STATE OF WISCONSIN
This memo is to inform county agencies of the results of the federal Title IV-E eligibility and reimbursability review of Wisconsin that took place during the week of March 4, 2002. Information about the IV-E review process was provided in DCFS Info Memo 2001-22, dated December 21, 2001.
A total of 80 cases were reviewed for the initial IV-E eligibility determination, the ongoing IV-E reimbursability of the out-of-home care episode, and licensing requirements for out-of-home care providers receiving payments. T he period reviewed was April 1, 2001 through September 30, 2001 and all of the 80 cases had at least one month of IV-E reimbursable foster care payments during that period. The review generally focused on the six-month period, except that initial eligibility was examined back to the beginning of the out-of-home episode. The cases were selected at random by the federal government from data files submitted by the state with 43 cases from Milwaukee County and 37 cases from 21 other counties, including five cases that originated with counties but were with the state adoption program during the review period. Twenty other cases from both Milwaukee and other counties were also selected as an over-sample, but these cases were not examined during the IV-E review. The vast majority of the cases reviewed were CHIPS cases, with some juvenile delinquent cases in the sample.
Of the 80 cases reviewed, 23 cases were determined to have a total of 29 errors relating to Title IV-E eligibility and reimbursability requirements. Of the cases with errors, 8 were from Milwaukee, three from the adoption program and 12 from other counties. Of the error cases, 18 cases had a single error and five cases had multiple errors. Specifically:
For the individual cases with errors, federal disallowances in the amount of $206,833 were computed based on the Title IV-E maintenance and administration costs claimed by the state to date for those cases. Of the disallowances, $112, 642 were maintenance costs and $94,191 were administration costs claimed based on time study results. The federal disallowances will be paid by reducing the upcoming quarterly IV-E claim submitted by the Department. The disallowances will reduce the overall amount of Title IV-E revenue on a one-time basis, which will affect the funds available for future support of the Title IV-E Incentive program, but will not have an ongoing impact on the Community Aids program or other programs funded with Title IV-E revenue. Prospectively, the initial eligibility errors and reimbursability errors, until corrected, will continue to reduce future Title IV-E revenue.
The Division, in collaboration with counties, will be required to implement a program improvement plan to improve compliance with Title IV-E eligibility and reimbursability requirements. The program improvement plan must be submitted for federal approval by June 2002 and the state will have one year to implement the improvements. Program improvement efforts are already underway, including broader use of the 2001model court forms with a specific format for the court to make the REPP finding, the updated IV-E eligibility handbook and training provided to county staff in fall 2001, and means to obtain REPP findings for cases with the adoption program. Additional improvement activities will need be undertaken by the Division and counties to further improve compliance with IV-E requirements.
Following the implementation of the program improvement plan, the state will be subject to a secondary IV-E review using a larger sample of 150 cases. The larger sample will result in the majority of counties in the state having at least one case in the secondary review. It is anticipated that this secondary review will take place in 2004 with the review period starting in 2003. Disallowances will be assessed for individual error cases and should both the number of error cases and the dollar amount of individual case disallowances in the secondary review exceed the 10% federal tolerance level, an additional IV-E financial penalty will be imposed on the state. This additional penalty, if assessed against the state, would be extrapolated based on the individual case disallowances and could exceed $10 million. Following the secondary review, subsequent federal IV-E reviews will be conducted every three years and the federal tolerance level for errors drops to 5% for subsequent reviews.
Correct determinations of IV-E eligibility and reimbursability are critical to protect Title IV-E revenue and minimize the potential for a financial penalty in the secondary review. Currently 30 counties statewide are participating in the centralized IV-E eligibility unit. None of the statewide error cases came from a county that participated in the centralized eligibility unit in 2001 during the review period and the one initial eligibility error in Milwaukee was for a case that entered care in 1996 prior to the Bureau of Milwaukee Child Welfare. This demonstrates that participation in the centralized eligibility unit plays a vital quality assurance role for IV-E eligibility determinations. As part of the program improvement plan, all counties should participate in the centralized eligibility unit. For the secondary IV-E review, recoupments will likely be made from counties for individual case disallowances and a proportionate share of any financial penalty from the secondary review, so participation in the centralized eligibility unit will reduce county exposure for such recoupments. Counties may also be directed to implement local quality assurance activities to ensure the accuracy and timeliness of actions necessary to establish IV-E eligibility and maintain reimbursability of cases.
Counties wanting to make arrangements to participate in the centralized eligibility unit should contact Sandy Palmgren. Bringing all counties into the centralized eligibility unit will require expansion of the unit capacity, which may affect the timing of when additional counties can begin participating.
The Division appreciates the cooperation of county agencies in submitting cases for the IV-E review. Many hours of staff effort went into preparing files and obtaining additional information for cases. The Division will work closely with county agencies to keep you informed as the program improvement plan is developed and implemented. I trust that the continued joint efforts of the Division and county agencies to improve compliance with Title IV-E eligibility and reimbursability requirements will be successful.