HUMAN SERVICES
CFDA 93.575
CHILD CARE AND DEVELOPMENT BLOCK GRANT
CFDA 93.596
CHILD CARE MANDATORY AND MATCHING FUNDS OF THE CHILD CARE AND DEVELOPMENT
FUND
I. PROGRAM
OBJECTIVES
The Child Care
and Development Fund (CCDF) provides funds to States (including
territories and Indian tribes) to increase the availability, affordability,
and quality of child care services for low-income families where
the parents are working or attending training or educational programs.
The CCDF consolidates the Child Care and Development Block Grant
and funding formerly provided to States through the child care programs
under Title IV-A of the Social Security Act .
II. PROGRAM
PROCEDURES
The Personal
Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA)
repealed the child care programs under Title IV-A of the Social
Security Act, i.e., Aid to Families with Dependent Children Child
Care, Transitional Child Care and At-Risk Child Care, and required
that all Federal child care funds be spent in accordance with the
provisions of the amended Child Care and Development Block Grant
program. While these Federal child care programs have been consolidated
under a single set of eligibility requirements, there are three
distinct funding sources. The three sources are the Discretionary
Fund (CFDA 93.575), Mandatory Fund (CFDA 93.596), and the Matching
Fund (CFDA 93.596). Additionally, under the Temporary Assistance
for Needy Families (TANF) program (CFDA 93.558), a State may transfer
TANF funds to CCDF and the funds transferred in are treated as Discretionary
Funds (42 USC 606(d); 45 CFR section 98.54(a)).
Administration
and Services
The Child Care
Bureau of the Administration for Children and Families (ACF), a
component of the Department of Health and Human Services (HHS),
administers the CCDF. To receive funds a State, territory or Indian
tribe must submit a plan containing specific information and assurances.
The plan serves as the application for funding for States and territories
and is effective for a 2-year period. Tribes, in contrast, must
submit a yearly application as well as a tribal plan. A tribe's
plan is also effective for 2 years. Tribes are generally subject
to the same program requirements as States and territories, except
as specifically noted below.
Following ACF
approval of the plan (and application, in the case of tribes), funds
are awarded based on statutory/regulatory formulas. State awards
are not adjusted by separate direct Federal funding of counterpart
tribal programs within the State. As long as statutory and regulatory
requirements are met (e.g., that the States, territories and those
tribes receiving grants over $500,000 offer parents certificates
for the purchase of child care services), grantees have broad flexibility
in designing programs and offering services. For example, CCDF funds
may be used in collaborative efforts with Head Start (CFDA 93.600)
programs to provide comprehensive child care and development services
for children who are eligible for both programs.
Source of
Governing Requirements
The Discretionary
Fund (CFDA 93.575) is authorized by the Child Care and Development
Block Grant Act of 1990, as amended by Title VI of the PRWORA of
1996 (Public Law 104-193; 42 USC 9858 - 9858q). The Mandatory and
Matching Funds (CFDA 93.596) are authorized under section 418 of
Title IV-A of the Social Security Act as amended by PRWORA (42 USC
618). The CCDF (i.e., all three funds) is subject to the implementing
regulations at 45 CFR parts 98 and 99.
Transition
considerations
Certain of
the PRWORA provisions created new or changed requirements that negated
or made obsolete some portions of the August 1992 version of 45
CFR parts 98 and 99. To the extent that a State, territory or tribe
adopted such provisions following PRWORA enactment (August 22, 1996),
and prior to the publication of the revised regulations for CCDF
(July 24, 1998), the language of the statute and, if appropriate,
the State's reasonable interpretation of the statutory language
applies rather than the requirements of the earlier regulations.
For example, PRWORA raised the upper eligibility limit that States
may establish for families from 75 percent to 85 percent of State
median income, which is a change from the 1992 regulations. Since
this statutory change is clear, it should be controlling. In contrast,
PRWORA also provides that "activities designed to provide comprehensive
consumer education to parents and the public" is an allowable expense,
but does not define what those activities might be. The State's
reasonable interpretation may be accepted.
Availability
of Other Program Information
The HHS Administration
for Children and Families, Child Care Bureau Internet page titled
"Welcome to the Child Care Bureau" (http://www.acf.dhhs.gov/programs/ccb/policy)
provides general information on this program.
III. COMPLIANCE
REQUIREMENTS
In developing
the audit procedures to test compliance with the requirements for
a Federal program, the auditor should first look to Part 2, Matrix
of Compliance Requirements, to identify which of the 14 types of
compliance requirements described in Part 3 are applicable and then
look to Parts 3 and 4 for the details of the requirements.
A. Activities
Allowed or Unallowed
1. Funds may
be used for child care services in the form of certificates, grants
or contracts (42 USC 9858c(c)(2)(A)).
2. Funds may
be used for activities that improve the quality or availability
of child care services, consumer education and parental choice (42
USC 9858e).
3. Funds may
be used for any other activity that the State deems appropriate
to promoting parental choice, providing comprehensive consumer education
information to help parents and the public make informed choices
about child care, providing child care to parents trying to achieve
independence from public assistance, and implementing the health,
safety, licensing and registration standards established in State
regulations (42 USC 9858c(c)(3)(B)).
4. No funds
may be expended through any grant or contract for child care services
for any sectarian purpose or activity, including sectarian worship
or instruction (42 USC 9858k(a)).
5. With regard
to services to students enrolled in grades 1 through 12, no funds
may be used for services provided during the regular school day,
for any services for which the students receive academic credit
toward graduation, or for any instructional services which supplant
or duplicate the academic program of any public or private school
(42 USC 9858k(b)).
6. Except for
tribes, no funds can be used for the purchase or improvement of
land, or for the purchase, construction, or permanent improvement
(other than minor remodeling) of any building or facility (42 USC
9858d(b)).
Tribes may
use funds for the construction and major renovation of child care
facilities with ACF approval (42 USC 9858m(c)(6); 45 CFR section
98.84).
7. Except for
sectarian organizations, funds may be used for the minor remodeling
(i.e., renovation and repair) of child care facilities. For sectarian
organizations, funds may be used for the renovation or repair of
facilities only to the extent that it is necessary to bring the
facility into compliance with the health and safety standards required
by 42 USC 9858c(c)(2)(F) (42 USC 9858d(b)).
C. Cash
Management
Under the Matching
Fund's (CFDA 93.596) Maintenance of Effort (MOE) requirement, the
drawdown of Federal cash should not exceed the federally funded
portion of the combination of the Mandatory and Matching Funds (CFDA
93.596), taking into account the State MOE and State matching requirements.
For example, the total expenditures for a year, i.e., the sum of:
1) the Mandatory Fund (CFDA 93.596), comprised of Federal funds
only, 2) the State MOE requirement, and 3) the entire Matching Fund
-- both State and Federal shares -- for a fiscal year is $100. Of
this $100, the sum of the State MOE and the State share of the Matching
Fund is $40. For any period, the amount of Federal funds drawn down
should not exceed 60 percent of the total expenditures for that
period (Department of the Treasury, Financial Management Service
CMIA Policy Statement Number 19).
E. Eligibility
1. Eligibility
for Individuals
The approved
plan provides the specific eligibility requirements selected by
each State/territory/tribe. Those requirements must comply with
the following Federal requirements for individual eligibility:
a. Children
must be under age 13 (or up to age 19, if incapable of self care
or under court supervision), who reside with a family whose income
does not exceed 85 percent of State/territorial/tribal median income
for a family of the same size, and reside with a parent (or parents)
who is working or attending a job-training or education program;
or are in need of, or are receiving, protective services (42 USC
9858n(4); 45 CFR section 98.20(a)).
b. The award
of CCDF funds to an Indian tribe shall not affect the eligibility
of any Indian child to receive CCDF services in the state or States
in which the tribe is located (45 CFR section 98.80(d)).
2. Eligibility
for Groups of Individuals or Area of Service Delivery - Not
Applicable
3. Eligibility
for Subrecipients - Not Applicable
G. Matching,
Level of Effort, Earmarking
The matching
and MOE requirements apply only to the Matching Fund (CFDA 93.596).
The State's matching and MOE expenditures are closely related. For
a State to receive the allotted share of the Matching Fund, the
State must meet the MOE requirement and obligate the Mandatory Fund
by year end (see H. Period of Availability of Funds). The matching
and MOE amounts are reported on the CCDF Financial Report (ACF-696)
(See L.1. Financial Reporting).
1. Matching
a. A State
is eligible for Federal matching funds (limit specified in 42 USC
618 and 45 CFR section 98.63) only for those allowable State expenditures
which exceed the State's MOE requirement, provided all of the Mandatory
Funds (CFDA 93.596) allocated to the State are also obligated by
the end of the fiscal year (45 CFR section 98.53).
b. State expenditures
will be matched at the Federal Medical Assistance Percentage (FMAP)
rate for the applicable fiscal year. This percentage varies by State
and is available on the Internet at http://www.hcfa.gov/medicaid/ofs%2Dffp.htm.
To be eligible an activity must be allowable and be described in
the approved State plan (45 CFR section 98.53).
c. Private
or public donated funds may be counted as State expenditures for
this purpose subject to the limitations in 45 CFR section 98.53.
d. No more
than 20 percent of State matching claims may be for pre-Kindergarten
services. The same expenditure may not be used for both MOE and
matching purposes (45 CFR sections 98.53(d) and 98.53(h)).
2.1 Level
of Effort - Maintenance of Effort
If a State
requests Matching Funds (CFDA 93.596), State MOE (non-Federal) funds
for child care activities must be expended in the year for which
Matching Funds are claimed in an amount that is at least equal to
the State's share of expenditures for fiscal year 1994 or 1995 (whichever
is greater) under former Sections 402(g) and (i) of the Social Security
Act (42 USC 618). Private or public donated funds may be counted
as State expenditures for this purpose (45 CFR section 98.53).
No more than
20 percent of the MOE requirement may be met with State expenditures
for pre-kindergarten services. The same expenditure may not be used
for both MOE and matching purposes (45 CFR sections 98.53(d) and
98.53(h)).
2.2 Level
of Effort - Supplement Not Supplant - Not Applicable
3. Earmarking
a. Administrative
Earmark - A State/territory may not spend on administrative
costs more than 5 percent of total CCDF awards expended (i.e., the
total of CFDA 93.575 and 93.596) and any State expenditures for
which Matching Funds (CFDA 93.596) are claimed (42 USC 9858c(c)(3)(C);
45 CFR section 98.52).
Tribes are
allowed 15 percent of the amount expended under CFDA 93.575 and
93.596 for administrative costs. Tribes with at least 50 children
under age 13 are provided a base amount of $20,000 which may be
expended for any purpose consistent with the purpose and requirements
of the CCDF. Tribes with fewer than 50 children who are members
of a consortium receive a pro rata amount of the $20,000 in proportion
to the number of children under age 13 in relation to 50. The base
amount is not included in the amount against which the administrative
earmark is calculated (45 CFR sections 98.61(c), 98.83(e), and 98.83(g)).
The following
activities are not considered administrative costs (63 FR 39962):
- Eligibility
determination and redetermination.
- Preparation
and participation in judicial hearings.
- Child care
placement.
- Recruitment,
licensing, inspection, review and supervision of child care placements.
- Rate setting.
- Resource
and referral services.
- Training
of child care staff.
- Establishment
and maintenance of computerized child care information systems.
- Establishing
and operating a certificate program
b. Quality
Earmark - States and territories must spend on quality and availability
activities, as provided for in the State/territorial plan, at least
four percent of CCDF funds expended (i.e., the total of CFDA 93.575
and 93.596 funds) and any State expenditures for which Matching
Funds (CFDA 93.596) are claimed (45 CFR section 98.51).
Only those
tribes receiving grants over $500,000 must spend at least four percent
of CCDF funds expended on quality activities as described in the
tribal plan/application. The $20,000 base amount is not included
in the amount against which the quality earmark is calculated (45
CFR sections 98.51(a), 98.83(e), and 98.83(f)).
c. Specific
Earmark - Congress may also specifically earmark funds for certain
purposes. For example, in the fiscal year (FY) 1998 HHS appropriation,
Congress specified two earmarksCone for resource and referral and
school-aged activities, and the second for activities to increase
the supply of quality child care for infants and toddlers. When
there is such an earmark, a separate award accompanied by specific
terms and conditions is issued for those earmarked funds.
H. Period
of Availability of Federal Funds
1. Discretionary
Funds (CFDA 93.575) must be obligated by the end of the succeeding
fiscal year after award, and expended by the end of the third fiscal
year after award (42 USC 9858h(c); 45 CFR section 98.60).
2. Mandatory
Funds (CFDA 93.596) for States must be obligated by the end of the
fiscal year in which they are awarded if the State also requests
Matching Funds (CFDA 93.596). If no Matching Funds are requested
for the fiscal year, then the Mandatory Funds (CFDA 93.596) are
available until expended (45 CFR section 98.60(d)).
3. Mandatory
Funds (CFDA 93.596) for tribes must be obligated by the end of the
succeeding fiscal year after award, and expended by the end of the
third fiscal year after award (45 CFR section 98.60(e)).
4. Matching
Funds (CFDA 93.596) must be obligated by the end of the fiscal year
in which they are awarded, and expended by the end of the succeeding
fiscal year after award (45 CFR section 98.60(d)).
For example,
availability periods for FY 1998 funds awarded on any date in FY
1998 (October 1, 1997 through September 30, 1998):
If
Source of
Obligation Is--
|
Obligation
must Be
Made by End of --
|
Obligation
must Be
Liquidated by End of --
|
Discretionary*
(CFDA 93.575)
|
FY 1999
(i.e., by 9/30/99)
|
FY 2000
(i.e., by 9/30/00)
|
Mandatory
(State)
(CFDA 93.596)
|
FY 1998
(i.e., by 9/30/98 but ONLY if Matching Funds are used)
|
No requirement
for
liquidation by a specific date
|
Mandatory
(Tribes)
(CFDA 93.596)
|
FY 1999
(i.e., by 9/30/99)
|
FY 2000
(i.e., by 9/30/00)
|
Matching
(CFDA 93.596)
|
FY 1998
(i.e., by 9/30/98)
|
FY 1999
(i.e., by 9/30/99)
|
*
TANF funds (CFDA 93.558) transferred to the CCDF during a fiscal
year are treated as Discretionary Funds of the year they are transferred
for purposes of the period of availability (45 CFR section 98.54(a)(1)).
L. Reporting
1. Financial
Reporting
a. SF-269,
Financial Status Report - Not applicable for States or territories,
but applies to tribes.
b. SF-270,
Request for Advance or Reimbursement - Not Applicable
c. SF-271,
Outlay Report and Request from Reimbursement for Construction Programs
- Not Applicable
d. SF-272,
Federal Cash Transactions Report - Payments under this program
are made by HHS, Payment Management System (PMS). Reporting equivalent
to the SF-272 is accomplished through the PMS and is evidenced by
the PMS 272 series of reports.
e. Child
Care and Development Fund Financial Report (ACF-696) (OMB
No 0970-0163) is due quarterly from recipient's other than tribes,
in lieu of the SF-269, Financial Status Report. Each fiscal
year's expenditure report must be separate, therefore, multiple
reports may be required if the State spends awards from more than
one fiscal year in a given quarter. Any funds transferred from TANF
are treated as Discretionary Funds for reporting on the ACF-696
(42 USC 604(d); 45 CFR section 98.54(a)).
2. Performance
Reporting - Not Applicable
3. Special
Reporting - Not Applicable
IV. OTHER
INFORMATION
Under the TANF
program (CFDA 93.558), a State may transfer TANF funds to CCDF and
the funds transferred are treated as Discretionary Funds under CCDF
(42 USC 604(d); 45 CFR section 98.54(a)). The amounts transferred
into CCDF should be included in the audit universe and in total
expenditures of CCDF when determining Type A programs. On the Schedule
of Expenditures of Federal Awards, the amount transferred in should
be shown as CCDF expenditures when expended.
Also, as described
in Part 4, Social Services Block Grant (SSBG) program (CFDA 93.667),
Subpart III.A. Activities Allowed or Unallowed, a State may transfer
up to 10 percent of its annual allotment under SSBG to this and
six other block grant programs for support of health services, health
promotion and disease prevention activities, low-income home energy
assistance, or any combination of these activities.
Amounts transferred
into this program from SSBG are subject to the requirements of this
program when expended and should be included in the audit universe
and total expenditures of this program when determining Type A programs.
On the Schedule of Expenditures of Federal Awards, the amounts transferred
in should be shown as expenditures of this program when such amounts
are expended.
DEPARTMENT
OF HEALTH AND HUMAN SERVICES
CFDA 93.600
HEAD START
I. PROGRAM
OBJECTIVES
The objectives
of the Head Start and Early Head Start programs are to provide comprehensive
health, educational, nutritional, social and other developmental
services primarily to economically disadvantaged preschool children
(ages 3 to 5) and infants and toddlers (birth through age 3) so
that the children will attain overall social competence. Parents
receive social services and participate in various decision-making
processes related to the operation of the program.
II. PROGRAM
PROCEDURES
Head Start
Services
The Head Start
program provides services in the following areas:
Early Childhood
Development and Health - Head Start's educational program is
designed to meet the needs of each child, the community served,
and its ethnic and cultural characteristics. Every child receives
a variety of learning experiences to foster intellectual, social,
and emotional growth. Head Start also emphasizes the importance
of the early identification of health problems. Every child is involved
in a comprehensive health program, which includes immunizations,
medical, dental, mental health, and nutritional services.
Family and
Community Partnerships - An essential part of the Head Start
program is the involvement of parents in parent education, program
planning, and operating activities. Many parents serve as members
of policy councils and committees and have a voice in administrative
and managerial decisions. Participation in classes and workshops
on child development and staff visits to the home allow parents
to learn about the needs of their children and about educational
activities that can take place at home. Specific services are geared
to each family after its needs are determined. They include community
outreach; referrals; family need assessments; recruitment and enrollment
of children; and emergency assistance or crisis intervention.
Early Head
Start
The 1994 Head
Start Reauthorization (Public Law 103-252) established a new program
for low-income pregnant women and families with infants and toddlers.
The purpose
of this program is to enhance children's physical, social, emotional
and cognitive development; enable parents to be better caregivers
of and teachers to their children; and
help parents
meet their own goals, including that of economic independence.
Administration
and Services
Head Start
programs operate in all 50 States, the District of Columbia, Puerto
Rico, and the U.S. territories. Head Start grants are awarded for
an indefinite project period, with an annual budget period which
is specific to each grantee. Grants are awarded to public, non-profit,
and for-profit organizations directly by the Administration for
Children and Families (ACF) in the ten Department of Health and
Human Service (HHS) Regional Offices and in Washington, DC.
Early Head
Start grantees include Head Start grantees, school systems, universities,
colleges, and other public and private entities. Grants are for
a 5-year project period. In all other respects, Early Head Start
grants are subject to the same program performance standards and
compliance requirements as Head Start grants; therefore, references
to Head Start apply to both.
Grantees may
also subgrant some or all of its operational responsibilities for
a Head Start/Early Head Start grant to a "delegate agency." Delegate
agencies (subrecipients) may be public, non-profit, or for-profit
organizations.
Grantees may
collaborate with other entities carrying out early childhood education
and child care programs in the community, including the Child Care
and Development Fund (93.575, 93.596) and Temporary Assistance to
Needy Families (93.558).
Source of
Governing Requirements
Head Start
began in 1965 under the Office of Economic Opportunity and is now
administered by the ACF, HHS. These programs are currently authorized
under the Head Start Act (Title VI, Subtitle A, Chapter 8, Subchapter
B of Public Law 97-35), as amended, which is codified at 42 USC
9831- 9843a. The implementing program regulations are 45 CFR parts
1301 through 1308.
Availability
of Other Program Information
HHS Head Start
Bureau home page on the Internet (http://www.acf.dhhs.gov/programs/hsb)
provides general information about this program.
III. COMPLIANCE
REQUIREMENTS
In developing
the audit procedures to test compliance with the requirements for
a Federal program, the auditor should first look to Part 2, Matrix
of Compliance Requirements, to identify which of the 14 types of
compliance requirements described in Part 3 are applicable and then
look to Parts 3 and 4 for the details of the requirements.
A. Activities
Allowed Or Unallowed
1. Allowable
services include, but are not limited to, health (medical, dental,
nutrition, and mental health); education; social services; transportation;
parent involvement; use of volunteers; career development for teachers,
nonprofessional aides and other staff members; and special services
for parents (e.g., literacy) (45 CFR part 1304, subparts B, C, and
D).
2. Grant funds
may, with specific ACF approval, be used for capital expenditures
(including paying the cost of amortizing the principal, and paying
interest on, loans) such as construction of new facilities, purchase
of new or existing facilities, major renovations on existing facilities,
and purchase of vehicles used for programs conducted at the Head
Start facilities (42 USC 9839 (f) and (g)).
B. Allowable
Costs/Cost Principles
Indirect costs
attribute to common or joint use of facilities or services must
be fairly allocated among the various programs which utilize such
services (42 USC 9839(c); 45 CFR section 1301.32).
G. Matching,
Level of Effort, Earmarking Requirements
1. Matching
Grantees are
required to contribute at least 20 percent of the costs of the program
through cash or in-kind contributions, unless a lesser amount has
been approved by ACF (42 USC 9835 (b); 45 CFR sections 1301.20 and
1301.21).
2. Level
of Effort - Not Applicable
3. Earmarking
a. The costs
of developing and administering a Head Start program shall not exceed
15 percent of the annual total program costs, including the required
non-Federal contribution to such costs (i.e., matching), unless
a waiver has been granted by ACF. Development and administrative
costs include, but are not limited to, the cost of organization-wide
planning, coordination and general purpose direction, accounting
and auditing, purchasing and personnel functions, and the cost of
operating and maintaining space for these purposes (42 USC 9839(b);
45 CFR section 1301.32).
b. Enrollment
levels must adhere to the levels specified in the financial assistance
award.
(1) For grantees
other than Indian tribes/tribal organizations, at least 90 percent
of the enrollees must come from families whose income is below the
official Federal poverty guidelines or who are receiving public
assistance (45 CFR section 1305.4).
(2) For tribal
grantees, the percentage may be as low as 51 percent, providing
certain conditions are met (45 CFR section 1305.4(b)(3)).
The poverty
guidelines are issued each year in the Federal Register and HHS
maintains a page on the Internet which provides the poverty guidelines
(http://aspe.os.dhhs.gov/poverty/poverty.htm).
L. Reporting
1. Financial
Reporting
a. SF-269,
Financial Status Report - Applicable
b. SF-270,
Request for Advance or Reimbursement - Not Applicable
c. SF-271,
Outlay Report and Request for Reimbursement for Construction
Programs - Not Applicable
d. SF-272,
Federal Cash Transactions Report - Payments under this program
are made by HHS, Payment Management System (PMS). Reporting equivalent
to the SF-272 is accomplished through the PMS and is evidenced by
the PMS 272 series of reports.
M. Subrecipient
Monitoring
Grantees must
establish and implement procedures for the ongoing monitoring of
their own Early Head Start and Head Start operations, as well as
those of their delegate agencies, to ensure that these operations
effectively implement Federal regulations. Grantees must inform
delegate agency governing bodies of any deficiencies in delegate
agency operations identified in the monitoring review and must help
them develop plans, including timetables, for addressing identified
problems (45 CFR sections 1304.51(i)(2) and (3)).
N. SPECIAL
TESTS AND PROVISIONS
1. Licensing
Requirement
Compliance
Requirement - The facilities used by Early Head Start and Head Start
grantees for regularly scheduled center-based and combination program
option class room activities or home-based group socialization activities
must comply with applicable State and local requirements concerning
licensing (45 CFR section 1306.30(c)).
Audit Objective
- Determine whether the grantee has the required license and the
license is current.
Suggested
Audit Procedures
- Ascertain
the applicable State and local licensing requirements.
- Ascertain
if the grantee holds the required license and that the license
is current.
DEPARTMENT
OF HEALTH AND HUMAN SERVICES
CFDA 93.658
FOSTER CARE--TITLE IV-E
I. PROGRAM
OBJECTIVES
The objective
of the Foster Care program is to help States provide safe, appropriate,
24-hour, substitute care for children who are under the jurisdiction
of the administering State agency and need temporary placement and
care outside their homes.
II. PROGRAM
PROCEDURES
Administration
and Services
The Foster
Care program is administered at the Federal level by the Children's
Bureau, Administration on Children, Youth and Families, Administration
for Children and Families (ACF), a component of the Department of
Health and Human Services (HHS). Funding is provided to the 50 States
and the District of Columbia, based on a one-time plan and amendments,
as required by changes in statutes, rules, regulations, interpretations,
and HHS Departmental Appeals Board decisions, submitted to and approved
by the cognizant ACF Regional Administrator. This program is considered
an open-ended entitlement program and allows the State to be funded
at a specified percentage (Federal financial participation) for
program costs for eligible children.
The designated
State agency for this program, which is authorized under Title IV-E
of the Social Security Act, as amended, also administers ACF funding
provided for other Title IV-E programs, e.g., Adoption Assistance
and Transition to Independent Living; Child Welfare Services and
Family Support and Preservation (Title IV-B of the Social Security
Act, as amended) and the Social Services Block Grant program (Title
XX of the Social Security Act, as amended; CFDA 93.667).
Source of
Governing Requirements
The Foster
Care program is authorized by Title IV-E of the Social Security
Act, as amended (42 USC 670 et seq.).
As an HHS entitlement
program, the Foster Care program is subject to 45 CFR part 74 (in
lieu of the HHS implementation of the A-102 Common Rule), as specified
in 45 CFR section 74.1(a)(3), and to Office of Management and Budget
Circular A-87 (as implemented in "Cost Principles and Procedures
for Developing Cost Allocation Plans and Indirect Cost Rates for
Agreements with the Federal Government," HHS Publication ASMB C-10,
available on the Internet at http://www.hhs.gov/progorg/grantsnet/index2.htm).
This program is also subject to 45 CFR part 95.
States are
required to adopt and adhere to their own statutes and regulations
for program implementation, consistent with the requirements of
Title IV-E and the approved State plan.
III. COMPLIANCE
REQUIREMENTS
In developing
the audit procedures to test compliance with the requirements for
a Federal program, the auditor should look first to Part 2, Matrix
of Compliance Requirements, to identify which of the 14 types of
compliance requirements described in Part 3 are applicable and then
look to Parts 3 and 4 for the details of the requirements.
A. Activities
Allowed or Unallowed
1. Activities
Allowed
a. Federal
funds may be used for Foster Care maintenance payments, in accordance
with the State's Foster Care maintenance payment rate schedule,
to individuals serving as foster family homes, to child-care institutions,
or to public or non-profit child-placement or child-care agencies.
Such payments may include the cost of (and the cost of providing,
including the associated administrative and operating costs of an
institution) food, clothing, shelter, daily supervision, school
supplies, personal incidentals, liability insurance with respect
to a child, and reasonable travel to the child's home for visitation
(42 USC 672(b)(1) and (2), (c)(2), and 675(4)).
b. Federal
funds may be used for training (including both short and long-term
training at educational institutions through grants to such institutions
or by direct financial assistance to students enrolled in such institutions)
of personnel employed or preparing for employment by the agency
administering the plan (42 USC 674(a)(3)(A)).
c. Federal
funds may be used for short-term training, including associated
travel and per diem, of foster parents and staff of licensed or
approved child-care institutions at the initiation of or during
their period of care (45 CFR section 1356.60(c)(4)).
d. Federal
funds may be used for costs directly related to the administration
of the program, including those associated with eligibility determination
and redetermination; referral to services; placement; preparation
for and participation in hearings and appeals; rate setting; recruitment
and licensing of foster homes and institutions; and a proportionate
share of related agency overhead (45 CFR section 1356.60(c)).
e. With any
required ACF approval, Federal funds may be used for costs related
to design, implementation and operation of a State-wide data collection
system (45 CFR sections 1356.60(d) and 95.611).
2. Activities
Unallowed
Costs of social
services provided to a child, the child's family, or the child's
foster family which provide counseling or treatment to ameliorate
or remedy personal problems, behaviors, or home conditions are unallowable
(45 CFR section 1356.60(c)(3)).
B. Allowable
Costs/Cost Principles
In addition
to the requirements of OMB Circular A-87, States are subject to
the cost allocation provisions and rules governing allowable costs
of equipment of 45 CFR part 95, which references OMB Circular A-87
at 45 CFR section 95.507(a)(2) (45 CFR sections 1355.57, 95.503,
and 95.705).
E. Eligibility
1. Eligibility
for Individuals
Foster Care
benefits may be paid on behalf of a child only if all of the following
requirements are met:
a. Foster Care
maintenance payments are allowable only if the foster child was
removed from his or her home by means of a judicial determination
or pursuant to a voluntary placement agreement, as defined in 42
USC 672(f) (42 USC 672(a)).
(1) If the
removal was by judicial determination, the court action must have
been initiated within 6 months of the child's removal from the home
of a specified relative (42 USC 672(a)(4)) and must contain language
to the effect that: (i) the child's remaining at home would be contrary
to his or her welfare, and (ii) reasonable efforts have been made
to prevent the removal and to make it possible for the child to
safely return home (42 USC 672(a)).
(2) If the
removal was by a voluntary placement agreement, it must be followed
within 180 days by a judicial determination to the effect that such
placement is in the best interests of the child (42 USC 672(e);
and 45 CFR section 1356.30(b)).
b. The child's
placement and care are the responsibility of either the State agency
administering the approved Title IV-E plan or any other public agency
under a valid agreement with the cognizant State agency (42 USC
672(a)(2)).
c. A child
must meet the eligibility requirements of the former Aid to Families
with Dependent Children (AFDC) program (i.e., meet the State-established
standard of need as of July 16, 1996, prior to enactment of the
Personal Responsibility and Work Opportunity Reconciliation Act).
Unless the child is expected to graduate from a secondary educational
institution before his or her 19th birthday, eligibility ceases
at the child's 18th birthday (42 USC 672(a)).
d. The provider,
whether a foster family home or a child-care institution must be
licensed by the proper State Foster Care licensing authority. A
child care institution is defined as a private child-care institution,
or a public child-care institution which accommodates no more than
25 children, which is licensed or approved by the State in which
it is situated, but does not include detention facilities, forestry
camps, training schools, or facilities operated primarily for the
purpose of detention of children who are determined to be delinquent
(42 USC 671(a)(10) and 672(c)).
2. Eligibility
for Groups of Individuals or Area of Service Delivery - Not
Applicable
3. Eligibility
for Subrecipients - Not Applicable
F. Equipment
and Real Property Management
Equipment that
is capitalized and depreciated or is claimed in the period acquired
and charged to more than one program is subject to 45 CFR section
95.707(b) in lieu of the requirements of the A-102 Common Rule and
the HHS implementation at 45 CFR part 74 (45 CFR section 95.707(b)).
G. Matching,
Level of Effort , and Earmarking
1. Matching
The percentage
of required State funding and associated Federal funding ("Federal
financial participation" (FFP)) varies by type of expenditure as
follows:
a. The percentage
of Federal funding in foster care maintenance payments will be the
Federal Medical Assistance Program percentage. This percentage varies
by State and is available on the Internet (http://www.hcfa.gov/medicaid/ofs%2Dffp.htm)
(42 USC 674(a)(1); 45 CFR section 1356.60(a)).
b. The percentage
of Federal funding in expenditures for short- and long-term training
at educational institutions of employees or prospective employees,
and short-term training of current or prospective foster or adoptive
parents and members of staff of State-licensed or State-approved
child-care institutions (including travel and per diem) is 75 percent
(42 USC 674(a)(3)(A) and (B); 45 CFR section 1356.60(b)).
c. The percentage
of Federal funding for expenditures for planning, design, development,
and installation and operation of a Statewide automated child welfare
information system meeting specified requirements (and expenditures
for hardware components for such systems) is 50 percent (42 USC
674(a)(3)(C) and (D); 45 CFR sections 1355.52 and 1356.60(d)).
d. The percentage
of Federal funding of all other allowable administrative expenditures
is 50 percent (42 USC 674 (a)(1)(E); 45 CFR section 1356.60(c)).
2. Level
of Effort - Not Applicable
3. Earmarking
- Not Applicable
H. Period
of Availability of Federal Funds
This program
operates on a cash accounting basis and each year's funding and
accounting is discrete. To be eligible for Federal funding, claims
must be submitted to ACF within 2 years after the calendar quarter
in which the State made the expenditure. This limitation does not
apply to any claim (1) for an adjustment to prior year costs (defined
as an adjustment in the amount of a particular cost item that was
previously claimed under an interim rate concept and for which it
is later determined that the cost is greater or less than that originally
claimed) or, (2) resulting from a court-ordered retroactive adjustment
(45 CFR sections 95.7, 95.13, and 95.19).
L. Reporting
1. Financial
Reporting
a. SF-269,
Financial Status Report - Not Applicable
b. SF-270,
Request for Advance or Reimbursement - Not Applicable
c. SF-271,
Outlay Report and Request for Reimbursement for Construction
Programs - Not Applicable
d. SF-272,
Federal Cash Transactions Report - Payments under this program
are made by the HHS, Payment Management System (PMS). Reporting
equivalent to the SF-272 is accomplished through the PMS and is
evidenced by the PMS-272 series of reports.
2. Performance
Reporting - Not Applicable
3. Special
Reporting - Not Applicable
DEPARTMENT
OF HEALTH AND HUMAN SERVICES
CFDA 93.667
SOCIAL SERVICES BLOCK GRANT
I. PROGRAM
OBJECTIVES
The purpose
of the Social Services Block Grant (SSBG) program is to provide
funds to States (including the District of Columbia and five territories)
to provide services for individuals, families, and entire population
groups in one or more of the following areas: (1) achieving or maintaining
economic self-support and self-sufficiency to prevent, reduce, or
eliminate dependency; (2) preventing or remedying neglect, abuse,
or exploitation of children and adults unable to protect their own
interests; (3) preserving, rehabilitating, or reuniting families;
(4) preventing or reducing inappropriate institutional care by providing
for community-based care, home-based care, or other forms of intensive
care; and (5) securing referral or admission for institutional care
when other forms of care are not appropriate, or providing services
to individuals in institutions.
II. PROGRAM
PROCEDURES
Administration
and Services
The SSBG program
is administered by the Administration for Children and Families
(ACF), a component of the Department of Health and Human Services
(HHS). Funds are awarded based on the State's population following
receipt and review of the State's report on the proposed use of
funds for the coming year, which serves as the State's plan. States
have the flexibility to determine what services will be provided,
consistent with the statutory goals and objectives, who is eligible,
and how funds will be distributed among services and entities within
the State, including whether to provide services directly or obtain
them from other public or private agencies and individuals. The
State must also conduct a public hearing on the proposed use and
distribution of funds, as included in the report, as a prerequisite
to the receipt of SSBG funds.
Source of
Governing Requirements
The SSBG program
is authorized under Title XX of the Social Security Act, as amended,
and is codified at 42 USC 1397 through 1397e. The implementing regulations
for this and other block grant programs authorized by Omnibus Budget
Reconciliation Act 1981 are published at 45 CFR part 96. Those regulations
include both specific requirements and general administrative requirements
(in lieu of either 45 CFR part 74 (OMB Circular A-110) or part 92
(A-102 Common Rule)) for the covered block grant programs. Requirements
specific to SSBG are in 45 CFR sections 96.70 through 96.74.
As discussed
in Appendix I of this Supplement, Federal Programs Excluded from
the A-102 Common Rule, States are to use the fiscal policies that
apply to their own funds in administering SSBG. Procedures must
be adequate to assure the proper disbursal of and accounting for
Federal funds paid to the grantee, including procedures for monitoring
the assistance provided (45 CFR section 96.30).
Under the block
grant philosophy, each State is responsible for designing and implementing
its own SSBG program, within very broad Federal guidelines. States
must administer their SSBG program according to their approved plan
and any amendments and in conformance with the their own implementing
rules and policies.
III. COMPLIANCE
REQUIREMENTS
In developing
the audit procedures to test compliance with the requirements for
a Federal program, the auditor should first look to Part 2, Matrix
of Compliance Requirements, to identify which of the 14 types of
compliance requirements described in Part 3 are applicable and then
look to Parts 3 and 4 for the details of the requirements.
A. Activities
Allowed or Unallowed
1. Services
provided with SSBG funds may include, but are not limited to, child
care services, protective services for children and adults, services
for children and adults in foster care, services related to the
management and maintenance of the home, day care services for adults,
transportation services, family planning services, training and
related services, employment services, information, referral, counseling
services, the preparation and delivery of meals, health support
services and appropriate combinations of services designed to meet
the special needs of children, the aged, the mentally retarded,
the blind, the emotionally disturbed, the physically handicapped,
and alcoholics and drug addicts (42 USC 1397a(a)). Uniform definitions
for these services are included in Appendix A to 45 CFR part 96
- Uniform Definitions of Services.
Expenditures
for these services may include expenditures for administration,
including planning and evaluation, personnel training and retraining
directly related to the provision of those services (including both
short- and long-term training at educational institutions), and
conferences and workshops and assistance to individuals participating
in such activities (42 USC 1397a(a)).
2. A State
may purchase technical assistance from public or private entities
if the State determines that such assistance is required in developing,
implementing or administering the SSBG program (42 USC 1397a(e)).
3. A State
may transfer up to 10 percent of its annual allotment to the following
block grants for support of health services, health promotion and
disease prevention activities, low-income home energy assistance,
or any combination of these activities: Preventive Health and Health
Services Block Grant (CFDA 93.991); Block Grants for Prevention
and Treatment of Substance Abuse (CFDA 93.959); Maternal and Child
Health Services Block Grant to the States (CFDA 93.994); Low-Income
Home Energy Assistance (CFDA 93.568); Temporary Assistance for Needy
Families (CFDA 93.558); Child Care and Development Fund (CFDA 93.575
and 93.596); and Community Services Block Grant (93.569) (42 USC
1397a(d); 45 CFR section 96.72).
4. Funds may
not be used for:
a. Purchase
or improvement of land, or the purchase, construction, or permanent
improvement (other than minor remodeling) of any facility (unless
the restriction is waived by ACF) (42 USC 1397(d)(a)(1)).
b. Cash payments
for costs of subsistence or for the provision of room and board
(other than costs of subsistence during rehabilitation, room and
board provided for a short term as an integral but subordinate part
of a social service, or temporary shelter provided as a protective
service) (42 USC 1397(d)(a)(2)).
c. Wages of
any individual as a social service (other than payment of wages
of Temporary Assistance for Needy Families (TANF) (CFDA 93.558)
recipients employed in the provision of child day care services)
(42 USC 1397(d)(a)(3)).
d. Medical
care (other than family planning services, rehabilitation services,
or initial detoxification of an alcoholic or drug dependent individual)
unless it is an integral but subordinate part of an allowable social
service under SSBG (unless the restriction is waived by ACF) (42
USC 1397(d)(a)(4)).
e. Social services
(except services to an alcoholic or drug dependent individual or
rehabilitation services) provided in and by employees of any hospital,
skilled nursing facility, intermediate care facility, or prison,
to any individual living in such institution (42 USC 1397(d)(a)(5)).
f. The provision
of any educational service which the State makes generally available
to its residents without cost and without regard to their income
(42 USC 1397(d)(a)(6)).
g. Any child
day care services unless such services meet applicable standards
of State and local law (42 USC 1397(d)(a)(7)).
h. The provision
of cash payments as a service (this limitation does not apply to
payments to individuals with respect to training or attendance at
conferences or workshops) (42 USC 1397(d)(a)(8)).
i. Any item
or service (other than an emergency item of service) furnished by
an entity, physician, or other individual during the period of exclusion
from reimbursement by various provisions of Federal regulations
(42 USC 1397(d)(a)(9)).
B. Allowable
Costs/Cost Principles
As discussed
in Appendix I of this Supplement, Federal Programs Excluded from
the A-102 Common Rule, SSBG is exempt from the provisions of OMB
cost principles circulars. State cost principles requirements apply
to SSBG.
G. Matching,
Level of Effort, Earmarking
1. Matching
- Not Applicable
2. Level
of Effort - Not Applicable
3. Earmarking
The State shall
use all of the amount transferred in from TANF (CFDA 93.558) for
only for programs and services to children or their families whose
income is less than 200 percent of the official poverty guideline
as revised annually by HHS (42 USC 604(d)(3)(A) and 9902(2)). Additional
information on this transfer in is provided in IV. Other Information.
The poverty
guidelines are issued each year in the Federal Register and
HHS maintains a page on the Internet which provides the poverty
guidelines (http://aspe.os.dhhs.gov/poverty/poverty.htm).
H. Period
of Availability of Federal Funds
SSBG funds
must be expended by the State in the fiscal year allotted or in
the succeeding fiscal year (42 USC1397a(c)).
IV. OTHER
INFORMATION
Transfers
out of SSBG
As discussed
in III.A, Activities Allowed or Unallowed, funds may be transferred
out of SSBG to other Federal programs. The amounts transferred out
of SSBG are subject to the requirements of the program into which
they are transferred and should not be included in the audit universe
and total expenditures of SSBG when determining Type A programs.
On the Schedule of Expenditures of Federal Awards, the amount transferred
out should not be shown as SSBG expenditures but should be shown
as expenditures for the program into which they are transferred.
Transfers
into SSBG
A State may
transfer up to 10 percent of the combined total of the State family
assistance grant, supplemental grant for population increases, and
bonus funds for high performance and illegitimacy reduction, if
any, (all part of TANF) for a given fiscal year to carry out programs
under the SSBG. Such amounts may be used only for programs or services
to children or their families whose income is less than 200 percent
of the poverty level. The amount of the transfers is reflected on
the quarterly Temporary Assistance for Needy Families (TANF)
ACF-196 Financial Report. The amounts transferred into this
program are subject to the requirements of this program when expended
and should be included in the audit universe and total expenditures
of this program when determining Type A programs. On the Schedule
of Expenditures of Federal Awards, the amounts transferred in should
be shown as expenditures of this program when such amounts are expended.
DEPARTMENT
OF HEALTH AND HUMAN SERVICES
CFDA 93.778
MEDICAL ASSISTANCE PROGRAM (Medicaid; TITLE XIX)
CFDA 93.775
STATE MEDICAID FRAUD CONTROL UNITS
CFDA 93.777
STATE SURVEY AND CERTIFICATION OF HEALTH CARE PROVIDERS AND SUPPLIERS
NOTE: In accordance
with OMB Circular A-133, §___.525(c)(2), when the auditor is
using the risk-based approach for determining major programs, the
auditor should consider that HHS has identified the Medicaid Assistance
Program as a program of higher risk. While not precluding an auditor
from determining that the Medicaid Cluster qualifies as a low-risk
program (e.g., because prior audits have shown strong internal controls
and compliance with Medicaid requirements), this identification
by HHS should be considered as part of the risk assessment process.
I. PROGRAM
OBJECTIVES
Medical
Assistance Program
The objective
of the Medical Assistance Program (Medicaid or Title XIX of the
Social Security Act, as amended, (42 USC 1396, et seq.)) is to provide
payments for medical assistance to low-income persons who are age
65 or over, blind, disabled, or members of families with dependent
children or qualified pregnant women or children.
State Medicaid
Fraud Control Units
The objective
of the State Medicaid Fraud Control Units is to control provider
fraud in the Medicaid program. The State Medicaid Fraud Control
Unit's grant application contains the organization, administration,
agreements, and procedures for the unit. Federal requirements are
contained in 42 CFR part 1007. This unit is separate and distinct
from the State Medicaid agency.
State Survey
and Certification of Health Care Providers and Suppliers
The objective
of the State Survey and Certification of Health Care Providers and
Suppliers program is to determine whether the providers and suppliers
of health care services under the Medicaid program are in compliance
with regulatory health and safety standards and conditions of participation.
This program is administered in a manner similar to Medicaid and
includes an approved State plan which addresses Federal requirements.
Even though
the State Medicaid Fraud Control Units and State Survey and Certification
of Health Care Providers and Suppliers have substantially less Federal
expenditures than the Medicaid Assistance Program, they are clustered
with Medicaid because these programs provide significant controls
over the expenditures of Medicaid funds. It is unlikely that the
expenditures for these two programs would be material to the Medicaid
cluster; however, noncompliance with the requirements to administer
these controls may be material.
II. PROGRAM
PROCEDURES
The following
paragraphs are intended to provide a high-level, overall description
of how Medicaid generally operates. It is not practical to provide
a complete description of program procedures because Medicaid operates
under both Federal and State laws and regulations and States are
afforded flexibility in program administration. Accordingly, the
following paragraphs are not intended to be used in lieu of or as
a substitute for the Federal and State laws and regulations applicable
to this program.
Authoritative
Sources
The auditor
is expected to use the applicable laws and regulations (including
the applicable State approved plan) when auditing this program.
The Federal law that authorizes these programs is Title XIX of the
Social Security Act (Title XIX), enacted in 1965 and subsequently
amended (42 USC 1396, et seq.). The Federal regulations applicable
to the Medicaid program are found in 42 CFR parts 430 through 456,
1002, and 1007.
Administration
The U.S. Department
of Health and Human Services' (HHS) Health Care Financing Administration
(HCFA) administers the Medicaid program in cooperation with State
governments. The Medicaid program is jointly financed by the Federal
and State governments and administered by the States. For purposes
of this program, the term "State" includes the 50 States, the District
of Columbia, and five U.S. territories: Puerto Rico, the Virgin
Islands, Guam, American Samoa, and the Northern Mariana Islands.
Medicaid operates as a vendor payment program, with States paying
providers of medical services directly. Participating providers
must accept the Medicaid reimbursement level as payment in full.
Within broad Federal rules, each State decides eligible groups,
types and range of services, payment levels for services, and administrative
and operating procedures.
State Plans
States administer
the Medicaid program under a State plan approved by HCFA. The Medicaid
State plan is a comprehensive written statement submitted by the
State Medicaid agency describing the nature and scope of its Medicaid
program. A State plan for Medicaid consists of preprinted material
that covers the basic requirements, and individualized content that
reflects the characteristics of each particular State's program.
The State plan is referenced to the applicable Federal regulation
for each requirement and will also contain references to applicable
State regulations.
The State plan
contains all information necessary for HCFA to determine whether
the State plan can be approved to serve as a basis for determining
the level of Federal financial participation in the State program.
The State plan must specify a single State agency (hereinafter referred
to as the "State Medicaid agency") established or designated to
administer or supervise the administration of the State plan. The
State plan must also include a certification by the State Attorney
General which cites the legal authority for the State Medicaid agency
to determine eligibility.
The State plan
also specifies the criteria for determining the validity of payments
disbursed under the Medicaid program. This encompasses the system
the State will use to ensure that payments are disbursed only to
eligible providers for appropriately-priced services that are covered
by the Medicaid program and provided to eligible beneficiaries.
Payments must also be based on claims that are adequately supported
by medical records, and payments must not be duplicated.
A State plan
or plan amendment will be considered approved unless HCFA sends
the State written notice of disapproval or a request for additional
information within 90 days after receipt of the State plan or plan
amendment. Copies of the State plan are available from the State
Medicaid agency.
Waivers
The State Medicaid
agency may apply for a waiver of Federal requirements. Waivers are
intended to provide the flexibility needed to enable States to try
new or different approaches to the efficient and cost-effective
delivery of health care services, or to adapt their programs to
the special needs of particular areas or groups of beneficiaries.
Waivers allow exceptions to State plan requirements and permit a
State to implement innovative programs or activities on a time-limited
basis, and are subject to specific safeguards for the protection
of beneficiaries and the program.
Actions that
States may take if waivers are obtained include: (1) implement a
primary care case-management system or a specialty physician system;
(2) designate an entity to act as a central broker in assisting
Medicaid beneficiaries to choose among competing health care plans;
(3) share with beneficiaries (through the provision of additional
services) cost-savings made possible through the beneficiaries'
use of more cost effective medical care; (4) limit beneficiaries'
choice of providers to providers that fully meet reimbursement,
quality, and utilization standards, which are established under
the State plan and are consistent with access, quality, and efficient
and economical furnishing of care; (5) include as "medical assistance,"
under its State plan, home and community-based services furnished
to beneficiaries who would otherwise need inpatient care that is
furnished in a hospital, skilled nursing facility (SNF), or intermediate
care facility (ICF), and is reimbursable under the State plan; and,
(6) impose a deduction, cost-sharing or similar charge of up to
twice the "nominal charge" established under the State plan for
outpatient services for certain nonemergency services. A State may
also obtain a waiver of statutory requirements to provide an array
of home and community-based services which may permit an individual
to avoid institutionalization (42 CFR part 441 subpart G). Depending
on the type of requirement being waived, a waiver may be effective
for initial periods ranging from two to three years, with varying
renewal periods. Copies of waivers are available from the State
Medicaid agency.
Payments
to States
Once HCFA has
approved a State plan and waivers, it makes quarterly grant awards
to the State to cover the Federal share of Medicaid expenditures
for services, training, and administration. The amount of the quarterly
grant is determined on the basis of information submitted by the
State Medicaid agency (in quarterly estimate and quarterly expenditure
reporting). The grant award authorizes the State to draw Federal
funds as needed to pay the Federal financial participation portion
of qualified Medicaid expenditures. The HHS Payment Management System
Division of Payment Management (PMS-DPM) in Rockville, Maryland,
disburses Federal funds to States including funding under Medicaid.
Currently, all States use a system developed by HHS called SMARTLINK
to request funds on an as needed basis. States may use one of two
payment mechanisms which are linked to SMARTLINK: (1) wire transfers
through the Automated Clearinghouse in conjunction with the Federal
Reserve Bank, which is settled the day after the request date, or
(2) FEDWIRE transfers through the U.S. Department of the Treasury,
which is a same day payment mechanism. The payment method is selected
by the State and approved by the U.S. Department of the Treasury
and HHS before payments are made through either mechanism. States
report cash activity to PMS-DPM with a quarterly Cash Transactions
Report (PMS-272).
State Expenditure
Reporting
Thirty days
after the end of the quarter, States electronically submit form
HCFA-64 , "Quarterly Statement of Expenditures for the Medical Assistance
Program." The HCFA-64 presents expenditures and recoveries and other
items that reduce expenditures for the quarter and prior period
expenditures. The amounts reported on the HCFA-64 and its attachments
must be actual expenditures for which all supporting documentation,
in readily reviewable form, has been compiled and is available immediately
at the time the claim is filed. States use the Medicaid Budget and
Expenditure System to electronically submit the HCFA-64 directly
to HCFA.
Eligibility
Eligibility
for Medicaid is based primarily on income and resources. The States
must provide services to mandatory categorically needy and other
required special groups (e.g., individuals receiving Aid to Families
With Dependent Children (AFDC), Temporary Assistance for Needy Families
(TANF), or Supplemental Security Income (SSI)). States may provide
coverage to members of optional groups who do not receive cash assistance
(e.g., individuals who would be eligible for but are not receiving
AFDC) and medically needy individuals (individuals who are eligible
for Medicaid after deducting large medical expenditures from their
income). Eligibility criteria will be specified in the individual
State plan.
Under the Personal
Responsibility and Work Opportunity Reconciliation Act of 1996,
the cash welfare program known as AFDC was repealed and replaced
with block grants to States known as TANF. Under the old AFDC law,
children and parents who received cash welfare were automatically
enrolled in the Medicaid program. While the new law eliminates the
entitlement to welfare, access to Medicaid for children and parents
who would have met the State's old AFDC income and asset standards
in place on July 16, 1996, has been preservedCwhether or not these
individuals are eligible for the new TANF system (P.L. 104-193).
States must
provide limited Medicaid coverage for "qualified Medicare beneficiaries."
These are aged and disabled persons who are receiving Medicare,
whose income is below 100 percent of the Federal poverty level,
and whose resources do not exceed twice the allowable amount under
SSI (42 CFR section 407.40).
The State plan
will specify if determinations of eligibility are made by agencies
other than the State Medicaid agency and will define the relationships
and respective responsibilities of the State Medicaid agency and
the other agencies. The application process includes completing
and filing an application form, being interviewed, and having information
verified. The State plan must also provide that the State Medicaid
agency will maintain individual records on each applicant and Medicaid
beneficiary including date of application, date and basis for disposition,
facts essential to determination of initial and continuing eligibility,
provision of medical assistance, and basis for discontinuing assistance.
Services
Medicaid expenditures
include medical assistance payments for eligible recipients for
such services as hospitalization, prescription drugs, nursing home
stays, outpatient hospital care, and physicians' services, and expenditures
for administration and training. In order for a medical assistance
payment to be considered valid, it must comply with the requirements
of Title XIX, as amended, (42 USC 1396, et seq.) and implementing
Federal regulations. Determinations of payment validity are made
by individual States in accordance with approved State plans under
broad Federal guidelines.
Some States
have managed care arrangements under which the State enters into
a contract with an entity, such as an insurance company, to arrange
for medical services to be available for beneficiaries. The State
pays a fixed rate per person (capitation rate) without regard to
the actual medical services utilized by each beneficiary.
Also, Medicaid
expenditures include administration and training, the State Survey
and Certification Program, and State Medicaid Fraud Control Units.
Control
Systems
Utilization
Control and Program Integrity
The State plan
must provide methods and procedures to safeguard against unnecessary
utilization of care and services, including those provided by long
term care institutions. In addition, the State must have: (1) methods
of criteria for identifying suspected fraud cases; (2) methods for
investigating these cases; and, (3) procedures, developed in cooperation
with legal authorities, for referring suspected fraud cases to law
enforcement officials.
These requirements
may be met by the State Medicaid agency assuming direct responsibility
for assuring the requirements or met by contracting with a peer
review organization (PRO) to perform such reviews. The reviewer
must establish and use written criteria for evaluating the appropriateness
and quality of Medicaid services.
The State Medicaid
agency must have procedures for the ongoing post-payment review,
on a sample basis, for the necessity, quality, and timeliness of
Medicaid services. The State Medicaid agency may conduct this review
directly or may contract with a PRO.
Suspected fraud
identified by utilization control and program integrity should be
referred to the State Medicaid Fraud Control Units.
Inpatient
Hospital and Long-Term Care Facility Audits
States are
required to establish as part of the State plan standards and methodology
for reimbursing inpatient hospital and long-term care facilities
based on payment rates that represent the cost to efficiently and
economically operate such facilities and provide Medicaid services.
The State Medicaid agency must provide for the filing of uniform
cost reports by each participating provider. These cost reports
are used by the State Medicaid agency to aid in the establishment
of payment rates. The State Medicaid agency must provide for periodic
audits of the financial and statistical records of the participating
providers. Such audits could include desk audits of cost reports
in addition to field audits. These audits are an important control
for the State Medicaid agency in ensuring that established payment
rates are proper.
ADP Risk
Analyses and System Security Reviews
The Medicaid
program is highly dependent on extensive and complex computer systems
that include controls for ensuring the proper payment of Medicaid
benefits. States are required to establish a security plan for ADP
systems that include policies and procedures to address: (1) physical
security of ADP resources; (2) equipment security to protect equipment
from theft and unauthorized use; (3) software and data security;
(4) telecommunications security; (5) personnel security; (6) contingency
plans to meet critical processing needs in the event of short- or
long-term interruption of service; (7) emergency preparedness; and,
(8) designation of an agency ADP security manager.
State agencies
must establish and maintain a program for conducting periodic risk
analyses to ensure appropriate, cost effective safeguards are incorporated
into new and existing systems. State agencies must perform risk
analyses whenever significant system changes occur. On a biennial
basis State agencies shall review the ADP system security of installations
involved in the administration of HHS programs. At a minimum, the
reviews shall include an evaluation of physical and data security
operating procedures, and personnel practices.
Medicaid
Management Information System (MMIS)
The MMIS is
the mechanized Medicaid benefit claims processing and information
retrieval system that States are required to have, unless this requirement
is waived by the Secretary of HHS. HHS provides general systems
guidelines (42 CFR sections 433.110 through 433.131) but it does
not provide detailed system requirements or specifications for States
to use in the development of MMIS systems. As a result, MMIS systems
will vary from State to State. The system may be maintained and
operated by the State or a contractor.
The MMIS is
normally used to process payments for most medical assistance services
and normally includes edits and controls which identify unusual
items for follow up by the utilization control and program integrity
unit. However, the State may use systems other than MMIS to process
medical assistance payments. In many cases the operation of the
MMIS is contracted out to a private contractor. The State plan will
describe the administration of each State's claims processing system.
Generally,
the MMIS does not process claims from State agencies (e.g., State
operated intermediate care facility for the mentally retarded (ICF/MR))
and certain selected types of claims. The claims payments which
are not processed through MMIS may be material to the Medicaid program.
Medicaid
Eligibility Quality Control System (MEQC)
Each State
is required to operate a MEQC system in accordance with requirements
specified by HCFA. This HCFA-approved system redetermines eligibility
for individual sampled cases and provides national and State measures
of the accuracy of eligibility and benefit amount determinations
(commonly referred to as "payment accuracy"), including both underpayments
and overpayments, and of the correctness of decisions to deny benefits.
The MEQC system reviews the determinations of beneficiary eligibility
made by a State agency, or its designee, and uses statistical sampling
methods to select claims for review and project the number and dollar
impact of payments to ineligible beneficiaries (42 CFR sections
431.800 through 431.865).
Federal
Oversight and Compliance Mechanisms
HCFA oversees
State operations through its organization consisting of a headquarters
and 10 regional offices.
HCFA program
oversight includes budget review, reviews of financial and program
reports, and on-site reviews which are normally targeted to cover
a specific area of concern. HCFA conveys areas of national and local
concerns to the States through the regions. Technical assistance
is used extensively to promote improvements in State operation of
the program but enforcement mechanisms are available. HCFA considers
the single audit as an important internal control in its monitoring
of States.
Federal program
oversight, because of its targeted nature, should not be used as
a substitute for audit evidence gained through transaction testing.
HHS Office
of Inspector General (OIG) Fraud Alerts
The HHS OIG
issues fraud alerts, some of which relate to the Medicaid program.
These alerts are available on the Internet from the HHS OIG Home
Page, Special Fraud Alerts section
(http://www.dhhs.gov/progorg/oig/frdalrt/index.htm).
III. COMPLIANCE
REQUIREMENTS
In developing
the audit procedures to test compliance with the requirements for
a Federal program, the auditor should first look to Part 2, Matrix
of Compliance Requirements, to identify which of the 14 types of
compliance requirements described in Part 3 are applicable and then
look to Parts 3 and 4 for the details of the requirements.
General Audit
Approach for Medicaid Payments
To be allowable,
Medicaid costs for medical services must be: (1) covered by the
State plan and waivers; (2) for an allowable service rendered (including
supported by medical records or other evidence indicating that the
service was actually provided and consistent with the medical diagnosis);
(3) properly coded; and, (4) paid at the rate allowed by the State
plan. Additionally, Medicaid costs must be net of applicable credits
(e.g., insurance, recoveries from other third parties who are responsible
for covering the Medicaid costs, and drug rebates), paid to eligible
providers, and only provided on behalf of eligible individuals.
Due to the
complexity of Medicaid program operations, it is unlikely the auditor
will be able to support an opinion that Medicaid expenditures are
in compliance with applicable laws and regulations (e.g., are allowable
under the State plan) without relying upon the systems and internal
controls. Examples of complexities include:
- Dependence
upon large and complex ADP systems to process the large volume of
Medicaid transactions.
- Medical services
are provided directly to an eligible beneficiary, normally without
prior approval by the State.
- Medical service
providers normally determine the scope and medical necessity of
the services.
- Notice to
the State that service is rendered is after-the-fact when a bill
is sent.
- Payments
systems do not include a review of original detailed documentation
supporting the claim prior to payment.
- Complex billing
charge structures and payment rates for medical services, including
significance of proper coding of services (e.g., billing by diagnosis
related groups (DRG)).
- Different
types of Medicaid payments (e.g., inpatient hospital, physicians,
prescription drugs and drug rebates).
Medicaid has
required control systems that should aid the auditor in obtaining
sufficient audit evidence for Medicaid expenditures. These control
systems are discussed in the preceding Program Procedures under
Control Systems and are: (1) utilization control and program
integrity; (2) inpatient hospital and long term care
facility audits; (3) ADP risk analyses and system security
reviews (e.g, of the MMIS); and (4) the MMIS normally includes
edits and controls that identify unusual items for follow up by
the utilization control and program integrity function. The first
three are generally performed by specialists retained by the State
Medicaid agency. The following table indicates the major types of
Medicaid payments to which these controls will likely relate:
Type
of Medicaid Payment
|
1
|
2
|
3
|
4
|
Inpatient
Hospital
|
X
|
X
|
X
|
X
|
Physicians
(including dental)
|
X
|
|
X
|
X
|
Prescription
Drugs (net of rebates)
|
X
|
|
X
|
X
|
Institutional
Long-Term Care
|
X
|
X
|
X
|
X
|
Each
of the above Medicaid payment types are tested for compliance with
applicable laws and regulations under either "A. Activities Allowed
or Unallowed;" "B. Allowable Costs/Cost Principles;" or "E. Eligibility."
Based upon the assessed level of control risk, the auditor should
design appropriate tests of the allowability of Medicaid payments.
Testing likely will include tests of medical records, in which case
the auditor should consider the need for assistance of specialists.
The auditor may consider using the same specialists used by the
State.
The auditor
should consider the following in planning and performing tests of
controls and compliance:
1. Section
"N. Special Tests and Provisions," includes required internal control,
which are compliance requirements (i.e., controls (1), (2),
and (3) above), and audit objectives and procedures for each.
The audit procedures will entail tests of work performed by the
State Medicaid agency.
2. Tests of
compliance with laws and regulations relating to Sections A, B,
and E below, and the compliance requirements enumerated in Section
N should be coordinated.
A. Activities
Allowed or Unallowed
1. Funds can
only be used for Medicaid benefit payments (as specified in the
State plan, Federal regulations, or an approved waiver), expenditures
for administration and training, expenditures for the State Survey
and Certification Program, and expenditures for State Medicaid Fraud
Control Units (42 CFR sections 435.10, 440.210, 440.220, and 440.180).
2. Case
Management Services - The State plan may provide for case management
services as an optional medical assistance service. The term case
management services means services which will assist individuals
eligible under the plan in gaining access to needed medical, social,
educational, and other services.
Medicaid case
management services are divided into two separate categories:
Administrative
case management - Services must be identifiable with Title-XIX
benefit (e.g., outreach services provided by public school districts
to Medicaid recipients).
Medical/Targeted
case management - Services must be provided to an eligible Medicaid
recipient. Services do not have to be specifically medical in nature
and can include securing shelter, personal needs, etc. (e.g., services
provided by community mental health boards, county offices of aging).
Case management
services is an area of risk because of the high growth of expenditures,
the relative newness of the provision that allows these expenditures
to be claimed, and prior experience which indicates problems with
the documentation of case management expenditures.
With the exception
of case management services provided through capitation (a process
in which payment is made on a per beneficiary basis) or prepaid
health plans, Federal regulations typically require the following
documentation for case management services: date of service; name
of recipient; name of provider agency and person providing the service;
nature, extent, or units of service; and, place of service (P.L.
99-272, Section 9508; 42 CFR part 434).
3. Managed
Care - A State may obtain a waiver of statutory
requirements in order to develop a system that more effectively
addresses the health care needs of its population. For example,
a waiver may involve the use of a program of managed care for selected
elements of the client population or allow the use of program funds
to serve specified populations that would be otherwise ineligible
(Sections 1115 and 1915 of the Social Security Act). Managed care
providers must be eligible to participate in the program at the
time services are rendered, payments to managed care plans should
only be for eligible clients for the proper period, and the capitation
payment should be properly calculated. Medicaid medical services
payments (e.g., hospital and doctors charges) should not be made
for services that are covered by managed care. States should ensure
that capitated payments to providers are discontinued when a beneficiary
is no longer enrolled for services. Requirements related to beneficiaries'
access to managed care services are covered under N.6., Special
Tests and Provisions, Managed Care.
4. Medicaid
Health Insurance Premiums - A State may enroll certain Medicare-eligible
recipients under Medicare Part B and pay the premium, deductibles,
cost sharing, and other charges (42 CFR section 431.625).
5. Disproportionate
Share Hospital - Federal financial participation is available
for aggregate payments to hospitals that serve a disproportionate
number of low income patients with special needs. The State plan
must specifically define a disproportionate share hospital and the
method of calculating the rate for these hospitals. Specific limits
for the total disproportionate share hospital payments for the State
and the individual hospitals are contained in the legislation (Section
1923 of the Social Security Act and 42 USC 1396(r)).
6. Home
Health Care - A State may obtain a waiver of statutory requirements
to provide an array of home and community-based services which may
permit an individual to avoid institutionalization (42 CFR part
441 subpart G). The HHS OIG has issued a special fraud alert concerning
home health care. Problems noted include cost report frauds, billing
for excessive services or services not rendered, and use of unlicensed
staff. The full alert was published in the Federal Register
on August 10, 1995, (page 40847) and is available on the Internet
from the HHS OIG Home Page, Special Fraud Alerts section (http://www.dhhs.gov/progorg/oig/frdalrt/frdalrt.html).
B. Allowable
Costs/Cost Principles
Recoveries,
Refunds, and Rebates (Costs must be the net of all applicable credits)
1. States must
have a system to identify medical services that are the legal obligation
of third parties, such as private health or accident insurers. Such
third party resources should be exhausted prior to paying claims
with program funds. Where a third party liability is established
after the claim is paid, reimbursement from the third party should
be sought (42 CFR sections 433.135 through 433.154).
2. The State
is required to credit the Medicaid program for (1) State warrants
that are canceled and uncashed checks beyond 180 days of issuance
(escheated warrants) and (2) overpayments made to providers of medical
services within specified time frames. In most cases, the State
must refund provider overpayments to the Federal Government within
60 days of identification of the overpayment, regardless of whether
the overpayment was collected from the provider (42 CFR sections
433.300 through 433.320 and 433.40).
3. Section
1903 (w)(1) of the Social Security Act (as amended by P.L. 102-234)
provides that, effective January 1, 1992, before calculating the
amount of Federal financial participation, certain revenues received
by a State will be deducted from the State's medical assistance
expenditures. The revenues to be deducted are (1) donations made
by health providers and entities related to providers (except for
bona fide donations and, subject to a limitation, donations
made by providers for the direct costs of out stationed eligibility
workers); and (2) impermissible health care-related taxes that exceed
a specified limit ( 42 USC 1396(b)(w) and 42 CFR section 433.57).
"Provider related
donations" are any donations or other voluntary payments (in-cash
or in-kind) made directly or indirectly to a State or unit of local
government by (1) a health care provider, (2) an entity related
to a health care provider, or (3) an entity providing goods or services
under the State plan and paid as administrative expenses. "Bona
fide provider-related donations" are donations that have no
direct or indirect relationship to payments made under Title XIX
(42 USC 1396, et seq.) to (1) that provider, (2) providers furnishing
the same class of items and services as that provider, or (3) any
related entity (42 CFR sections 433.58(d) and 433.66(b)).
Permissible
health care-related taxes are those taxes which are broad-based
taxes, uniformly applied to a class of health care items, services,
or providers, and which do not hold a taxpayer harmless for the
costs of the tax, or a tax program for which HCFA has granted a
waiver. Health care-related taxes that do not meet these requirements
are impermissible health care-related taxes (42 CFR section 433.68(b)).
The provisions
of P.L. 102-234 apply to all 50 States and the District of Columbia,
except those States whose entire Medicaid program is operated under
a waiver granted under section 1115 of the Social Security Act (42
CFR part 433; Federal Register published August 13, 1993,
58 FR 43156-43183).
4. Section
1927 of the Social Security Act allows States to receive rebates
for drug purchases the same as other payers receive. Drug manufacturers
are required to provide a listing to HCFA of all covered outpatient
drugs and, on a quarterly basis, are required to provide their average
manufacturer's price and their best prices for each covered outpatient
drug. Based upon these data, HCFA calculates a unit rebate amount
for each drug which it then provides to States. No later than 60
days after the end of the quarter, the State Medicaid agency must
provide to manufacturers drug utilization data. Within 30 days of
receipt of the utilization data from the State, the manufacturers
are required to pay the rebate or provide the State with written
notice of disputed items not paid because of discrepancies found.
E. Eligibility
1. Eligibility
for Individuals
The State Medicaid
agency or its designee is required to determine client eligibility
in accordance with eligibility requirements defined in the approved
State plan (42 CFR section 431.10). States have a high degree of
flexibility in designating who will determine eligibility.
The State is
required to operate a MEQC system in accordance with requirements
specified by HCFA. The MEQC system reviews the determinations of
beneficiary eligibility made by State Medicaid agencies, or their
designee, and uses statistical sampling methods to select claims
for review and project the number and dollar impact of incorrect
payments to ineligible beneficiaries (42 CFR sections 431.800 through
431.865).
As discussed
in the General Audit Approach for Medicaid Payments, the auditor
will likely combine Activities Allowed or Unallowed, Allowable Costs/Cost
Principles, and Eligibility testing. Therefore, compliance requirements
related to amounts provided to or on behalf of eligibles were combined
with Activities Allowed or Unallowed.
2. Eligibility
of Group of Individuals or Area of Service Delivery - Not Applicable
3. Eligibility
for Subrecipients - Not Applicable
G. Matching,
Level of Effort, Earmarking
1. Matching
The State is
required to pay part of the costs of providing health care to the
poor and part of the costs of administering the program. Different
State participation rates apply to medical assistance payments.
There are also different Federal financial participation rates for
the different types of costs incurred in administering the Medicaid
program, such as administration, family planning, training, computer,
and other costs (42 CFR sections 433.10 and 433.15). The auditor
should refer to the State plan for the matching rates.
2. Level
of Effort
A State waiver
may contain a level of effort requirement.
3. Earmarking
A State waiver
may contain an earmarking requirement.
L. Reporting
1. Financial
Reporting
a. SF-269,
Financial Status Report - Not Applicable
b. SF-270,
Request for Advance or Reimbursement - Not Applicable
c. SF-271,
Outlay Report and Request for Reimbursement for Construction
Program - Not Applicable
d. SF-272,
Federal Cash Transactions Report - Not Applicable
e. HCFA-64,
Quarterly Statement of Expenditures for the Medical Assistance Program
(OMB No. 0938-0067) - Required to be used in lieu of SF-269,
Financial Status Report and is required to be prepared quarterly
and submitted electronically to HCFA within 30 days after the end
of the quarter.
f. PMS-272,
Quarterly Cash Transactions Report (OMB No. 0937-0200) - Required
in lieu of the Federal Cash Transaction Report (SF-272).
2. Performance
Reporting - Not Applicable
3. Special
Reporting - Not Applicable
N. Special
Tests And Provisions
1. Utilization
Control and Program Integrity
Compliance
Requirements - The State plan must provide methods and procedures
to safeguard against unnecessary utilization of care and services,
including long-term care institutions. In addition, the State must
have: (1) methods or criteria for identifying suspected fraud cases;
(2) methods for investigating these cases; and, (3) procedures,
developed in cooperation with legal authorities, for referring suspected
fraud cases to law enforcement officials (42 CFR parts 455, 456,
and 1002).
Suspected fraud
should be referred to the State Medicaid Fraud Control Units (42
CFR part 1007).
The State Medicaid
agency must establish and use written criteria for evaluating the
appropriateness and quality of Medicaid services. The agency must
have procedures for the ongoing post-payment review, on a sample
basis, of the need for and the quality and timeliness of Medicaid
services. The State Medicaid agency may conduct this review directly
or may contract with a PRO.
Audit Objectives
- To determine whether the State has established and implemented
procedures to: (1) safeguard against unnecessary utilization of
care and services, including long term care institutions; (2) identify
suspected fraud cases; (3) investigate these cases; and, (4) refer
those cases with sufficient evidence of suspected fraud cases to
law enforcement officials.
Suggested
Audit Procedures
a. Obtain and
evaluate the adequacy of the procedures used by the State Medicaid
agency to conduct utilization reviews and identifying suspected
fraud.
(1) Consider
the qualifications of the personnel conducting the reviews and identifying
suspected fraud. Ascertain that the individuals possess the necessary
skill or knowledge by considering the following: (1) professional
certification, license, or specialized training; (2) the reputation
and standing of licensed medical professionals in the view of peers;
and, (3) experience in the type of tasks to be performed.
(2) Consider
the personnel performing the utilization review and identifying
suspected fraud are sufficiently organized outside the control of
other Medicaid operations to objectively perform their function.
(3) Ascertain
if the sampling plan implemented by the State Medicaid agency or
the PRO was properly designed and executed.
b. Test a sample
of the cases examined by State Medicaid agency or the PRO and ascertain
if such examinations were in accordance with the agency's procedures.
c. Test a sample
of the identified suspected cases of fraud and ascertain if the
agency took appropriate steps to investigate and, if appropriate,
make a referral.
d. Based on
the above procedures, consider the degree of reliance that can be
placed on the utilization review and identification of suspected
fraud in performing tests under Sections A, B, and E.
2. Inpatient
Hospital and Long-Term Care Facility Audits
Compliance
Requirement - The State Medicaid agency pays for inpatient hospital
services and long-term care facility services through the use of
rates that are reasonable and adequate to meet the costs that must
be incurred by efficiently and economically operated providers.
The State Medicaid agency must provide for the filing of uniform
cost reports for each participating provider. These cost reports
are used to establish payment rates. The State Medicaid agency must
provide for the periodic audits of financial and statistical records
of participating providers. The specific audit requirements will
be established by the State Plan (42 CFR section 447.253).
Audit Objectives
- To determine whether the State Medicaid agency performed inpatient
hospital and long-term care facility audits as required.
Suggested
Audit Procedures
a. Review the
State Plan and State Medicaid agency operating procedures and document
the types of audits performed (e.g., desk audits, field audits),
the methodology for determining when audits are conducted, and the
objectives and procedures of the audits.
b. Through
examination of documentation, ascertain that the sampling plan was
carried out as planned.
c. Select a
sample of audits and ascertain if the audits were in compliance
with the State Medicaid agency's audit procedures.
d. Based on
the above, consider the degree of reliance that can be placed on
the inpatient hospital and long term care facility audits in performing
tests under Sections A, B, and E.
3. ADP Risk
Analysis and System Security Review
Compliance
Requirement - State agencies must establish and maintain a program
for conducting periodic risk analyses to ensure that appropriate,
cost effective safeguards are incorporated into new and existing
systems. State agencies must perform risk analyses whenever significant
system changes occur. State agencies shall review the ADP system
security installations involved in the administration of HHS programs
on a biennial basis. At a minimum, the reviews shall include an
evaluation of physical and data security operating procedures, and
personnel practices. The State agency shall maintain reports on
its biennial ADP system security reviews, together with pertinent
supporting documentation, for HHS onsite reviews (45 CFR section
95.621).
Audit Objective
- To determine whether the State Medicaid agency has performed the
required ADP risk analyses and system security reviews.
Suggested
Audit Procedures
a. Review the
State Medicaid agency's policies and procedures and document the
frequency, timing, and scope of ADP security reviews. This should
include any reviews following Statement on Auditing Standards No.
70 (SAS 70) which may have been performed on outside processors.
b. Consider
the appropriateness and extent of reliance on such reviews based
on the qualifications of the personnel performing the risk analyses
and security reviews and their organizational independence from
the ADP systems.
c. Review the
work performed during the most recent risk analysis and security
review.
d. Based on
the above, consider the degree of reliance that can be placed on
the ADP Risk Analysis and System Security Reviews in performing
tests under Sections A, B, and E.
4. Provider
Eligibility
Compliance
Requirement - In order to receive Medicaid payments, providers of
medical services furnishing services must be licensed in accordance
with Federal, State, and local laws and regulations to participate
in the Medicaid program (42 CFR sections 431.107 and 447.10; and
section 1902(a)(9) of the Social Security Act) and the providers
must make certain disclosures to the State (42 CFR subpart B).
Audit Objective
- To determine whether providers of medical services are licensed
to participate in the Medicaid program in accordance with Federal,
State, and local laws and regulations, and whether the providers
have made the required disclosures to the State.
Suggested
Audit Procedures
a. Obtain an
understanding of the State plan's provisions for licensing and entering
into agreements with providers.
b. Select a
sample of providers receiving payments and ascertain if:
(1) The provider
is licensed in accordance with the State Plan.
(2) The agreement
with the provider complies with the requirements of the State Plan,
including the disclosure requirements of 42 CFR 455 subpart B.
5. Provider
Health and Safety Standards
Compliance
Requirement - Providers must meet the prescribed health and safety
standards for hospital, nursing facilities, and ICF/MR (42 CFR part
442). The standards may be modified in the State plan.
Audit Objective
- To determine whether the State ensures that hospitals, nursing
facilities, and ICF/MR that serve Medicaid patients meet the prescribed
health and safety standards.
Suggested
Audit Procedures
a. Obtain an
understanding of the State Plan provisions which ensure that payments
are made only to institutions which meet prescribed health and safety
standards.
b. Select a
sample of payments for each provider type (i.e., hospitals, nursing
facilities, and ICF/MR) and ascertain if the State Medicaid agency
has documentation that the provider has met the prescribed health
and safety standards.
6. Managed
Care
Compliance
Requirement - A State may obtain a waiver of statutory requirements
in order to develop a system that more effectively addresses the
health care needs of its population. A waiver may involve the use
of a program of managed care for selected elements of the client
population or allow the use of program funds to serve specified
populations that would be otherwise ineligible (Sections 1115 and
1915 of the Social Security Act).
Audit Objective
- To determine whether the State is operating managed care in
compliance with the approved State plan waiver.
Suggested
Audit Procedures
a. Obtain an
understanding of the State plan's managed care waiver.
b. Perform
tests to ascertain if the State has a system to handle beneficiary
complaints of not receiving necessary care and provider complaints
of not receiving payments for services provided to Medicaid recipients.
c. Perform
tests to ascertain if the State has a system to ensure beneficiaries
have adequate access to health care from managed care organizations
which are being paid premiums on the beneficiaries' behalf.
DEPARTMENT
OF HEALTH AND HUMAN SERVICES
CFDA 93.914
HIV EMERGENCY RELIEF PROJECT GRANTS
CFDA 93.915
HIV EMERGENCY RELIEF FORMULA GRANTS
I. PROGRAM
OBJECTIVES
The objective
of this program is to improve access to a comprehensive continuum
of high-quality community-based primary medical care and support
services in metropolitan areas that are disproportionately affected
by the incidence of Human Immunodeficiency Virus (HIV)/Acquired
Immune Deficiency Syndrome (AIDS). The statute refers to both persons
infected with HIV and those who have clinically defined AIDS. These
terms are used interchangeably in this compliance supplement but
refer to this total universe of eligible individuals.
Emergency financial
assistance, in the form of formula-based funding and supplemental
project-based funding, is provided to eligible metropolitan
areas (EMAs) to develop, organize, and operate health and support
services programs for infected individuals and their care givers.
The supplemental grants are discretionary awards and are awarded,
following competition, to EMAs that demonstrate severe need beyond
that met through the formula award. They must also demonstrate the
ability to use the supplemental amounts quickly and cost-effectively.
Other criteria, contained in annual application guidance documents,
may also apply. All EMAs currently receiving formula assistance
are also receiving supplemental assistance.
Beginning in
fiscal year (FY) 1998, these two programs will be combined in the
CFDA as 93.914, HIV Emergency Relief Project and Formula Funding.
II. PROGRAM
PROCEDURES
Administration
The Health
Resources and Services Administration (HRSA), a component of the
Department of Health and Human Services, administers the HIV emergency
relief programs. HRSA uses data reported to and confirmed by the
Centers for Disease Control and Prevention (CDC) to determine eligibility
(i.e., any metropolitan area for which there has been reported to
CDC a cumulative total of more than 2,000 cases of AIDS for the
most recent five calendar years for which data are available) and
to establish the formula for allocation of funds. A metropolitan
area is not eligible if it does not have an overall population of
500,000 or more unless it was eligible for FY 1995 or any prior
fiscal year. Geographic boundaries are those that were in effect
for FY 1994. A metropolitan area that was eligible in FY 1996 is
an eligible area for FY 1997 and each subsequent fiscal year (42
USC 300ff-11(c) and (d)).
At least fifty
percent of the appropriated amount (and an amount for subsequent
adjustment, if necessary, to ensure funding levels consistent with
the baseline year, i.e., FY 1995) is made available for the EMAs'
formula allocation and the remainder is retained by HRSA for award
as discretionary supplemental "project" assistance on the basis
of "severe need" and other factors. Since FY 1998, funding of the
EMAs is on the basis of a single application and a combined award
is made.
Funds are made
available to the chief elected official of the city or urban county
that administers the public health agency that provides outpatient
and ambulatory services to the greatest number of individuals with
AIDS in the EMA in accordance with statutory requirements and program
guidelines. Day-to-day responsibility for the grant is ordinarily
delegated to the jurisdiction's public health department, and some
administrative functions may be outsourced to a private entity.
The chief elected official of the EMA is also required to establish
or designate an AIDS health services planning council, which carries
out a planning process, coordinating with other State, local and
private planning and service organizations, and establishes the
priorities for allocating funds.
Consistent
with funding and service priorities established through the public
planning process, the EMA uses the funds to provide direct assistance
to public entities or private non-profit or for-profit entities
to deliver or enhance HIV/AIDS-related outpatient and ambulatory
health and support services, including case management, substance
abuse treatment and mental health treatment; comprehensive treatment
services, including treatment, education, and prophylactic treatment
for opportunistic infections; inpatient case management services
that prevent unnecessary hospitalization or that expedite discharge,
as medically appropriate, from inpatient facilities; and, within
established limits, for associated administrative activities. These
administrative activities include EMA oversight of service provider
performance and adherence to their subgrant or contractual obligations.
Most of these service providers are non-profit organizations.
Source of
Governing Requirements
These programs
are authorized under Title I of the Ryan White Comprehensive AIDS
Resources Emergency (CARE) Act of 1990, Public Law 101-381, as amended,
which is codified at 42 USC 300ff-11 - 300ff-17. There are no program
regulations specific to these programs.
III. COMPLIANCE
REQUIREMENTS
In developing
the audit procedures to test compliance with the requirements for
a Federal program, the auditor should first look to Part 2, Matrix
of Compliance Requirements, to identify which of the 14 types of
compliance requirements described in Part 3 are applicable and then
look to Parts 3 and 4 for the details of the requirements.
A. Activities
Allowed or Unallowed
1. Funds may
be used to provide medical treatment and support services for individuals
with HIV/AIDS (42 USC 300ff-78).
2. Consistent
with planning council priorities, funds may be used to deliver or
enhance HIV/AIDS-related (a) outpatient and ambulatory health and
support services, including case management, substance abuse treatment
and mental health treatment, (b) comprehensive treatment services,
including treatment education, and prophylactic treatment for opportunistic
infections, for individuals and families with HIV disease, and (c)
inpatient case management services that prevent unnecessary hospitalization
or expedite discharge, as medically appropriate, from inpatient
facilities (42 USC 300ff-14(b)(1)).
3. Funds may
be used for the operation of an HIV health services planning council
established by the grantee, including: staff support to the council;
costs incurred by members of the council as a result of participation
in meetings and other activities, including out-of pocket expenses
(e.g., transportation and meals); costs associated with conducting
needs assessment, plan development and publicizing council activities;
and implementation of grievance procedures (42 USC 300ff-12(b)).
4. The EMA
may use funds for routine grant administration and monitoring activities,
including, but not limited to, the development of applications under
this program, the receipt and disbursal of program funds, the establishment
of accounting systems, the preparation of required programmatic
and financial reports, and for all activities associated with the
grantee's selection, award, and administration of contracts under
the grant (42 USC 300ff-14(e)(2)).
5. Funds may
be used for service provider (also referred to as first-line entities,
including first-tier contractors) administrative activities, including
normal overhead, management and oversight of specific projects,
and other program support, such as quality control and quality assurance
(42 USC 300ff-14(e)(3)).
6. The EMA
may use funds to support program activities that are not service-
oriented or administrative in nature, e.g., capacity building, technical
assistance, program evaluation, and assessment of service delivery
patterns, if they are established as priorities by the planning
council and meet the requirements of 42 USC 300ff-12(b)(4) (A) and
(E).
7. Funds may
be used for outreach programs that have as their principal purpose
identifying people with HIV disease so they become aware of and
may be enrolled in care and treatment services, and informing low-income
individuals with HIV disease of the availability of services. Funds
may not be used for programs whose primary purpose is to target
the general public to increase broad public awareness about HIV
services, or programs that exclusively promote HIV counseling and
testing and/or prevention education (42 USC 300ff-15(a)(5)(C)).
8. Funds may
not be used to make payment for any item or service if payment has
already been made or can reasonably be expected to be made under
any State compensation program, under an insurance policy or any
Federal or State health benefits program, or by an entity that provides
health services on a pre-paid basis (42 USC 300ff-15(a)(4)).
9. Funds may
not be used to purchase or improve land or to purchase, construct
or make permanent improvement to any building. Minor remodeling
is allowed (42 USC 300ff-14(f)).
10. Funds may
not be used to make cash payments to recipients of services; however,
vouchers which may be exchanged only for a specific commodity or
service, such as food or transportation or similar programs, may
be provided where direct provision of the service is not possible
or effective (42 USC 300ff-14(f)).
11. Funds may
not be used to provide individuals with hypodermic needles or syringes
(42 USC 300ff-1).
12. Funds may
not be used for programs or to develop materials designed to promote
or encourage intravenous drug use or sexual activity (42 USC 300ff-78).
E. Eligibility
1. Eligibility
for Individuals
Eligible beneficiaries
are individuals or families of individuals with HIV/AIDS. To the
maximum extent practicable, services are to be provided to eligible
individuals regardless of their ability to pay for the services
and their current or past health condition. Services to non-infected
individuals must have, at least, an indirect benefit to a person
with HIV/AIDS (42 USC 300ff-14(b) and 15(a)(5)(A)).
2. Eligibility
for Groups of Individuals or Area of Service Delivery - Not
Applicable
3. Eligibility
of Subrecipients
The EMA may
make funds available to public (including Department of Veterans
Affairs' facilities) or private non-profit entities or private for-profit
entities, if they are the only available providers of quality HIV
care in the area. Eligible subrecipients include hospitals, community-based
organizations, hospices, ambulatory care facilities, community health
centers, migrant health centers, and homeless health centers (42
USC 300ff-14(b)(2)).
G. Matching,
Level of Effort, Earmarking
1. Matching
- Not applicable
2.1 Level
of Effort - Maintenance of Effort
Each political
subdivision within the metropolitan area is required to maintain
its level of expenditures for HIV-related services to individuals
with HIV disease at a level equal to its level of such expenditures
for the preceding fiscal year. Political subdivisions within the
EMA may not use funds received under the HIV grants to maintain
the required level of HIV/AIDS-related services (42 USC 300ff-15(a)(1)(B))
and (C)).
2.2 Level
of Effort - Supplement Not Supplant - Not Applicable
3. Earmarking
a. An amount
not less than the percentage represented by the ratio of infants,
women, and children with AIDS in the population of the metropolitan
area to the metropolitan area's overall population with AIDS is
to be spent on services to these populations (42 USC 300ff-14(b)(3)).
b. Not more
than five percent of the amounts awarded to the EMA may be used
for administration at that level. Program support and planning council
support are not considered administration for purposes of this limitation.
If the EMA contracts with a third party for the performance of any
part of its administrative activities, the five percent limitation
applies to the combined total of administrative expenditures by
the EMA and the contractor(s) (42 USC 300ff-14(e)).
c. Not more
than 10 percent, in the aggregate, of amounts allocated by
the EMA to first-line entities may be used for administrative expenses
(42 USC 300ff-14(e)).
H. Period
of Availability of Federal Funds
Funds are available
for the budget period designated on the Notice of Grant Award. Funds
carried forward from prior years may not be used for administration.
HRSA may reduce the following year's award by the amount of unobligated
grant funds reported by the EMA in its Financial Status Report
(42 USC 300ff-13(a)(3)(D)).
L. Reporting
1. Financial
Reporting
a. SF-269,
Financial Status Report - Applicable
b. SF-270,
Request for Advance or Reimbursement - Not Applicable
c. SF-271,
Outlay Report and Request for Reimbursement for Construction
Program - Not Applicable
d. SF-272,
Federal Cash Transactions Report - Payments under this program
are made by the Department of Health and Human Services, Payment
Management System. Reporting equivalent to the SF-272 is accomplished
through the Payment Management System and is evidenced by the PMS
272-E, Major Program Statement.
2. Performance
Reporting - Not Applicable
3. Special
Reporting
Annual Administrative
Report (AAR) (OMB No.0915-0166). Aggregate provider-level data
required from each direct service provider. These reports are currently
provided to the EMA electronically or in hard copy and may be submitted
to HRSA in a similar manner (e.g., the subrecipient (service provider)
submits the report to the pass-through entity (EMA), which in turn
submits the reports to the Federal agency (HRSA)). The reporting
entity has the option of completing the reports on the basis of
"all clients receiving a service eligible for Title I (and Title
II--HIV Care Formula Grants, 93.917) funding" or "only clients receiving
service funded with Title I or II funding." If those "funded" is
the reporting basis, the reporting entity would be expected to have
a tracking system to develop this data.
Key Line
Items across an EMA's reporting entities are:
a. Part 4:
Client Information:
(1) Number
of clients (unduplicated)
(2) Number of new clients served
b. Part 5,
Services Provided/Clients Served - Number of visits for each of
the following types of office-based health care:
(1) Medical
care
(2) Dental care
(3) Mental health services
(4) Substance abuse services
(5) Rehabilitation services
(6) Face-to-face case management encounters
c. Part 6,
Fiscal Information - Total HIV services funding by source:
(1) Title I
CARE
(2) Title II CARE
(3) Other CARE Act funding
(4) Other Federal funding (exclusive of Medicare and Medicaid)
M. Subrecipient
Monitoring
EMAs are required
to establish policies in the areas of verification and documentation
of client eligibility, require that service providers follow those
policies, and oversee the implementation by service providers (42
USC 300ff-14(b) and (e)(2)(B).
DEPARTMENT
OF HEALTH AND HUMAN SERVICES
CFDA 93.959
BLOCK GRANTS FOR PREVENTION AND TREATMENT OF SUBSTANCE ABUSE
I. PROGRAM
OBJECTIVES
The objective
of the Substance Abuse Prevention and Treatment (SAPT) Block Grant
Program is to provide funds to States, territories, and one Indian
Tribe for the purpose of planning, carrying out and evaluating activities
to prevent and treat Substance Abuse (SA) and other related activities
as authorized by the statute.
The SAPT Block
Grant is the primary tool the Federal government uses to fund State
SA prevention and treatment programs. While the SAPT Block Grant
provides Federal support to addiction prevention and treatment services
nationally, it empowers the States to design solutions to specific
addiction problems that are experienced locally.
II. PROGRAM
PROCEDURES
Administration
and Services
The Substance
Abuse and Mental Health Services Administration (SAMHSA), an operating
division of the Department of Health and Human Services (HHS), administers
the block grant program. For purposes of this guidance, the term
"State" includes the 50 States, the District of Columbia, American
Samoa, Guam, the Marshall Islands, the Federated States of Micronesia
, the Commonwealth of the Northern Marianas, Palau, the Commonwealth
of Puerto Rico, the U.S. Virgin Islands, and the Red Lake Band of
Chippewa Indians. The States generally subaward funds for the provision
of services to public and non-profit organizations. Service providers
may include for-profit organizations but for-profits may not receive
financial assistance.
Examples of
SAPT activities are:
a. Alcohol
Treatment and Rehabilitation - Direct services to patients experiencing
primary problems for alcohol, such as outreach, detoxification,
outpatient counseling, residential rehabilitation, hospital based
care (not inpatient hospital services), abuse monitoring, vocational
counseling, case management, central intake, and program administration.
b. Drug
Treatment and Rehabilitation - Direct services to patients experiencing
primary problems with illicit and licit drugs, such as outreach,
detoxification, methadone maintenance and detoxification, outpatient
counseling, residential rehabilitation, including therapeutic communities,
hospital based care (not inpatient hospital services), vocational
counseling, case management central intake, and program administration.
c. Primary
Prevention Activities - Education, counseling, and other activities
designed to reduce the risk of substance abuse.
The SAPT funds
are allocated to the States according to a formula legislated by
Congress. States may then distribute these funds to cities, counties,
or service providers within their jurisdictions based on need. Of
the SAPT funds dispensed to each State annually, Congress has specified
that not less than 35% will be expended for prevention and treatment
activities relating to alcohol, not less than 35% will be expended
for prevention and treatment activities related to other drugs,
and not less than 20% for programs for individuals who do not require
treatment for substance abuse. The programs should (a) educate and
counsel the individuals on such abuse and (b) provide for activities
to reduce the risk of such abuse by the individuals. SAPT Block
Grant statutory "set asides" were established to fund programs targeting
special populations, such as services for women, especially pregnant
and postpartum women and their children, and, in certain States,
for screening for human immunodeficiency virus (HIV).
State Plan
The State must
submit to SAMHSA for approval, an annual application which includes
a State plan for SA prevention and treatment services objectives
described above and signed assurances required by the Act and implementing
regulations. The entire application, including the plan, must be
reviewed by SAMHSA to ensure that all of the requirements of the
law and regulations are met.
The State plan
addresses how the State intends to comply with the various requirements
of Title XIX, Part B, Subparts II and III of the Public Health Service
Act (42 USC 300x) and its program objectives and specific allocations
by: (1) conducting State and local demand and need assessments;
(2) establishing statewide prevention and treatment improvement
plans with specific multi-year goals for narrowing identified service
gaps, implementing training efforts, and fostering coordination
among SA treatment, primary health care, and human service agencies;
and (3) addressing human resource requirements, clinical standards
and identified treatment improvement goals, and ensuring coordination
of all health and human services for addicted individuals.
The State shall
make the plan public within the State in such a manner as to facilitate
comment from any person (including any Federal or other public agency)
during development of the plan (including any revisions) and after
submission of the plan to SAMHSA.
Source of
Governing Requirements
This program
is authorized under Title XIX, Part B, Subparts II and III of the
Public Health Service Act (42 USC 300x). Implementing regulations
are published at 45 CFR part 96. Those regulations include general
administrative requirements for the covered block grant programs
(in lieu of either 45 CFR parts 74 (OMB Circular A-110) and 92 (A-102
Common Rule)). Requirements specific to SAPT are in 45 CFR sections
96.120 through 96.137. In addition, grantees are to administer their
SAPT programs according to the plan which they submitted to SAMHSA.
As discussed
in Appendix I of this Supplement, Federal Programs Excluded from
the A-102 Common Rule, States are to use the fiscal policies that
apply to their own funds in administering SAPT. Procedures must
be adequate to assure the proper disbursal of and accounting for
Federal funds paid to the grantee, including procedures for monitoring
the assistance provided (45 CFR section 96.30).
III. COMPLIANCE
REQUIREMENTS
In developing
the audit procedures to test compliance with the requirements for
a Federal program, the auditor should first look to Part 2, Matrix
of Compliance Requirements, to identify which of the 14 types of
compliance requirements described in Part 3 are applicable and then
look to Parts 3 and 4 for the details of the requirements.
A. Activities
Allowed or Unallowed
1. The State
shall not use grant funds to provide inpatient hospital services
except when it is determined by a physician that: (a) the primary
diagnosis of the individual is SA and the physician certifies this
fact; (b) the individual cannot be safely treated in a community
based non-hospital, residential treatment program; (c) the service
can reasonably be expected to improve an individual's condition
or level of functioning; and (d) the hospital based SA program follows
national standards of SA professional practice. Additionally, the
daily rate of payment provided to the hospital for providing the
services to the individual cannot exceed the comparable daily rate
provided for community based non-hospital residential programs of
treatment for SA and the grant may be expended for such services
only to the extent that it is medically necessary (i.e., only for
those days that the patient cannot be safely treated in a residential
community based program) (42 USC 300x-31(a) and (b); 45 CFR sections
96.135(a)(1) and (c))
2. Grant funds
may be used for loans from a revolving loan fund for provision of
housing in which individuals recovering from alcohol and drug abuse
may reside in groups. Individual loans may not exceed $4000 (45
CFR section 96.129).
3. Grant funds
shall not be used to make cash payments to intended recipients of
health services (42 USC 300x-31(a); 45 CFR sections 96.135(a)(2)).
4. Grant funds
shall not be used to purchase or improve land, purchase, construct,
or permanently improve (other than minor remodeling) any building
or any other facility, or purchase major medical equipment. The
Secretary may provide a waiver of the restriction for the construction
of a new facility or rehabilitation of an existing facility, but
not for land acquisition (42 USC 300x-31(a); 45 CFR sections 96.135(a)(3)
and (d)).
5. The State
shall not use grant funds to satisfy any requirement for the expenditure
of non-Federal funds as a condition for the receipt of Federal funding
(42 USC 300x-31(a); 45 CFR section 96.135(a)(4)).
6. Grant funds
may not be used to provide financial assistance (i.e., a subgrant)
to any entity other than a public or non-profit entity. A State
is not precluded from entering into a procurement contract for services,
since payments under such a contract are not financial assistance
to the contractor (42 USC 300x-31(a); 45 CFR section 96.135 (a)(5)).
7. The State
shall not expend grant funds to provide individuals with hypodermic
needles or syringes so that such individuals may use illegal drugs,
unless the Surgeon General of the Public Health Service determines
that a demonstration needle exchange program would be effective
in reducing drug abuse and the risk that the public will become
infected with the etiologic agent for AIDS (42 USC 300ee-5; 45 CFR
section 96.135 (a)(6)).
8. Grant funds
may not be used to enforce State laws regarding sale of tobacco
products to individuals under age of 18, except that grant funds
may be expended from the primary prevention setaside of SAPT under
45 CFR section 96.124(b)(1) for carrying out the administrative
aspects of the requirements such as the development of the sample
design and the conducting of the inspections (45 CFR section 96.130
(j)).
B. Allowable
Costs/Cost Principles
As discussed
in Appendix I of this Supplement, Federal Programs Excluded from
the A-102 Common Rule, SAPT is exempt from the provisions of OMB
cost principles circulars. State cost principles requirements apply
to SAPT.
G. Matching,
Level of Effort, Earmarking
1. Matching
- Not Applicable
2. Level
of Effort
a. The State
shall for each fiscal year maintain aggregate State expenditures
for authorized activities by the principal agency at a level that
is not less than the average level of such expenditures maintained
by the State for the two State fiscal years preceding the fiscal
year for which the State is applying for the grant. The "principal
agency" is defined as the single State agency responsible for planning,
carrying out and evaluating activities to prevent and treat SA and
related activities (42 USC 300x-30; 45 CFR sections 96.121 and 96.134).
b. The State
must maintain expenditures at not less than the calculated fiscal
year 1994 base amount for SA treatment services for pregnant women
and women with dependent children. The fiscal year 1994 base amount
was reported in the State's fiscal year 1995 application (42 USC
300x-27; 45 CFR section 96.124(c)).
c. Designated
States shall maintain expenditures of non-Federal amounts for HIV
services at a level that is not less than the average level of such
expenditures maintained by the State for the 2-year period proceeding
the first fiscal year for which the State receives such a grant.
A designated State is any State whose rate of cases of HIV is 10
or more such cases per 100,000 individuals (as indicated by the
number of such cases reported to and confirmed by the Director of
the Centers for Disease Control for the most recent calendar year
for which the data are available.) (42 USC 300x-30; 45 CFR sections
96.128 (b) & (f)).
d. The State
shall maintain expenditures of non-Federal amounts for tuberculosis
services at a level that is not less than an average of such expenditures
maintained by the State for the 2 year period preceding the first
fiscal year for which the State receives such a grant (42 USC 300x-24;
45 CFR section 96.127).
3. Earmarking
a. The State
shall expend not less than 35 percent for prevention and treatment
activities regarding alcohol (42 USC 300x-22; 45 CFR section 96.124
(a)(1)).
b. The State
shall expend not less than 35 percent for prevention and treatment
activities regarding other drugs (42 USC 300x-22; 45 CFR section
96.124 (a)(2)).
c. Of the amount
earmarked for alcohol and other drugs prevention and treatment activities
(III.G.3.a and b above), the State shall expend not less than 20
percent of SAPT for primary prevention programs for individuals
who do not require treatment of SA. The programs should educate
and counsel the individuals on such abuse and provide for activities
to reduce the risk of such abuse by the individuals (42 USC 300x-22;
45 CFR sections 96.124 (b)(1) and 96.125).
d. Designated
States shall expend not less than 2 percent and not more than 5
percent of the award amount to carry out one or more projects to
make available to individuals early intervention services for HIV
disease at the sites where the individuals are undergoing SA treatment.
If the State carries out two or more projects, the State will carry
out one such project in a rural area of the State unless the Secretary
waives the requirement (42 USC 300x-24).
e. The State
may not expend more than 5 percent of the grant to pay the costs
of administering the grant (42 USC 300x-31; 45 CFR section 96.135
(b)(1)).
f. The State
may not expend grant funds for providing treatment services in penal
or correctional institutions in an amount more than that expended
for such programs by the State for fiscal year 1991 (42 USC 300x-31;
45 CFR section 96.135(b)(2)).
H. Period
of Availability of Federal Funds
The State is
required to obligate all of the funds awarded during the fiscal
year of the award. Amounts obligated by the State which remain unexpended
at the end of the fiscal year for which the amounts were awarded
shall remain available until the end of the succeeding fiscal year
(42 USC 300x-62).
If a State
has terminated or reduced the amount of funds awarded to a subrecipient
for failure of the subrecipient to comply with the terms upon which
the funds were conditioned, the amounts involved shall be available
for reobligation by the State through September 30 of the fiscal
year following the fiscal year for which the amounts were paid to
the State and any such amounts that are obligated by the State should
be available for expenditure through such date (42 USC 300x-62(b)).
L. Reporting
1. Financial
Reporting - Not Applicable
2. Performance
Reporting - Not Applicable
3. Special
Reporting
Substance
Abuse Prevention and Treatment (SAPT) Block Grant Application -
Form 06B, Summary of Tobacco Results by State Geographic Sampling
Unit (OMB No. 0930-0080) - This form is part of the overall
application for the SAPT Block Grant and it summarizes the tobacco
inspection activities.
Key Line
Items - The following line items contain critical information:
1. (3) No.
of Outlets Randomly Inspected.
2. (4) No.
of Outlets Found in Violation During Random Inspections.
N. Special
Test and Provisions
1. Independent
Peer Reviews
Compliance
Requirements - The State must provide for independent peer reviews
which access the quality, appropriateness, and efficacy of treatment
services provided to individuals. At least 5 percent of the entities
providing services in the State shall be reviewed. The entities
reviewed shall be representative of the entities providing the services.
The State shall ensure that the peer reviewers are independent by
ensuring that the peer review does not involve reviewers reviewing
their own programs and the peer review is not conducted as part
of the licensing or certification process (42 USC 300x-53; 45 CFR
section 96.136).
Audit Objectives
- Determine whether (1) the required number of entities were peer
reviewed, (2) the selection of entities for peer review was representative
of entities providing services, (3) the State ensured that the peer
reviewers were independent.
Suggested
Audit Procedures
1. Ascertain
the number of entities providing treatment services in the State.
2. Ascertain
if the number of entities reviewed was at least 5 percent of the
entities providing treatment services.
3. Ascertain
if the selection of entities for peer review was representative
of entities providing services.
4. Select a
sample of peer reviews and ascertain if the State ensured that the
peer reviewers were independent.
IV. OTHER
INFORMATION
As described
in Part 4, Social Services Block Grant (SSBG) program (CFDA 93.667),
Subpart III.A. Activities Allowed or Unallowed, a State may transfer
up to 10 percent of its annual allotment under SSBG to this and
six other block grant programs.
Amounts transferred
into this program are subject to the requirements of this program
when expended and should be included in the audit universe and total
expenditures of this program when determining Type A programs. On
the Schedule of Expenditures of Federal Awards, the amounts transferred
in should be shown as expenditures of this program when such amounts
are expended.
DEPARTMENT
OF HEALTH AND HUMAN SERVICES
CFDA 93.991
PREVENTIVE HEALTH AND HEALTH SERVICES BLOCK GRANT
IV. OTHER INFORMATION
This program
is not included in this Compliance Supplement; however, the following
information is included to alert the auditor to transfers from the
Social Services Block Grant (SSBG) program (CFDA 93.667), a program
which is included in this Supplement.
A State may
transfer up to 10 percent of its annual allotment under SSBG to
this and six other block grant programs for support of health services,
health promotion and disease prevention activities, low-income home
energy assistance, or any combination of these activities.
Amounts transferred
into this program are subject to the requirements of this program
when expended and should be included in the audit universe and total
expenditures of this program when determining Type A programs. On
the Schedule of Expenditures of Federal Awards, the amounts transferred
in should be shown as expenditures of this program when such amounts
are expended.
DEPARTMENT
OF HEALTH AND HUMAN SERVICES
CFDA 93.994
MATERNAL AND CHILD HEALTH SERVICES BLOCK GRANT TO THE STATES
IV. OTHER INFORMATION
This program
is not included in this Compliance Supplement; however, the following
information is included to alert the auditor to transfers from the
Social Services Block Grant (SSBG) program (CFDA 93.667), a program
which is included in this Supplement.
A State may
transfer up to 10 percent of its annual allotment under SSBG to
this and six other block grant programs for support of health services,
health promotion and disease prevention activities, low-income home
energy assistance, or any combination of these activities.
Amounts transferred
into this program are subject to the requirements of this program
when expended and should be included in the audit universe and total
expenditures of this program when determining Type A programs. On
the Schedule of Expenditures of Federal Awards, the amounts transferred
in should be shown as expenditures of this program when such amounts
are expended.
|