Measuring Improper Authorizations for Payment in the Child Care Program:
Improper Authorization for Payment Data Collection Instructions [Approved August 31, 2007]

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II. Overview

The CCDF methodology for measuring improper authorizations for payment focuses on client eligibility and employs a case record review process to determine whether child care subsidies were properly authorized.

The CCDF methodology focuses on improper authorizations rather than actual payments because the Administration for Children and Families (ACF) believes that improper authorizations are the source for many improper payments. Eligibility and authorization are the first steps in the child care subsidy process and errors made at this stage in the process are likely to affect the administration of the entire program. An improper authorization could likely result in an improper payment

The case record review process is based on the CCDF methodology that was successfully implemented in two phases of error rate pilots tested by the Child Care Bureau (CCB) in partnership with States. These pilots showed that a client eligibility-focused methodology could be established to accommodate the flexibility in the State processes to determine eligibility and authorize subsidies. It was determined that these processes were consistent enough that a uniform national methodology that was practical for individual States to implement could be developed. This was important, as the policies and processes used for parents to apply for child care services—as well as the policies and processes used by States, Territories and Tribes to determine eligibility (including initial eligibility, periodic redeterminations, or change action)—are unique to each State.

This methodology enables States to determine errors as well as to identify the types and sources of these errors. The results will provide States with information that will be useful in developing corrective action plans to reduce future improper authorizations for payment and corresponding improper payments.

The CCDF error rate methodology includes the following action steps and timeline based on the FY 2008 reporting year that examines errors for the period of October 1, 2006 through September 30, 2007:

*(See Section IV – “Generating a Sample of Cases for Review”)

• In subsequent years, States adhere to the above timeline, relative to their reporting year. States submit Step 1 information prior to drawing the first sample and no later than October of the calendar year prior to the reporting year. States receive approval of the customized Record Review Worksheet prior to conducting case record reviews. States choosing to select sampling frames and conduct case record reviews throughout the 12 month review period are encouraged to submit information identified in Steps 1 and 4 in a timely manner to avoid unnecessary delays in implementing the methodology.