Sneak Preview: Appeals Board Upholds Rhode Island TANF Penalty

May 28, 2014 | By Jerry Ashworth | Post a Comment

xgran_bookshot(The following was excerpted from an article in the Federal Grants Management Handbook.) State agencies should be aware that they may face penalties if it is determined that they are violating Temporary Assistance for Needy Families program requirements for failing to manage data on participants, and even for failing to fully comply with corrective action plans to correct those violations.

The Department of Health and Human Services Departmental Appeals Board recently upheld an Administration on Children and Families penalty of about $1.7 million for fiscal year 2014 against the Rhode Island Department of Human Services because the department failed to adequately participate in the TANF income eligibility and verification system (IEVS) in 2003. Even though ACF informed the department in 2006 that it would not impose the penalty RIDHS complied with its own ACF-approved corrective action plan, ACF in 2013 determined the deficiencies still existed, and that it would continue to impose the penalty. RIDHS subsequently appealed to the appeals board, arguing that there was no basis for the penalty.

The TANF program requires each state to submit a plan outlining how they will conduct the program to be eligible for an annual State Family Assistance Grant (SFAG). In addition, states must meet program requirements though an IEVS, in which states exchange wage, benefit and other income data on recipients with other federal benefit programs. If a state fails to meet the IEVS requirements, it may be penalized up to 2 percent of its adjusted SFAG in the next fiscal year, unless the state demonstrates it has reasonable cause for the failure. TANF requires ACF to allow states to correct the failure through a corrective compliance plan, but if the state fails to correct the violation according to the plan, the penalty will be imposed, either in part or in full.

In June 2005, ACF notified that based on findings in a FY 2003 single audit report, the department would be subject to a $1.7 million penalty (2 percent of its adjusted SFAG for that year) because it failed to participate in IEVS, adding that the audit report disclosed “several instances where discrepancies resulted from IEVS data matches that had not been properly investigated or resolved and thus, may have had an impact in determining TANF eligibility and benefit amounts.” In response to the penalty, RIDHS submitted, and ACF accepted, a corrective action plan to improve performance by May 2006. ACF said it would use the department’s FY 2007 single audit to determine whether it achieved compliance.

In May 2013, ACF told RIDHS that, after reviewing the 2007 audit, it had determined that IEVS deficiencies still existed, and that the department was still subject to the FY 2003 penalty, which would be reduced from its SFAG for FY 2014.


Post a Comment

Your email is never shared. Required fields are marked *