§ 2025. Administrative cost-sharing and quality control
(a)
Administrative costs
Subject to subsection (k) of this section, the Secretary is authorized to pay to each State agency an amount equal to 50 per centum of all administrative costs involved in each State agency’s operation of the supplemental nutrition assistance program, which costs shall include, but not be limited to, the cost of
(2)
the acceptance, storage, protection, control, and accounting of benefits after their delivery to receiving points within the State,
(4)
informational activities relating to the supplemental nutrition assistance program, including those undertaken under section
2020
(e)(1)(A) of this title, but not including recruitment activities,
(6)
automated data processing and information retrieval systems subject to the conditions set forth in subsection (g) of this section,
(8)
implementing and operating the immigration status verification system established under section 1137(d) of the Social Security Act (42 U.S.C. 1320b–7
(d)): Provided, That the Secretary is authorized at the Secretary’s discretion to pay any State agency administering the supplemental nutrition assistance program on all or part of an Indian reservation under section
2020
(d) of this title or in a Native village within the State of Alaska identified in section
1610
(b) of title
43.[1] such amounts for administrative costs as the Secretary determines to be necessary for effective operation of the supplemental nutrition assistance program, as well as to permit each State to retain 35 percent of the value of all funds or allotments recovered or collected pursuant to sections
2015
(b) and
2022
(c) of this title and 20 percent of the value of any other funds or allotments recovered or collected, except the value of funds or allotments recovered or collected that arise from an error of a State agency. The officials responsible for making determinations of ineligibility under this chapter shall not receive or benefit from revenues retained by the State under the provisions of this subsection.
(b)
Work supplementation or support program
(1)
“Work supplementation or support program” defined
In this subsection, the term “work supplementation or support program” means a program under which, as determined by the Secretary, public assistance (including any benefits provided under a program established by the State and the supplemental nutrition assistance program) is provided to an employer to be used for hiring and employing a public assistance recipient who was not employed by the employer at the time the public assistance recipient entered the program.
(2)
Program
A State agency may elect to use an amount equal to the allotment that would otherwise be issued to a household under the supplemental nutrition assistance program, but for the operation of this subsection, for the purpose of subsidizing or supporting a job under a work supplementation or support program established by the State.
(3)
Procedure
If a State agency makes an election under paragraph (2) and identifies each household that participates in the supplemental nutrition assistance program that contains an individual who is participating in the work supplementation or support program—
(A)
the Secretary shall pay to the State agency an amount equal to the value of the allotment that the household would be eligible to receive but for the operation of this subsection;
(B)
the State agency shall expend the amount received under subparagraph (A) in accordance with the work supplementation or support program in lieu of providing the allotment that the household would receive but for the operation of this subsection;
(c)
Quality control system
(1)
In general
(A)
System
In carrying out the supplemental nutrition assistance program, the Secretary shall carry out a system that enhances payment accuracy and improves administration by establishing fiscal incentives that require State agencies with high payment error rates to share in the cost of payment error.
(B)
Adjustment of Federal share of administrative costs for fiscal years before fiscal year 2003
(i)
In general
Subject to clause (ii), with respect to any fiscal year before fiscal year 2003, the Secretary shall adjust a State agency’s federally funded share of administrative costs under subsection (a) of this section, other than the costs already shared in excess of 50 percent under the proviso in the first sentence of subsection (a) of this section or under subsection (g) of this section, by increasing that share of all such administrative costs by 1 percentage point to a maximum of 60 percent of all such administrative costs for each full 1/10 of a percentage point by which the payment error rate is less than 6 percent.
(C)
Establishment of liability amount for fiscal year 2003 and thereafter
With respect to fiscal year 2004 and any fiscal year thereafter for which the Secretary determines that, for the second or subsequent consecutive fiscal year, a 95 percent statistical probability exists that the payment error rate of a State agency exceeds 105 percent of the national performance measure for payment error rates announced under paragraph (6), the Secretary shall establish an amount for which the State agency may be liable (referred to in this paragraph as the “liability amount”) that is equal to the product obtained by multiplying—
(D)
Authority of Secretary with respect to liability amount
With respect to the liability amount established for a State agency under subparagraph (C) for any fiscal year, the Secretary shall—
(i)
(I)
waive the responsibility of the State agency to pay all or any portion of the liability amount established for the fiscal year (referred to in this paragraph as the “waiver amount”);
(II)
require that a portion, not to exceed 50 percent, of the liability amount established for the fiscal year be used by the State agency for new investment, approved by the Secretary, to improve administration by the State agency of the supplemental nutrition assistance program (referred to in this paragraph as the “new investment amount”), which new investment amount shall not be matched by Federal funds;
(E)
Payment of at-risk amount for certain States
(i)
In general
A State agency shall pay to the Secretary the at-risk amount designated under subparagraph (D)(i)(III) for any fiscal year in accordance with clause (ii), if, with respect to the immediately following fiscal year, a liability amount has been established for the State agency under subparagraph (C).
(ii)
Method of payment of at-risk amount
(I)
Remission to the Secretary
In the case of a State agency required to pay an at-risk amount under clause (i), as soon as practicable after completion of all administrative and judicial reviews with respect to that requirement to pay, the chief executive officer of the State shall remit to the Secretary the at-risk amount required to be paid.
(II)
Alternative method of collection
(aa)
In general
If the chief executive officer of the State fails to make the payment under subclause (I) within a reasonable period of time determined by the Secretary, the Secretary may reduce any amount due to the State agency under any other provision of this section by the amount required to be paid under clause (i).
(F)
Use of portion of liability amount for new investment
(i)
Reduction of other amounts due to State agency
In the case of a State agency that fails to comply with a requirement for new investment under subparagraph (D)(i)(II) or clause (iii)(I), the Secretary may reduce any amount due to the State agency under any other provision of this section by the portion of the liability amount that has not been used in accordance with that requirement.
(ii)
Effect of State agency’s wholly prevailing on appeal
If a State agency begins required new investment under subparagraph (D)(i)(II), the State agency appeals the liability amount of the State agency, and the determination by the Secretary of the liability amount is reduced to $0 on administrative or judicial review, the Secretary shall pay to the State agency an amount equal to 50 percent of the new investment amount that was included in the liability amount subject to the appeal.
(iii)
Effect of Secretary’s wholly prevailing on appeal
If a State agency does not begin required new investment under subparagraph (D)(i)(II), the State agency appeals the liability amount of the State agency, and the determination by the Secretary of the liability amount is wholly upheld on administrative or judicial review, the Secretary shall—
(iv)
Effect of neither party’s wholly prevailing on appeal
The Secretary shall promulgate regulations regarding obligations of the Secretary and the State agency in a case in which the State agency appeals the liability amount of the State agency and neither the Secretary nor the State agency wholly prevails.
(2)
Error rate definitions
As used in this section—
(A)
the term “payment error rate” means the sum of the point estimates of an overpayment error rate and an underpayment error rate determined by the Secretary from data collected in a probability sample of participating households;
(3)
Exclusions
The following errors may be measured for management purposes but shall not be included in the payment error rate:
(4)
Reporting requirements
The Secretary may require a State agency to report any factors that the Secretary considers necessary to determine a State agency’s payment error rate, liability amount or new investment amount under paragraph (1), or performance under the performance measures under subsection (d) of this section. If a State agency fails to meet the reporting requirements established by the Secretary, the Secretary shall base the determination on all pertinent information available to the Secretary.
(5)
Procedures
To facilitate the implementation of this subsection, each State agency shall expeditiously submit to the Secretary data concerning the operations of the State agency in each fiscal year sufficient for the Secretary to establish the State agency’s payment error rate, liability amount or new investment amount under paragraph (1), or performance under the performance measures under subsection (d) of this section. The Secretary shall initiate efforts to collect the amount owed by the State agency as a claim established under paragraph (1) for a fiscal year, subject to the conclusion of any formal or informal appeal procedure and administrative or judicial review under section
2023 of this title (as provided for in paragraph (7)), before the end of the fiscal year following such fiscal year.
(6)
National performance measure for payment error rates
(A)
Announcement
At the time the Secretary makes the notification to State agencies of their error rates, the Secretary shall also announce a national performance measure that shall be the sum of the products of each State agency’s error rate as developed for the notifications under paragraph (8) times that State agency’s proportion of the total value of national allotments issued for the fiscal year using the most recent issuance data available at the time of the notifications issued pursuant to paragraph (8).
(B)
Use of alternative measure of State error
Where a State fails to meet reporting requirements pursuant to paragraph (4), the Secretary may use another measure of a State’s error developed pursuant to paragraph (5), to develop the national performance measure.
(7)
Administrative and judicial review
(A)
In general
Except as provided in subparagraphs (B) and (C), if the Secretary asserts a financial claim against or establishes a liability amount with respect to a State agency under paragraph (1), the State may seek administrative and judicial review of the action pursuant to section
2023 of this title.
(B)
Determination of payment error rate
With respect to any fiscal year, a determination of the payment error rate of a State agency or a determination whether the payment error rate exceeds 105 percent of the national performance measure for payment error rates shall be subject to administrative or judicial review only if the Secretary establishes a liability amount with respect to the fiscal year under paragraph (1)(C).
(8)
Criteria for payment by a State agency
(A)
This paragraph applies to the determination of whether a payment is due by a State agency for a fiscal year under paragraph (1).
(B)
Not later than the first May 31 after the end of the fiscal year referred to in subparagraph (A), the case review and all arbitrations of State-Federal difference cases shall be completed.
(C)
Not later than the first June 30 after the end of the fiscal year referred to in subparagraph (A), the Secretary shall—
(D)
A State agency desiring to appeal a payment claim or liability amount determined under subparagraph (C) shall submit to an administrative law judge—
(E)
Not later than 60 days after a State agency submits evidence in support of the appeal, the Secretary shall submit responsive evidence to the administrative law judge to the extent such evidence exists.
(F)
Not later than 30 days after the Secretary submits responsive evidence, the State agency shall submit rebuttal evidence to the administrative law judge to the extent such evidence exists.
(H)
In considering a claim or liability amount under this paragraph, the administrative law judge shall consider all grounds for denying the claim or liability amount, in whole or in part, including the contention of a State agency that the claim or liability amount should be waived, in whole or in part, for good cause.
(9)
“Good cause” defined
As used in this subsection, the term “good cause” includes—
(A)
a natural disaster or civil disorder that adversely affects supplemental nutrition assistance program operations;
(B)
a strike by employees of a State agency who are necessary for the determination of eligibility and processing of case changes under the supplemental nutrition assistance program;
(C)
a significant growth in the caseload under the supplemental nutrition assistance program in a State prior to or during a fiscal year, such as a 15 percent growth in caseload;
(d)
Bonuses for States that demonstrate high or most improved performance
(1)
Fiscal years 2003 and 2004
(A)
Guidance
With respect to fiscal years 2003 and 2004, the Secretary shall establish, in guidance issued to State agencies not later than October 1, 2002—
(2)
Fiscal years 2005 and thereafter
(A)
Regulations
With respect to fiscal year 2005 and each fiscal year thereafter, the Secretary shall—
(i)
establish, by regulation, performance criteria relating to—
(e)
Use of social security account numbers; access to information
The Secretary and State agencies shall
(1)
require, as a condition of eligibility for participation in the supplemental nutrition assistance program, that each household member furnish to the State agency their social security account number (or numbers, if they have more than one number), and
(2)
use such account numbers in the administration of the supplemental nutrition assistance program. The Secretary and State agencies shall have access to the information regarding individual supplemental nutrition assistance program applicants and participants who receive benefits under title XVI of the Social Security Act [42 U.S.C. 1381 et seq.] that has been provided to the Commissioner of Social Security, but only to the extent that the Secretary and the Commissioner of Social Security determine necessary for purposes of determining or auditing a household’s eligibility to receive assistance or the amount thereof under the supplemental nutrition assistance program, or verifying information related thereto.
(f)
Payment of certain legal fees
Notwithstanding any other provision of law, counsel may be employed and counsel fees, court costs, bail, and other expenses incidental to the defense of officers and employees of the Department of Agriculture may be paid in judicial or administrative proceedings to which such officers and employees have been made parties and that arise directly out of their performance of duties under this chapter.
(g)
Cost sharing for computerization
(1)
In general
Except as provided in paragraphs (2) and (3), the Secretary is authorized to pay to each State agency the amount provided under subsection (a)(6) for the costs incurred by the State agency in the planning, design, development, or installation of 1 or more automatic data processing and information retrieval systems that the Secretary determines—
(C)
are likely to provide more efficient and effective administration of the supplemental nutrition assistance program;
(D)
would be compatible with other systems used in the administration of State programs, including the program funded under part A of title IV of the Social Security Act (42 U.S.C. 601 et seq.);
(E)
would be tested adequately before and after implementation, including through pilot projects in limited areas for major systems changes as determined under rules promulgated by the Secretary, data from which shall be thoroughly evaluated before the Secretary approves the system to be implemented more broadly; and
(h)
Funding of employment and training programs
(1)
In general.—
(A)
Amounts.—
To carry out employment and training programs, the Secretary shall reserve for allocation to State agencies, to remain available for 15 months, from funds made available for each fiscal year under section
2027
(a)(1) of this title, $90,000,000 for each fiscal year.
(B)
Allocation.—
Funds made available under subparagraph (A) shall be made available to and reallocated among State agencies under a reasonable formula that—
(C)
Reallocation.—
If a State agency will not expend all of the funds allocated to the State agency for a fiscal year under subparagraph (B), the Secretary shall reallocate the unexpended funds to other States (during the fiscal year or the subsequent fiscal year) as the Secretary considers appropriate and equitable.
(D)
Minimum allocation.—
Notwithstanding subparagraph (B), the Secretary shall ensure that each State agency operating an employment and training program shall receive not less than $50,000 for each fiscal year.
(E)
Additional allocations for states that ensure availability of work opportunities.—
(i)
In general.—
In addition to the allocations under subparagraph (A), from funds made available under section
2027
(a)(1) of this title, the Secretary shall allocate not more than $20,000,000 for each fiscal year to reimburse a State agency that is eligible under clause (ii) for the costs incurred in serving members of households receiving supplemental nutrition assistance program benefits who—
(2)
If, in carrying out such program during such fiscal year, a State agency incurs costs that exceed the amount allocated to the State agency under paragraph (1), the Secretary shall pay such State agency an amount equal to 50 per centum of such additional costs, subject to the first limitation in paragraph (3), including the costs for case management and casework to facilitate the transition from economic dependency to self-sufficiency through work.
(3)
The Secretary shall also reimburse each State agency in an amount equal to 50 per centum of the total amount of payments made or costs incurred by the State agency in connection with transportation costs and other expenses reasonably necessary and directly related to participation in an employment and training program under section
2015
(d)(4) of this title, except that the amount of the reimbursement for dependent care expenses shall not exceed an amount equal to the payment made under section
2015
(d)(4)(I)(i)(II) of this title but not more than the applicable local market rate, and such reimbursement shall not be made out of funds allocated under paragraph (1).
(4)
Funds provided to a State agency under this subsection may be used only for operating an employment and training program under section
2015
(d)(4) of this title, and may not be used for carrying out other provisions of this chapter.
(5)
The Secretary shall monitor the employment and training programs carried out by State agencies under section
2015
(d)(4) of this title to measure their effectiveness in terms of the increase in the numbers of household members who obtain employment and the numbers of such members who retain such employment as a result of their participation in such employment and training programs.
(i)
Geographical error-prone profiles
(1)
The Department of Agriculture may use quality control information made available under this section to determine which project areas have payment error rates (as defined in subsection (d)(1) of this section) that impair the integrity of the supplemental nutrition assistance program.
(2)
The Secretary may require a State agency to carry out new or modified procedures for the certification of households in areas identified under paragraph (1) if the Secretary determines such procedures would improve the integrity of the supplemental nutrition assistance program and be cost effective.
(j)
Training materials regarding certification of farming households
Not later than 180 days after September 19, 1988, and annually thereafter, the Secretary shall publish instructional materials specifically designed to be used by the State agency to provide intensive training to State agency personnel who undertake the certification of households that include a member who engages in farming.
(k)
Reductions in payments for administrative costs
(2)
Determinations of amounts attributable to benefiting programs
Not later than 180 days after June 23, 1998, the Secretary of Health and Human Services, in consultation with the Secretary of Agriculture and the States, shall, with respect to the base period for each State, determine—
(A)
the annualized amount the State received under section 403(a)(3) of the Social Security Act (42 U.S.C. 603
(a)(3) (as in effect during the base period)) for administrative costs common to determining the eligibility of individuals, families, and households eligible or applying for the AFDC program and the supplemental nutrition assistance program, the AFDC program and the medicaid program, and the AFDC program, the supplemental nutrition assistance program, and the medicaid program that were allocated to the AFDC program; and
(B)
the annualized amount the State would have received under section 403(a)(3) of the Social Security Act (42 U.S.C. 603
(a)(3) (as so in effect)), section 1903(a)(7) of the Social Security Act (42 U.S.C. 1396b
(a)(7) (as so in effect)), and subsection (a) of this section (as so in effect), for administrative costs common to determining the eligibility of individuals, families, and households eligible or applying for the AFDC program and the supplemental nutrition assistance program, the AFDC program and the medicaid program, and the AFDC program, the supplemental nutrition assistance program, and the medicaid program, if those costs had been allocated equally among such programs for which the individual, family, or household was eligible or applied for.
(3)
Reduction in payment
(A)
In general
Notwithstanding any other provision of this section, the Secretary shall reduce, for each fiscal year, the amount paid under subsection (a) of this section to each State by an amount equal to the amount determined for the supplemental nutrition assistance program under paragraph (2)(B). The Secretary shall, to the extent practicable, make the reductions required by this paragraph on a quarterly basis.
(B)
Application
If the Secretary of Health and Human Services does not make the determinations required by paragraph (2) by September 30, 1999—
(i)
during the fiscal year in which the determinations are made, the Secretary shall reduce the amount paid under subsection (a) of this section to each State by an amount equal to the sum of the amounts determined for the supplemental nutrition assistance program under paragraph (2)(B) for fiscal year 1999 through the fiscal year during which the determinations are made; and