[Code of Federal Regulations]

[Title 45, Volume 4]

[Revised as of October 1, 2005]

From the U.S. Government Printing Office via GPO Access

[CITE: 45CFR1355.36]



[Page 276-278]

 

                        TITLE 45--PUBLIC WELFARE

 

CHAPTER XIII--OFFICE OF HUMAN DEVELOPMENT SERVICES, DEPARTMENT OF HEALTH 

                           AND HUMAN SERVICES

 

PART 1355_GENERAL--Table of Contents

 

Sec. 1355.36  Withholding Federal funds due to failure to achieve 

substantial conformity or failure to successfully complete a program 

improvement plan.



    (a) For the purposes of this section:

    (1) The term ``title IV-B funds'' refers to the State's combined 

allocation of title IV-B subpart 1 and subpart 2 funds; and

    (2) The term ``title IV-E funds'' refers to the State's 

reimbursement for administrative costs for the foster care program under 

title IV-E.

    (b) Determination of the amount of Federal funds to be withheld. ACF 

will determine the amount of the State title IV-B and IV-E funds to be 

withheld due to a finding that the State is not operating in substantial 

conformity, as follows:

    (1) A State will have the opportunity to develop and complete a 

program improvement plan prior to any withholding of funds.

    (2) Title IV-B and IV-E funds will not be withheld from a State if 

the determination of nonconformity was caused by the State's correct use 

of formal written statements of Federal law or policy provided the State 

by DHHS.

    (3) A portion of the State's title IV-B and IV-E funds will be 

withheld by ACF for the year under review and for each succeeding year 

until the State either successfully completes a program improvement plan 

or is found to be operating in substantial conformity.

    (4) The amount of title IV-B and title IV-E funds subject to 

withholding due to a determination that a State is not operating in 

substantial conformity is based on a pool of funds defined as follows:

    (i) The State's allotment of title IV-B funds for each of the years 

to which the withholding applies; and

    (ii) An amount equivalent to 10 percent of the State's Federal 

claims for title IV-E foster care administrative costs for each of the 

years to which withholding applies;

    (5) The amount of funds to be withheld from the pool in paragraph 

(b)(4) of this section will be computed as follows:

    (i) Except as provided for in paragraphs (b)(7) and (b)(8) of this 

section, an amount equivalent to one percent of the funds described in 

paragraph (b)(4) of this section for each of the years to which 

withholding applies will be withheld for each of the seven outcomes 

listed in Sec. 1355.34(b)(1) of this part that is determined not to be 

in substantial conformity; and

    (ii) Except as provided for in paragraphs (b)(7) and (b)(8) of this 

section, an amount equivalent to one percent of the funds described in 

paragraph (b)(4) of this section for each of the years to which 

withholding applies will be withheld for each of the seven systemic 

factors listed in Sec. 1355.34(c) of this part that is determined not 

to be in substantial conformity.

    (6) Except as provided for in paragraphs (b)(7), (b)(8), and (e)(4) 

of this section, in the event the State is determined to be in 

nonconformity on each of the seven outcomes and each of the seven 

systemic factors subject to review, the maximum amount of title IV-B and 

title IV-E funds to be withheld due to the State's failure to comply is 

14 percent per year of the funds described in paragraph (b)(4) of this 

section for each year.



[[Page 277]]



    (7) States determined not to be in substantial conformity that fail 

to correct the areas of nonconformity through the successful completion 

of a program improvement plan, and are determined to be in nonconformity 

on the second full review following the first full review in which a 

determination of nonconformity was made will be subject to increased 

withholding as follows:

    (i) The amount of funds described in paragraph (b)(5) of this 

section will increase to two percent for each of the seven outcomes and 

each of the seven systemic factors that continues in nonconformity since 

the immediately preceding child and family services review;

    (ii) The increased withholding of funds for areas of continuous 

nonconformity is subject to the provisions of paragraphs (c), (d), and 

(e) of this section;

    (iii) The maximum amount of title IV-B and title IV-E funds to be 

withheld due to the State's failure to comply on the second full review 

following the first full review in which the determination of 

nonconformity was made is 28 percent of the funds described in paragraph 

(b)(4) of this section for each year to which the withholding of funds 

applies.

    (8) States determined not to be in substantial conformity that fail 

to correct the areas of nonconformity through the successful completion 

of a program improvement plan, and are determined to be in nonconformity 

on the third and any subsequent full reviews following the first full 

review in which a determination of nonconformity was made will be 

subject to increased withholding as follows:

    (i) The amount of funds described in paragraph (b)(5) of this 

section will increase to three percent for each of the seven outcomes 

and each of the seven systemic factors that continues in nonconformity 

since the immediately preceding child and family services review;

    (ii) The increased withholding of funds for areas of continuous 

nonconformity is subject to the provisions of paragraphs (c), (d), and 

(e) of this section;

    (iii) The maximum amount of title IV-B and title IV-E funds to be 

withheld due to the State's failure to comply on the third and any 

subsequent full reviews following the first full review in which the 

determination of nonconformity was made is 42 percent of the funds 

described in paragraph (b)(4) of this section for each year to which the 

withholding of funds applies.

    (c) Suspension of withholding.

    (1) For States determined not to be operating in substantial 

conformity, ACF will suspend the withholding of the State title IV-B and 

title IV-E funds during the time that a program improvement plan is in 

effect, provided that:

    (i) The program improvement plan conforms to the provisions of Sec. 

1355.35 of this part; and

    (ii) The State is actively implementing the provisions of the 

program improvement plan.

    (2) Suspension of the withholding of funds is limited to three years 

following each review, or the amount of time approved for implementation 

of the program improvement plan, whichever is less.

    (d) Terminating the withholding of funds. For States determined not 

to be in substantial conformity, ACF will terminate the withholding of 

the State's title IV-B and title IV-E funds related to the nonconformity 

upon determination by the State and ACF that the State has achieved 

substantial conformity or has successfully completed a program 

improvement plan. ACF will rescind the withholding of the portion of 

title IV-B and title IV-E funds related to specific goals or action 

steps as of the date at the end of the quarter in which they were 

determined to have been achieved.

    (e) Withholding of funds.

    (1) States determined not to be in substantial conformity that fail 

to successfully complete a program improvement plan will be notified by 

ACF of this final determination of nonconformity in writing within 10 

business days after the relevant completion date specified in the plan, 

and advised of the amount of title IV-B and title IV-E funds which are 

to be withheld.

    (2) Title IV-B and title IV-E funds will be withheld based on the 

following:



[[Page 278]]



    (i) If the State fails to submit status reports in accordance with 

Sec. 1355.35(d)(4), or if such reports indicate that the State is not 

making satisfactory progress toward achieving goals or actions steps, 

funds will be withheld at that time for a period beginning October 1 of 

the fiscal year for which the determination of nonconformity was made 

and ending on the specified completion date for the affected goal or 

action step.

    (ii) Funds related to goals and action steps that have not been 

achieved by the specified completion date will be withheld at that time 

for a period beginning October 1 of the fiscal year for which the 

determination of nonconformity was made and ending on the completion 

date of the affected goal or action step; and

    (iii) The withholding of funds commensurate with the level of 

nonconformity at the end of the program improvement plan will begin at 

the latest completion date specified in the program improvement plan and 

will continue until a subsequent full review determines the State to be 

in substantial conformity or the State successfully completes a program 

improvement plan developed as a result of that subsequent full review.

    (3) When the date the State is determined to be in substantial 

conformity or to have successfully completed a program improvement plan 

falls within a specific quarter, the amount of funds to be withheld will 

be computed to the end of that quarter.

    (4) A State agency that refuses to participate in the development or 

implementation of a program improvement plan, as required by ACF, will 

be subject to the maximum increased withholding of 42 percent of its 

title IV-B and title IV-E funds, as described in paragraph (b)(8) of 

this section, for each year or portion thereof to which the withholding 

of funds applies.

    (5) The State agency will be liable for interest on the amount of 

funds withheld by the Department, in accordance with the provisions of 

45 CFR 30.13.



[65 FR 4081, Jan. 25, 2000, as amended at 66 FR 58675, Nov. 23, 2001]