NPRM: Cooperative Arrangements
Oct. 19, 1988
Subj: Cooperative Arrangements
October 19, 1988
TO:STATE AGENCIES ADMINISTERING CHILD SUPPORT ENFORCEMENT PLANS UNDER TITLE IV-D OF THE SOCIAL SECURITY ACT AND OTHER INTERESTED INDIVIDUALS
ATTACHMENT:Attached are proposed regulations which set forth six provisions that must be contained in all cooperative arrangements between IV-D agencies and courts and law enforcement officials. The regulations also require that cooperative arrangements meet these criteria in order to be eligible for Federal financial participation. These requirements would be effective immediately for all new cooperative arrangements, and one year from the date of publication of the final regulations for existing arrangements.
REFERENCE:45 CFR 302.34, 303.107, 304.21 and 305.34.
PERIOD:Consideration will be given to comments received by December 5, 1988. Address comments to: Director, Office of Child Support Enforcement, Department of Health and Human Services, 370 L'Enfant Promenade, S.W. Washington, D.C. 20447, Attention: Director, Policy and Planning Division.
INQUIRIES TO:OCSE Regional Representatives.
Wayne A. Stanton
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Office of Child Support Enforcement
45 CFR Parts 302, 303, 304 and 305
Child Support Enforcement Program;
AGENCY: Office of Child Support Enforcement (OCSE), HHS.
ACTION: Notice of proposed rulemaking.
SUMMARY: This document proposes six provisions that must be contained in all cooperative arrangements between IV-D agencies and courts and law enforcement officials. It also requires that cooperative arrangements meet these criteria in order to be eligible for Federal financial participation. These requirements would be effective immediately for all new cooperative arrangements. States would have one year from publication of the final rule to comply with the proposed requirements for their existing arrangements.
DATES: Consideration will be given to comments received by December 5, 1988.
ADDRESS: Address comments to: Director, Office of Child Support Enforcement, Department of Health and Human Services, Room 2090 Switzer Building, 330 C Street, SW., Washington, DC 20201, Attention: Director, Policy and Planning Division. Comments will be available for public inspection Monday through Friday, 8:30 a.m. to 5:00 p.m., in Room 2090 of the Department's office at the above address.
FOR FURTHER INFORMATION CONTACT: Betsy Matheson, Policy Branch, OCSE (202) 252-5364.
State and local IV-D agencies enter into cooperative arrangements to obtain the assistance of courts and law enforcement agencies in carrying out the functions of the IV-D program: the location of absent parents, the establishment of paternity and support obligations and the collection and enforcement of those obligations.
Under the current regulation at 45 CFR 302.34, cooperative arrangements must be in the form of a written agreement and must contain certain criteria. These criteria include providing courts and law enforcement officials with pertinent information needed in locating absent parents, establishing paternity and securing support, including the immediate transfer of theinformation obtained form the State IV-A agency, pursuant to 45 CFR 235-70. Cooperative arrangements must also provide for assistance to the IV-D agency in carrying out the program and may relate to any other matters of common concern. Cooperative arrangements may include provisions for the investigation and prosecution of fraud directly related to paternity and child and spousal support and provisions to reimburse courts and law enforcement officials for their assistance.
In May of 1980, OCSE issued a publication that addressed the major considerations and elements of a cooperative arrangement as part of its "Techniques for Effective Management of Program Operations (TEMPO)" series. The TEMPO publication contains specific recommendations and sample language for use in the development of effective cooperative arrangements. However, it appears that many States have not used the TEMPO's recommendations when entering into cooperative arrangements and program performance may have been affected as a result.
Program audits and Regional Office reports indicate that some States do not ensure that the functions delegated under cooperative arrangements are carried out properly, efficiently and effectively. Since one third of all child support workers are employed through cooperrative arrangements, we believe that greater accountablility and control are necessary for arrangements between State or local IV-D agencies and other entities. Therefore, this proposed rule includes additional specifications for cooperative arrangements as a condition for Federal financial participation in the costs incurred under those arrangements.
Two separate surveys were conducted on cooperative arrangements - in 1984 and again in late 1987. In the initial 1984 survey, we solicited, both internally and from State IV-D directors, information and recommendations on the identification of problem areas and suggestions for improvements in the quality of cooperative arrangements. Copies of cooperative arrangements in effect in 1984 were obtained for comparison to those arrangements made after the initial survey. In late 1987, we analyzed arrangements made after the initial survey to determine if awareness of the problem and new informational tools for improving performance under cooperative arrangements were sufficient to improve the quality of the cooperative arrangements negotiated since 1984. That analysis indicated no measurable improvement in the quality of the cooperative arrangements.
Because there has been little voluntary improvement and strengthening of cooperative arrangements to ensure accountability and efficient and effective operation of the IV-D program, we believe more specific requirements based on those elements of cooperative arrangements recommended in the 1980 TEMPO are essential. These proposed requirements would improve the accountability of agencies providing IV-D services under cooperative arrangements and increase program cost effectiveness by ensuring that the delegated or contracted functions are carried out efficiently and effectively.
The proposed requirements would be effective upon publication of the final rule for new arrangements and one yearfrom publication of the final rule for existing arrangements. The delayed effective date for existing cooperative arrangements would allow States adequate time to renegotiate existing agreements to ensure compliance with these requirements.
This proposed rule is published under the authority of section 1102 of the Social Security Act (the Act) which requires the Secretary to publish regulations that may be necessary for the efficient administration of the functions for which he is responsible under the Act.
Section 454(7) of the Act requires that each State plan for child and spousal support must "provide for entering into cooperative arrangements with appropriate courts and law enforcement officials (A) to assist the agency in administering the plan, including the entering into of financial arrangements with such courts and officials in order to assure optimum results under such program, and (B) with respect to any other matters of common concern to such courts or officials and the agency administering the plan."
Section 302.34 State plan requirement.
Current regulations at 45 CFR 302.34 require States to enter into written agreements for cooperative arrangements with appropriate courts and law enforcement officials to provide certain services in carrying out the function of the Child Support Enforcement program.
This proposed regulation redesignates this section in tis entirety as paragraph (a), and makes minor editorial changes to the language.
Proposed new paragraph (b) would require that all cooperative arrangements contain the provisions required under the new 45 CFR 303.107.
Section 303.107 Requirements for cooperative arrangements.
This proposed regulation would add a new õ303.107 entitled "Requirements for cooperative arrangements." This section would specify certain information which States must include in all cooperative arrangements, in addition to the criteria required under õ302.34, as follows:
1. Section 303.107(a): Arrangements must contain a clear description of the specific duties, functions and responsibilities of each party.
Any arrangement must clearly describe the duties, functions and responsibilities of each of the parties. The selection and definition of the duties, functions and responsibilities depends upon the identity, resources, and skills of the parties involved. Once identified, those responsibilities must be clearly stated to avoid confusion by either party. In other words, the arrangementmust specify clearly what will be done and who will do it. One responsibility of the State IV-D agency is monitoring cooperative arrangements to ensure effective implementation of the terms of the arrangement and to identify any problems that may affect the delivery of services promised under the arrangement.
2. Section 303.107(b): Arrangements must specify clear and definite standards of performance which meet Federal requirements.
An arrangement must specify clear and precise performance standards by which the terms of the arrangement and quality of services provided under the arrangement are measured. All arrangements should contain standards of performance that are measurable, consistent with Federal requirements and acceptable to each party. These standards should be related specifically to the duties outlined.
The arrangements should contain both qualitative and quantifiable performance standards. Some examples of qualitative standards are accuracy and thoroughness. Examples of quantifiable standards are: how many specific actions must be taken; what time frame is allowable for completion of a task, for example, paternity establishment; what collection levels must be maintained; or what ratio of costs to collections must be achieved. Reimbursement for services should be conditioned upon meeting the standards, as discussed further under the discussion on financial arrangements.
Any performance standards contained in Federal regulations governing areas covered under cooperative arrangements must be met by the party who has entered into the arrangement with the IV-D agency. Because the IV-D agency remains responsible for the implementation of the program, it must also retain authority for the interpretation of this material. Since program success depends upon mutual cooperation, there should be a common effort to develop reasonable standards which are ambitious, attainable, and consistent with Federal requirements.
3. Section 303.107(c): Arrangements must specify that the parties will comply with title IV-D of the Act, implementing regulations and any other applicable Federal regulations and requirements.
To ensure that all IV-D functions are performed in accordance with approved State plans and all relevant Federal requirements, the proposed rule would require all arrangements to specify that applicable Federal requirements will be met by the parties to the arrangement. The State should ensure that key Federal and State laws or regulations that apply to the services and actions provided under the arrangement are available to the parties.
4. Section 303.107(d): Arrangements must specify the financial arrangements including budget estimates, covered expenditures, methods of determining costs, procedures for billing the State or local IV-D agency and any relevant Federal and State reimbursement requirements and limitations.
The financial section of the arrangement establishes the resources necessary to accomplish program objectives. In addition, the financial section not only controls expendituresbut also ensures the propriety of those expenditures. Therefore, the proposal should require all arrangements to specify in detail the financial terms under which the parties will carry out the arrangement.
We strongly encourage States to link funding to performance in the terms and conditions of their cooperative arrangements. This link can be both positive and negative, e.g., increased funding for better performance and passing on any audit or other penalties sustained by the State as an outgrowth of inadequate performance under the agreement. Ideally, States should negotiate terms that would allow them to pass on to the other parties to the arrangement the impact of those parties' performance.
We also suggest that arrangements contain detailed financial arrangements such as:
(1) The proportion in which expenditures are divided between the parties. e.g., State/county matching rate;
(2) If indirect costs are to be included in the arrangement, a statement on the computation of those indirect costs, including whether or not:
(A) A fixed rate is to be used and, if so, what that rate will be; or
(B) An estimate is to be used and, if so, how it is to be determined and how and when a final rate will be set; or
(C) A "lump sum" amount is to be negotiated each year;
(3) The base costs to which the indirect rate will be applied to determine the amount of eligible indirect costs that can be claimed;
(4) The type or cost of equipment purchases that will require prior approval;
(5) The method and cost threshold of depreciation; and
(6) If applicable, the method for passing through an appropriate share of the incentive payments to political subdivisions that participate in the costs of the program.
5. Section 303.107(e): Arrangements must specify the kind of records that must be maintained and the appropriate Federal, State and local reporting and safeguarding requirements.
In framing the requirements for record maintenance and reporting, the State must comply with State and Federal reporting and record keeping requirements. The State also has the right to require that the parties to an arrangement keep and present information in a format compatible with its needs. Local needs may require still other kinds of information to be reported or variations in the reporting format. Therefore, the proposed regulation would require that the arrangement specify whatever reports or records are needed to meet Federal, State and local requirements.
Confidentiality of records deserves separate treatment in arrangements. It is vital that case information be disclosed
only to authorized individuals and only for authorized purposes. The arrangement should specify who is to have access to information in case records and for what purpose. Federal and State legislation and regulations are controlling. Federal regulations at 45 CFR 303.21 provide general guidance for the safeguarding of information. 45 CFR 303.70 requires agencies totake protective measures to safeguard personal information transmitted and received through the Federal Parent Locator Service. Additionally, States and localities which obtain certain address or asset information from the Internal Revenue Service are subject to the more stringent recordkeeping and safeguarding requirements of the Internal Revenue Code at 26 U.S.C. 6103(p)(4). Therefore, arrangements would be required to specify that these requirements will be met.
6. Section 303.107(f): Arrangements must specify the dates on which the arrangement begins and ends, any conditions for renewal, and the circumstances under which the arrangement may be terminated.
To ensure that an existing arrangement responds to current conditions and needs, the proposed regulation would require that the arrangement contain dates signifying when it begins and ends. A State might wish to limit the time frame on arrangements to one or two years. In addition, to protect the State from inadequate and deficient services, all arrangements would be required to contain provisions that specify the conditions for renewal and the circumstances under which the arrangement can be terminated. We suggest that the arrangement provide, at a minimum, for termination as a result of clear violations of Federal or State law or of the agreement itself, or for failure to take appropriate corrective action. States may also wish to include a provision for a monetary penalty to avoid termination of an arrangement. Such a penalty could be used to boost performance and as an alternative to outright termination of the arrangement.
We also encourage States to include in arrangements a provision for corrective action and procedures for implementing any necessary corrective action to be used at the discretion of the State. This will enable parties to correct deficiencies when review indicates that they are not meeting the terms of the arrangement or are performing poorly with respect to the defined performance standards. If the State requires the subgrantee to take corrective action, the corrective action period should be limited to a specified length of time. We suggest that States limit the corrective action period to three months since we believe that this time frame is generally sufficient to correct inadequate performance or other noted problems. Because there may be situations in which a State believes immediate termination is the best solution, corrective action may not be appropriate in all cases of poor performance.
Section 304.21 Federal financial participation.
Current regulations at 45 CFR 304.21 state the conditions that must exist to make Federal financial participation available for costs incurred under cooperative arrangements.
This proposed regulation makes minor editorial changes to the title of this section for purposes of consistency with
õ302.34 and adds a new paragraph (b)(6).
The proposed new paragraph (b)(6) would require that all cooperative arrangements contain the provisions in the new 45 CFR 303.107 as a condition for Federal financial participation.Regional office staff will evaluate any of these arrangements when necessary to ensure compliance with the new cooperative arrangement standards. If the review by Regional staff finds a cooperative arrangement is not in compliance with the proposed requirements of 45 CFR 303.107, Federal financial participation will not be available for the costs associated with such until a determination is made that the cooperative arrangement meets the proposed standards.
Section 305.34 Audit requirements.
Current regulations at 45 CFR 305.34 require that States enter into written cooperative arrangements with appropriate courts and law enforcement officials when necessary for the purpose of carrying out the functions of the Child Support Enforcement program. This regulation would add a new sentence to require that all cooperative arrangements conform to the requirements at õ303.107.
Paperwork Reduction Act
This proposed rule at 45 CFR 302.34, 303.107, 304.21 and 305.34, contains information collection requirements which are subject to OMB review under the Paperwork Reduction Act of 1980 (Pub. L. 96-511). As required by section 3504(h) of Pub. L. 96-511, we have submitted a copy of this proposed rule to OMB for its review of the information collection requirements listed above. Other organizations and individuals desiring to submit comments on the information collection requirements should direct them to the agency official designated for this purpose whose name appears in this preamble, and to the Office of Information and Regulatory Affairs, OMB, New Executive Office Building (Room 3208), Washington, DC 20503, Attention: Desk Officer for HHS.
However, the information collection requirements contained in the proposed regulation at 45 CFR 303.107 would not increase the annual burden on States because the time and financial resources necessary to comply with this collection of information would be incurred by the parties to the arrangement in the normal process of negotiation of the arrangement and ratification. According to regulations at 5 CFR 1320.7(b)(1), the time and financial resources necessary to comply with a collection of information that would be incurred by persons in the normal course of their activities is excluded from the definition of "burden" as it refers to paperwork reduction.
Regulatory Flexibility Analysis
Under the Regulatory Flexibility Act of 1980 (Pub. L. 96-354), we are required to prepare a regulatory flexibility analysis for those rules which will have a significant economic impact on a substantial number of small entities. The principle impact of this proposed regulation is on State IV-D agencies which will be required to revise only those existing cooperative arrangements which do not meet the new requirements. Thisproposed regulation could potentially save money for both the Federal Government and the States by controlling amounts spent on and ensuring adequate performance under cooperative arrangements.
States enter into cooperative arrangements to obtain the assistance of courts and law enforcement officials in carrying out the functions of the Child Support Enforcement program: The location of absent parents, the establishment of paternity, the establishment of support obligations, and the enforcement and collection of those obligations.
Federal regulations at 45 CFR 304.021 provide that Federal financial participation, at the applicable matching rate, is available for the costs of cooperative arrangements. The intent of the proposed regulation is to specify certain conditions all cooperative arrangements must meet to increase the effectiveness of the Child Support Enforcement program and to ensure that States get what they pay for.
This proposed regulation strengthens the existing regulation and may result in initial additional costs when States renegotiate and revise their existing cooperative arrangements. However, we believe that the renegotiated arrangements will result in services being provided at a substantial net savings to State and Federal governments due to the increased specificity and effectiveness of such arrangements. States will be in a better position to ensure effective operation of the program by controlling the performance of those under cooperative arrangements.
Therefore, these regulations would not have a significant economic impact on a substantial number of small entities and a regulatory flexibility analysis is not required.
Regulatory Impact Analysis
The Secretary has determined, in accordance with Executive Order 12291 that this rule does not constitute a "major" rule for the following reasons:
(1) The annual effect on the economy is less than $100 million,
(2) This rule will not result in a major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies, or geographic regions; and
(3) This rule will not result in significant adverse effects on competition, employment, investment, productivity, innovation, or the ability of United States-based enterprises to compete with foreign-based enterprises in domestic or export markets.
As discussed above, this regulation will result in net savings for State and Federal governments because of improved performance of services specified under cooperative arrangements, and improved accountability under those arrangements.
Federalism Impact Analysis
Executive Order 12612 requires Federal agencies, in formulating and implementing policies and regulations, to assess the impact of these on federalism. For those rules that have asignificant effect on the roles, rights, and responsibilities between the States and the Federal government, a federalism impact analysis is required.
There is one federalism issue we have identified in this analysis that may affect the institutional relationship between the States and the Federal government. This relates to the addition of the six provisions which would be required in all cooperative arrangements.
The six proposed provisions as submitted in this regulation are designed to improve the accountability of agencies providing IV-D services under cooperative arrangements to the State. These new provisions would strengthen the State's authority by ensuring that delegated or contracted functions are carried out as the State intended and by delineating the consequences of a subgrantee's failure to meet their responsibilities. The Federal government holds States accountable for program services and the States need the authority to hold those actually providing those services accountable. These six new provisions are in no way intended to preempt State law. They are minimal standards which should be part of any contract.
List of Subjects
45 CFR Part 302
Child support, Grant programs-social programs, Penalties, Reporting and recordkeeping requirements, Unemployment compensation.
45 CFR Part 303
Child support, Grant programs-social programs, Reporting and recordkeeping requirements.
45 CFR Part 304
Child welfare, Grant programs-social programs, Reporting and recordkeeping requirements.
45 CFR Part 305
Accounting, Child support, Grant programs-social programs, Reporting and recordkeeping requirements.
(Catalog of Federal Domestic Assistance Program No. 13.783, Child Support Enforcement Program)
Dated: June 29, 1988.
Wayne A, Stanton,
Director, Office of Child Support
Approved: July 20, 1988.
Otis R. Brown,
For the reasons set out in the preamble, Title 45 Chapter III of the Code of Federal Regulations is amended as follows:
1. The authority citation for Part 302 continues to read as follows:
Authority: 42 U.S.C. 651 through 658, 660, 664, 666, 667, 1302, 1396a(a)(25), 1396b(d)(2), 1396b(o), 1396b(p) and 1396(k).
2. Section 302.34 is revised to read as follows:
õ302.34 Cooperative arrangements.
(a) The State Plan shall provide that the State will enter into written agreements for cooperative arrangements with appropriate courts and law enforcement officials. Such arrangements may be entered into with a single official covering more than one court, official, or agency, if the single official has the legal authority to enter into arrangements on behalf of the courts, officials, or agencies. Such arrangements shall contain provisions for providing courts and law enforcement officials with pertinent information needed in locating absent parents, establishing paternity and securing support, including the immediate transfer of the information obtained under õ235.70 of this title to the court or law enforcement official, to the extent that such information is relevant to the duties to be performed pursuant to the arrangement. They shall also provide for assistance to the IV-D agency in carrying out the program, and may relate to any other matters of common concern. Under matters of common concern, such arrangements may include provisions for the investigation and prosecution of fraud directly related to paternity and child and spousal support; and provisions to reimburse courts and law enforcement officials for their assistance.
(b) Cooperative arrangements must meet the criteria prescribed under õ303.107 of this chapter.
3. The authority citation for Part 303 continues to read as follows:
Authority: 42 U.S.C. 651 through 658, 660, 663, 664, 666, 667, 1302, 1396a(a)(25), 1396b(d)(2), 1396b(o), 1396b(p), and 1396(k).
4. Part 303 is amended by adding õ303.107 to read as follows:
õ303.107 Requirements for cooperative arrangements.
The State must ensure that all cooperative arrangements:
(a) Contain a clear description of the specific duties, functions and responsibilities of each party;
(b) Specify clear and definite standards of performance which meet Federal requirements;
(c) Specify that the parties will comply with title IV-D of the Act, implementing Federal regulations and any other applicable Federal regulations and requirements;
(d) Specify the financial arrangements including budget estimates, covered expenditures, methods of determining costs, procedures for billing the State or local IV-D agency, and any relevant Federal and State reimbursement requirements and limitations;
(e) Specify the kind of records that must be maintained and the appropriate Federal, State, and local reporting and safeguarding requirements; and
(f) Specify the dates on which the arrangement begins and ends, any conditions for renewal and the circumstances under which the arrangement may be terminated.
5. The authority citation for Part 304 continues to read as follows:
Authority: 42 U.S.C. 651 through 654, 657, 660, 1302, 1396a(a)(25), 1396b(d)(2), 1396b(o), 1396b(p), and 1396(k).
6. Section 304.21 is amended by revising, the section heading, replacing the period at the end of paragraph (b)(5) with "; and" and adding a new paragraph (b)(6) to read as follows:
õ304.21 Federal financial participation in the costs of cooperative arrangements with courts and law enforcement officials.
* * * * *
(b) * * *
(6) Costs of cooperative arrangements that do not meet the requirements of õ303.107 of this chapter.
* * * * *
8. The authority citation for Part 305 continues to read as follows:
Authority: 42 U.S.C. 603(h), 604(d), 652(a) (1) and (4), and 1302.
9. Section 305.34 is revised to read as follows:
õ 305.34 Cooperative arrangements.
For the purpose of this part, in order to be found in compliance with the State plan requirement for cooperative arrangements (45 CFR 302.34), a State must enter into written cooperative arrangements with appropriate courts and law enforcement officials when necessary to establish and enforce support obligations, collect support and cooperate with other States in these functions. The cooperative arrangements must meet the requirements at õ303.107 of this chapter.
[FR Doc. 88-22830 Filed 10-4-88; 8:45 am]
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