December 21, 2001

Department of Health and Family Services
Division of Children and Family Services



Area Administrators/Assistant Area Administrators
Bureau Directors
County Departments of Community Programs Directors
County Departments of Developmental Disabilities 
          Services Directors
County Departments of Human Services Directors
County Departments of Social Services Directors
Section Chiefs
Tribal Chairpersons/Human Services Facilitators


Susan Dreyfus


Federal IV-E Review


A review of the Title IV-E program in Wisconsin will be conducted by the U.S. Department of Health and Human Services the week of March 4, 2002. The review will examine the IV-E eligibility and reimbursability of a random sample of out-of-home care cases. This memo explains the IV-E review process, how local agencies will be involved if their cases are included in the sample, and issues affecting IV-E eligibility and reimbursability.

Federal Review Process

The federal government is conducting reviews of state Title IV-E programs, looking at the IV-E eligibility determination and the reimbursability of maintenance payments for children in out-of-home care. The federal review process is specified under 45 CFR 1356 and examines the IV-E eligibility determination and redeterminations for children, the reimbursability of specific periods of out-of-home care, and the licensing of providers to receive maintenance payments. The IV-E review is primarily fiscal in nature, examining whether states are accurately claiming IV-E funds and meeting federal requirements for IV-E reimbursement.

The federal review will specifically examine:

  • The IV-E eligibility determinations based on AFDC income, resources and deprivation requirements;

  • Judicial findings regarding contrary to the welfare;

  • Judicial findings regarding reasonable efforts to prevent removal and reasonable efforts to finalize the permanency plan;

  • Voluntary placement agreements;

  • Annual redeterminations of IV-E eligibility;

  • The reimbursability of placements during the review period; and

  • Licensing documentation, including background checks, for all providers used during the review period.

The review team, which will include both federal and state reviewers, will conduct an in-depth review of 80 cases drawn at random from the statewide out-of-home care caseload, as reported in the HSRS and WiSACWIS systems. The cases sampled include CHIPS, JIPS, Delinquents and Voluntary Placements for children who are IV-E eligible and reimbursable. The review will focus on the 6-month period of April 1, 2001 through September 30, 2001, but the eligibility of cases will be reviewed from the beginning of the out-of-home care episode that includes the April - September, 2001 period. The licensed status of providers used during the 6-month review period will also be examined.

The federal review will be conducted in Madison with local agency case files sent to the Madison central office for use by the review team. Case files need documentation of IV-E eligibility and compliance with IV-E case requirements such as court orders with appropriate and timely judicial findings. Provider licensing information must also be submitted for the review. Cases will be examined using the attached federal review instrument.

The review is the initial primary review for Wisconsin. Based on the review instrument, cases will be determined to be in compliance or in error. Missing information will result in the case being determined in error. If an error affects the IV-E reimbursement for a case, a case-specific disallowance for maintenance costs will be assessed along with the associated administrative costs for the case. Depending on the case, the disallowance can be for the entire out-of-home care episode and not limited to the 6-month review period. The error tolerance level for the initial review is 10 percent, so to be in compliance, the state must have 8 or fewer error cases. If the state has 9 or more error cases, the state would fail the initial review, which would result in the state being directed to take corrective action and having to submit a program improvement plan for federal approval.

If the state fails the initial review and corrective action is required, a secondary review would be conducted after one year with a larger sample of 150 cases. If both the number of error cases and disallowance amounts exceeds the 10 percent error tolerance level, a financial penalty would be assessed against the state. The disallowance amounts from the 150 case sample would be used to extrapolate a one-time disallowance penalty against the full state IV-E claim for maintenance and administrative costs for that year. This penalty, if imposed, would likely amount to several million dollars. A loss of federal IV-E funds of this magnitude would affect the funding available to support state allocations to local agencies for programs with IV-E funding.

Subsequent federal IV-E reviews will be conducted at 3-year intervals. The error tolerance level decreases to 5 percent for subsequent reviews.

Impact on Local Agencies

The sample of 80 cases and an oversample of 20 cases has been selected by the federal government using WiSACWIS caseload data for Milwaukee County and HSRS caseload data for the balance of the state. Milwaukee County cases account for 54% of the sample. All cases had at least one IV-E reimbursable maintenance payment during the period of April - September, 2001. Local agencies with cases included in the sample will be notified by letter later in December of the cases selected for the review. Local agencies will receive instructions regarding the information needed for cases.

County agencies will be contacted by Area Administration staff and Milwaukee agencies by Bureau of Milwaukee Child Welfare staff to make arrangements to review the cases in January. The Department of Health and Family Services (DHFS) staff will review the cases on site with agencies to collect information about the cases and ensure that the case files are complete. It is essential that case files are complete, including all court orders and documentation necessary for IV-E eligibility, so local agencies are encourage to review the files prior to the DHFS field staff review. The DHFS staff will compare the out-of-home care episode and payment history data for cases in WiSACWIS and HSRS with the case files for consistency. The DHFS staff will also work with local agencies to identify the providers used during the 6-month period and obtain licensing information for those providers.

To prepare cases for review, the DHFS staff will work with local agencies to create an eligibility packet for each case. The eligibility packet will include copies of eligibility forms and court orders that apply to the out-of-home care episode that will be reviewed for the case. The eligibility packet will be submitted to the Madison central office in January for analysis by DCFS central office and Maximus staff who will identify potential problems with cases. If additional documentation is necessary for cases, the DHFS staff will work with local agencies to obtain the necessary information.

Depending on the circumstances of cases, it may be necessary to work with the court system to obtain copies of signed court orders and copies of transcripts to clarify that contrary to the welfare and reasonable efforts judicial findings were appropriately made by the judge. For cases where the child or juvenile entered out-of-home care prior to March 27, 2000, it is permissible to use nunc pro tunc orders to document that the contrary to the welfare and the reasonable efforts findings were made. DCFS staff will work with the Director of State Courts Office and county circuit courts to assist in obtaining necessary court documents.

The full case file will be submitted by local agencies to the Madison central office by February 8th for the federal review. Files will be submitted using the existing process for Maximus review of county IV-E eligibility determinations. Case files will be returned to local agencies immediately after conclusion of the on-site review during the week of March 4, 2002. If local agencies have case activity requiring use of files during the four weeks files will be at the Madison central office, arrangements can be made to minimize the inconvenience for agencies.

Provider licensing information, including provider licenses and evidence of background checks, is also needed for the review. For family and treatment foster homes licensed by county agencies or the Bureau of Milwaukee Child Welfare, the DHFS staff will collect licensing information as case files are reviewed. For other foster homes, treatment foster homes licensed by child placing agencies, group homes and residential care centers, the DHFS staff will work with Bureau of Regulation and Licensing staff to obtain the necessary licensing information.

For each case selected for the review, local agencies will be asked to identify a contact person who can work with DHFS field staff on the case. DCFS central office and Maximus staff may contact the local persons as cases are reviewed to prepare cases for the federal review. DCFS also asks that the local contact persons be available during the week of March 4, 2002 in the event that the federal review team has questions about a case that require additional information from local agencies. All information about cases must be presented to the review team while they are on-site in the state, so questions will need to be resolved quickly.

Issues Affecting IV-E Eligibility and Reimbursability

To prepare for the federal review, DCFS had Maximus conduct a mock IV-E review in the Summer of 2001 using the federal review instrument. Over 500 cases were reviewed statewide, with a minimum of 3 cases for small counties and 143 cases for Milwaukee County. The mock review showed, adjusting for the caseload difference between Milwaukee County and the balance of state, that about 16% of the cases reviewed had questions or incomplete information that could result in a case error for the federal review.

For Milwaukee County, the mock review showed questions or incomplete information for 10% of the cases reviewed. Of these cases, 53% involved referrals from case workers to the eligibility unit regarding the relative for whom the IV-E eligibility determination is based, 20% involved court orders for continuation of voluntary placement agreements, and the remainder involved language in court orders or financial information. To address these issues, training has been provided to Milwaukee case workers regarding IV-E eligibility referrals and procedures regarding voluntary placements have been changed.

For the balance of state, the mock review showed questions or incomplete information for 30% of the cases reviewed. Of these cases, 29% lacked court orders with reasonable efforts language in the case files or the language was not timely, 25% had incomplete financial information or excessive income, 18% lacked orders with contrary to the welfare language in the case files or the language was not timely, and the remainder involved other issues such as voluntary placements and family deprivation. Forty-two counties had 112 cases with problems and follow-up contacts have been made with these counties to clarify questions regarding the cases and change the IV-E status as necessary. DCFS recently issued an updated IV-E eligibility and reimbursability policy handbook and conducted several regional IV-E policy training sessions for local agency staff.

The mock review shows Wisconsin is at risk of failing the IV-E review and the close assistance of local agencies will be needed to ensure that the files for sample cases are complete and explanations exist for issues that could result in case errors. The assistance of local agencies will be critical in helping the state to do as well as possible on the review.

Regional Contact:

Area Administrator

Central Office Contact:

John Tuohy
Office of Policy, Evaluation and Planning
1 W. Wilson, Street, Room 558
Madison, WI 53708
Phone: (608) 267-3832
Email: tuohyjo@dhfs.state.wi.us


Federal IV-E Review Instrument  (pdf 24 kb)   

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