January 6, 2005

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


Kitty Kocol


Federal IV-E Review


A secondary 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 May 2, 2005. 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 upcoming Federal review is necessary due to Wisconsin failing its primary review in March 2002 (reference DCFS INFO MEMO 2002-06). 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 150 cases drawn at random from the statewide out-of-home care caseload, as reported in the WiSACWIS system. 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, 2004 through September 30, 2004, but the eligibility of cases will be reviewed from the beginning of the out-of-home care episode open during the April - September, 2004 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 during the week of May 2, 2005 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 secondary 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.

After the secondary review if it is determined that Wisconsin is not in compliance and both the number of error cases and disallowance amount exceeds the 10 percent error tolerance level, a financial penalty would be assessed against the state. The disallowance amount 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 150 cases and an oversample of 30 cases will be selected by the federal government using WiSACWIS caseload data for the state. All cases had at least one IV-E reimbursable maintenance payment during the period of April - September 2004. On February 18, 2005, local agencies with cases included in the sample will be notified by letter of the cases selected for the review.

County agencies may be contacted by Area Administration staff and the Milwaukee ongoing case management agencies by the Bureau of Milwaukee Child Welfare prior to the Federal review. It is essential that case files are complete, including all court orders and documentation necessary for IV-E eligibility, so local agencies are encouraged to review the files.

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. 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 for the federal review. Files will be submitted by March 7, 2005 using the existing process for Maximus review of county IV-E eligibility determinations. Case files will be returned to local agencies by mid-May. If local agencies have case activity requiring use of files during the ten 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 early May 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.

Major Issues Affecting IV-E Eligibility and Reimbursability

Preparation for the review will focus on issues concerning Reasonable Efforts to achieve the goals of a Permanency Plan (REPP), court findings, proper application of legal removal policy, and avoidance of errors and/or gaps in foster care home licenses.

The March 2002 primary review shows that without the close assistance of local agencies Wisconsin is at risk of failing the IV-E review. Local agencies need 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:

David Timmerman
Office of Policy, Evaluation and Planning
1 W. Wilson, Street, Room 550
Madison, WI 53708
Phone: (608) 261-8895
Email: timmedj@dhfs.state.wi.us

The Department of Children and Families, protecting children, strengthening families, building communities.