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Federal Register / Vol. 72, No.

171 / Wednesday, September 5, 2007 / Rules and Regulations 50889

Subpart 3736—Mining Operations PART 3810—LANDS AND MINERALS PART 3830—LOCATING, RECORDING,
■ 28. Amend § 3736.2 by revising the OR SITES; GENERAL PROVISIONS
second sentence of paragraph (b) to read ■ 29. The authority citation for part
as follows: 3810 continues to read as follows: ■ 31. The authority citation for part
Authority: 30 U.S.C. 22 et seq.; 43 U.S.C. 3830 continues to read as follows:
§ 3736.2 Hearing; notice of protest. 1201 and 1740.
Authority: 18 U.S.C. 1001, 3571; 30 U.S.C.
* * * * *
Subpart 3816—Mineral Locations in 22 et seq., 242, 611; 31 U.S.C. 9701; 43 U.S.C.
(b) * * * Such notice, accompanied Reclamation Withdrawals 2, 1201, 1212, 1457, 1474, 1701 et seq. ; 44
by the filing fee for notice of protest of U.S.C. 3501 et seq.; 115 Stat. 414.
placer mining operations found in the ■ 30. Revise the last sentence of
fee schedule in § 3000.12 of this § 3816.2 to read as follows: Subpart D—BLM Service Charge and
chapter, must contain the party’s name Fee Requirements
§ 3816.2 Application to open lands to
and address and a statement showing location.
the nature of the party’s interest in the ■ 32. Amend § 3830.21 by revising
* * * Each application must be paragraph (h) to read as follows:
use of the lands embraced within the accompanied by the filing fee for
mining claim. * * * application to open lands to location § 3830.21 What are the different types of
* * * * * found in the fee schedule in § 3000.12 service charges and fees?
of this chapter. * * * * *

(h) Recording a notice of intent to locate mining claims on The filing fee for recording a notice of intent to locate mining claims on No.
Stockraising Homestead Act Lands (part 3838). Stockraising Homestead Act Lands found in the fee schedule in § 3000.12
of this chapter.

[FR Doc. E7–17375 Filed 9–4–07; 8:45 am] Table of Contents of a Notice of Proposed Rulemaking
BILLING CODE 4310–84–P I. Background (NPRM) on March 2, 2007 (72 FR 9491)
A. Child Care and Development Fund may be found below in the preamble.
B. Summary of the Statutory and This final rule is not substantively
Administrative Directives To Measure different from the NPRM; however,
HUMAN SERVICES minor technical changes have been
C. Error Rate Methodology
D. Notice of Proposed Rulemaking made to address concerns raised by
Administration for Children and II. Statutory Authority some commenters.
Families III. Summary of Existing Regulations A. Child Care and Development Fund
IV. Provisions of Final Rule
A. Consultation With States, Territories (CCDF)
45 CFR Part 98
and Other Organizations CCDF provides Federal funds to
RIN 0970–AC29 B. Discussion of Comments States, Territories, Indian Tribes and
C. Changes Made in Final Rule
V. Regulatory Impact Analyses
tribal organizations for the purpose of
Child Care and Development Fund assisting low-income families, including
A. Executive Order 12866
Error Rate Reporting B. Regulatory Flexibility Analysis families receiving or transitioning from
AGENCY: Administration for Children C. Assessment of the Impact on Family the Temporary Assistance for Needy
and Families (ACF), HHS. Well-Being Families program (TANF), in the
D. Paperwork Reduction Act purchase of child care services, thereby
ACTION: Final rule. E. Unfunded Mandates Reform Act of 1995 allowing parents to work or attend job
F. Congressional Review
SUMMARY: This final rule revises the training or an educational program.
G. Executive Order 13132
Child Care and Development Fund States and Territories also must spend
(CCDF) regulations to provide for the I. Background no less than four percent of their CCDF
reporting of error rates in the This final rule adds a new subpart to allotment on expenditures to improve
expenditure of CCDF grant funds by the the Child Care and Development Fund the quality and availability of child care.
fifty States, the District of Columbia and (CCDF) regulations that requires States, CCDF is provided to States, Territories
Puerto Rico. The error rate reports will the District of Columbia and Puerto Rico and Tribes—there is no provision for
serve to implement provisions of the to employ a case review process in direct funding to individual families or
Improper Payments Information Act of calculating CCDF error rates in providers.
2002 (IPIA) and the President’s accordance with an error rate Federal law establishes eligibility
Management Agenda (PMA)’s goal of methodology established by the criteria for families receiving CCDF
‘‘Eliminating Improper Payments.’’ Secretary of Health and Human Services assistance; however, States and
DATES: Effective October 1, 2007. (the Secretary). This methodology is Territories administering CCDF funds
specified in this rule and associated may impose more restrictive eligibility
information collection forms and standards. Regulations governing CCDF
Cheryl Vincent, Child Care Program are codified in 45 CFR parts 98 and 99,
instructions. The final rule requires
Specialist, Child Care Bureau, 1250 and the Federal definition of a child’s
States, the District of Columbia and
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Maryland Ave., SW., 8th Floor, Puerto Rico to report specified eligibility for child care services is set
Washington, DC 20024, telephone (202) information regarding errors to the forth in 45 CFR 98.20. This description
205–0750, e-mail Department of Health and Human includes eligibility requirements related Services. A discussion of comments to a child’s age, a child’s special needs
SUPPLEMENTARY INFORMATION: received in response to the publication or protective services status, family

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50890 Federal Register / Vol. 72, No. 171 / Wednesday, September 5, 2007 / Rules and Regulations

income and parent’s work, training or According to the IPIA, Federal client eligibility. A pilot study of
educational activity. Lead Agencies of agencies must report on the actions they additional States (Florida, Kansas, New
the CCDF Program, which are the State, are taking to reduce improper payments Jersey, Oregon, and West Virginia) was
territorial or tribal entities to which if the estimated amount of improper completed in 2007. The final reports on
CCDF grants are awarded and that are payments for an activity or program the error rate methodology pilots may be
accountable for the use of the funds exceeds $10 million and 2.5 percent of downloaded electronically at: http://
provided, have established policies and program payments. CCDF has been
procedures that vary considerably identified by the Office of Management ipi/ipi.htm.
across and even within jurisdictions, and Budget (OMB) as a program Although this final rule is broad
including, but not limited to, stricter susceptible to significant erroneous enough to encompass reporting on all
income limits, special eligibility or payments and for which improper types of errors, the initial methodology
priority for families receiving TANF and payment information is required to be and reporting requirements will focus
eligibility that differs for a child with reported under the IPIA. This report on administrative errors associated with
special needs. All clients seeking child must include a discussion of the causes client eligibility and improper
care assistance supported by CCDF of improper payments, what actions authorizations for payment, as described
funds must undergo an eligibility Federal agencies have taken to correct in more detail in the preamble and
determination process when they those causes and the results achieved. accompanying information collection
initially apply, and all Lead Agencies Federal agencies also must state forms and instructions associated with
have defined a process for verifying whether they have the information the rule (please refer to the section
information submitted in the systems and other infrastructure needed discussing the Paperwork Reduction Act
application. Eligibility determination to reduce improper payments and, if below).
affects many other aspects of the not, what resources they have requested During the initial information
program, including provider payment in their budget submissions. Finally, collection, States, the District of
rates, authorized hours of care and a Federal agencies must report on what Columbia, and Puerto Rico will evaluate
family’s co-payment responsibility. steps they have taken to hold managers both the frequency with which errors
Section 658E of the Child Care and accountable for reducing improper occurred and the amount of improper
Development Block Grant (CCDBG) Act payments. The IPIA may be downloaded authorization for payment. ACF will use
(42 U.S.C. 9858c) and 45 CFR 98.52 at: the improper authorization for payment
limit expenditures by States and bdquery/z?d107:HR04878:TOM:/bss/ error rates and amounts for each State,
Territories for the costs of administering d107query.html. the District of Columbia, and Puerto
the CCDF program to no more than five The Executive Branch also has Rico to compute a national improper
percent of the State’s or Territory’s worked to address the improper authorizations for payment rate and
aggregate expenditures from a fiscal payments issue. The President’s amount that will be annually reported
year’s allotment of CCDF funds. Various Management Agenda (PMA)’s goal of in the HHS’ Performance and
costs that are considered an integral part ‘‘Eliminating Improper Payments’’ Accountability Report (PAR) beginning
of service delivery are excluded from promises to establish a baseline of the with the Fiscal Year 2008 PAR.
the five percent administrative cap, extent of improper payments and to We will use a three-year rotational
including eligibility determination and work with agencies to set goals to cycle to measure improper
redetermination and the establishment reduce improper payments for each authorizations for payment in CCDF
and maintenance of computerized child program. The anticipated result of this programs in the States, the District of
care information systems. effort is greater accuracy in benefit and Columbia, and Puerto Rico. Out of this
assistance programs, which will enable group, we have selected 18 to measure
B. Summary of the Statutory and in the first year of each cycle and 17 to
programs to serve additional eligible
Administrative Directives To Measure measure in each of the remaining two
recipients. The PMA may be
Improper Payments years. The result is that each State, the
downloaded at: http://
The Improper Payments Information District of Columbia, and Puerto Rico
Act of 2002 (IPIA) (31 U.S.C. 3321 note) fy2002/mgmt.pdf. will be measured once, and only once,
requires Federal agencies to identify The modifications in this final rule every three years. This rotation allows
programs that are vulnerable to are designed to meet the requirements of jurisdictions to plan for the reviews
improper payments and to estimate the IPIA as well as to meet the PMA’s because they know in advance in which
annually the amount of underpayments goal of ‘‘Eliminating Improper year they will be measured. States, the
and overpayments made by these Payments.’’ District of Columbia, and Puerto Rico
programs. An improper payment, as have been randomly assigned using the
defined by the IPIA, is any payment that C. Error Rate Methodology following methodology. First, each
should not have been made or that was The methodology that is implemented entity was stratified by the 10 ACF
made in an incorrect amount under in this final rule is based on a regions, with the regions randomly
statutory, contractual, administrative or methodology the Child Care Bureau ordered. Then within region each group
other legally applicable requirement. developed and field-tested in 2005 in was sorted by caseload, from the most
Incorrect amounts are overpayments partnership with four States that cases to the least cases. Every third State
and underpayments (including volunteered to participate in a pilot (including the District of Columbia and
inappropriate denials of payment or study (Arkansas, Colorado, Illinois and Puerto Rico) on the list was selected,
service). An improper payment includes Ohio). This methodology focused on using a random start number between
any payment that was made to an administrative error associated with one and three the first year. After
ineligible recipient or for an ineligible client eligibility and improper removing those selected for the first year
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service. Improper payments also are authorizations for payment. At the from the frame, a second random start
duplicate payments, payments for conclusion of the pilot, it was was drawn between one and two and
services not received and payments that determined that a version of the tested every other State (including the District
do not account for credit for applicable methodology would be an appropriate of Columbia and Puerto Rico, if they
discounts. tool for calculating error rates related to remained) was selected for the second

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year. The third year includes those not prior to this final rule statute and focus on client eligibility errors—we are
selected in year one or year two. This regulations governing CCDF did not operationalizing these requirements by
sampling approach yielded a mix of require States and Territories to asking States, the District of Columbia,
county-administered and State- systematically measure or report on and Puerto Rico to measure only
administered programs and programs errors committed in the administration administrative errors in eligibility
serving both large and small numbers of of CCDF funds. determination and improper
children each year. A list of States authorizations for payments to subsidy
IV. Provisions of Final Rule
(including the District of Columbia and recipients rather than improper
Puerto Rico) assigned to each review While retaining the provisions payments made to subsidy recipients.
year can be found in the information governing CCDF Lead Agency audits, As stated in the proposed rule and
collection instructions. financial reporting requirements, and detailed in the associated information
fiscal requirements (located in 45 CFR collection forms and instructions, the
D. Notice of Proposed Rulemaking 98.65 and 45 CFR 98.67), this final rule initial error rate methodology includes:
A Notice of Proposed Rulemaking adds a new Subpart K—Error Rate (1) Sample Selection: A sample of 271
(NPRM) was published in the Federal Reporting to require CCDF Lead (or 276) cases will be selected by each
Register on Friday, March 2, 2007 (72 Agencies of the fifty States, the District State using a sampling frame based on
FR 9491) with a 60-day public comment of Columbia and Puerto Rico to the child population served by
period. As discussed later in this measure, calculate and report error rates eligibility offices for each month of the
preamble, we received comments from to the Department of Health and Human designated Federal Fiscal Year to
19 entities, including State child care Services. This reporting must be in achieve a 90% confidence level +/¥
administrators, national child care accordance with an error rate 5%; (2) Record Review Worksheet: A
advocacy groups, and other methodology established by the template of a record review worksheet
organizations. Secretary, as summarized in this final will be customized by each State so its
rule and detailed in the associated worksheet conforms to the specifics of
II. Statutory Authority information collection forms and State policies and procedures. The
This regulation is being issued under instructions. States, the District of worksheet captures the detail for each
the authority granted to the Secretary by Columbia and Puerto Rico are required element of eligibility, the benefit
Section 658I of the CCDBG Act (42 to report specified information calculation as documented by the
U.S.C. 9858g) and in accordance with regarding errors every three years and to agency, the amount of the subsidy
the IPIA (31 U.S.C. 3321 note). report on strategies for reducing the authorized, and any resulting errors; (3)
III. Summary of the Existing error rate. The rule also requires States, Case Review: State reviewers will
Regulations the District of Columbia and Puerto Rico conduct case record reviews and collect
to set target error rates for the next key pieces of information, including
Under CCDF regulations, ACF cycle. The first cohort of States administrative errors occurring during
employs several methods to gather the (including Puerto Rico) subject to the the review month, cause of improper
information from States, the District of final regulations will need to complete authorization for payment, total amount
Columbia, and Territories needed to their reviews and submit their data to of improper authorizations for payment
comply with the statutory requirements ACF on or before June 30, 2008. during the review month, and total
of the CCDBG Act and to efficiently Requirements under Subpart K apply amount of authorizations during the
oversee the administration of the CCDF only to the fifty States, the District of review month; (4) Error Measures
program. States and Territories must Columbia and Puerto Rico. American Calculation: States, the District of
submit plans every two years detailing Samoa, the U.S. Virgin Islands, the Columbia, and Puerto Rico will prepare
their intentions for implementing Commonwealth of the Northern Mariana a report calculating percentage of cases
programs under 45 CFR 98.17. Pursuant Islands, Guam and the Tribes are with an error, percentage of cases with
to 45 CFR 98.70, States and Territories exempted from the requirements of this an improper authorization for payment
also must collect monthly case-level rule. We do not believe that the benefits (expressed as the total number of cases
reports (which may be submitted of the error rate data obtained from with an improper authorization for
monthly or quarterly) and submit these exempted Territories and Tribes payment as compared to the total
annual aggregated reports on services justify the costs of compliance with the number of cases), percentage of
provided through all CCDF grant funds. regulation, which would require a much improper authorizations for payment
Finally, States and Territories are greater portion of child care resources (expressed as the total amount of
required to submit quarterly reports on relative to the States, the District of improper authorizations for payment
estimates and expenditures in Columbia and Puerto Rico. However, we compared to the total dollar amount of
conjunction with 45 CFR 98.65. encourage exempted Territories and authorizations made), average amount of
45 CFR 98.65(a) requires Lead Tribes to comply voluntarily with the improper authorization for payment,
Agencies to have an audit conducted requirements of the rule or to create and the estimated annual amount of
after the close of each program period in their own methods and strategies for improper authorizations for payment;
accordance with OMB Circular A–133 identifying and reducing improper (5) Federal Oversight and Monitoring,
and the Single Audit Act Amendments payments. Additionally, should funding and Ongoing Technical Assistance: The
of 1996 and 45 CFR 98.67(c) requires and provision of services change in Child Care Bureau will provide ongoing
Lead Agencies to have fiscal control and these exempted Tribes and Territories, oversight, monitoring, and technical
accounting procedures sufficient to we will consider removing the assistance.
establish that funds have been expended exemption through the notice and Under CCDF regulations at 45 CFR
appropriately. Further, the regulations comment rulemaking process. 98.52, Lead Agencies are prohibited
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at 45 CFR 98.66 provide that ‘‘[a]ny Under Section 98.100(b) in the final from spending more than five percent of
expenditures not made in accordance rule, States, the District of Columbia and the aggregate CCDF funds expended by
with the Act, the implementing Puerto Rico are required to prepare a the Lead Agency from each fiscal year’s
regulations, or the approved Plan, will report calculating ‘‘error rates.’’ At this allotment for administrative activities.
be subject to disallowance.’’ However, time—and consistent with our initial Section 658E(c)(3)(C) of the CCDBG Act

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(42 U.S.C. 9858c(c)(3)(C)) and the care services. As a result, detection of an their eligibility requirements which may
accompanying Conference Report (H.R. underpayment in any specific case lead to a wide range of error rates. A
Conf. Rep. 104–725) specify that the during the error rate review process principle goal of CCDF set forth in
costs of providing direct services are to does not create an entitlement to that Section 658A of the Child Care and
be excluded from any definition of individual to a particular service or Development Block Grant (CCDBG) Act
administrative costs. The Conference benefit. Nothing in this final rule should of 1990, as amended (42 U.S.C. 9858, et
Report specifically identified eligibility be construed to create a right requiring seq.), is to ‘‘Allow each State maximum
determination and redetermination, the States, the District of Columbia or flexibility in developing child care
reviews and supervision of child care Puerto Rico to remedy any individual, programs and policies that best suit the
placements and establishment and even if a payment error in the form of needs of children and parents within
maintenance of computerized child care an underpayment has been made. such State.’’ As a result, there is
information systems as ‘‘integral part[s] significant variation in how CCDF is
A. Consultation With States, Territories
of service delivery’’ that ‘‘should not be implemented across the country.
and Other Organizations
considered administrative costs.’’
Therefore, provided the focus of the The Child Care Bureau has consulted However, the methodology focuses on
error rate calculations and reports with States, the District of Columbia and administrative error associated with
continue to focus on client eligibility, Territories since 2003 on different client eligibility and improper
costs to Lead Agencies of conducting approaches to addressing improper authorizations for payment. A principal
case reviews and preparing error rate payments and has field tested an error reason for focusing on client eligibility
reports shall be considered a part of rate methodology in nine volunteer pilot is that, while the methods used to
service delivery and excluded from States. Through quarterly conference determine initial and ongoing client
administrative costs subject to the five calls, workshops at annual State eligibility are not uniform across States,
percent administrative cap. Further, any Administrators Meetings and an Territories and Tribes, all States,
costs incurred by a Lead Agency in Improper Payments survey, the Child Territories and Tribes must have
complying with this regulation that are Care Bureau has engaged States and procedures in place for parents to apply
directed toward establishing or Territories in conversations about for child care services and some system
improving child care information strategies to identify, measure, prevent, to initially determine and periodically
systems also shall be excluded from reduce and collect improper payments. re-determine eligibility. Also,
administrative costs subject to the five The Child Care Bureau also has been in determining client eligibility is the first
percent administrative cap. contact with national organizations such step in the child care subsidy process
Should an improper payment related as the American Public Human Services and therefore affects the administration
to specific cases that were included in Association, the National Association of the entire program.
the sample during the case review for Program Information and
process be identified, these funds are The primary purpose of this final rule
Performance Measurement and the
subject to existing disallowance United Council on Welfare Fraud is to improve State administration of the
procedures for misspent funds as set through conferences, meetings and CCDF program. We believe that the
forth at 45 CFR 98.66 of CCDF conference calls regarding strategies to State error measures will be useful for
regulations. Extrapolations of estimated address improper payments. improving overall program integrity and
improper payments derived from that it will help inform program
random sampling of total cases are not B. Discussion of Comments administrators about which quality
subject to disallowance. In response to the proposed rule, control or other initiatives will be most
Pursuant to CCDF regulations at 45 comments were received from 19 State effective in reducing error rates and
CFR 98.60(i), a Lead Agency is required child care administrators, national child improper authorizations for payment in
to recover child care payments that are care advocacy groups, and other their own programs. At the same time,
the result of fraud. The Lead Agency has organizations as follows. the Improper Payments Information Act
discretion as to whether to recover (IPIA) requires a national-level measure
misspent funds that were not the result National Error Rate Does Not Reflect
of improper payments, which will
of fraud, such as in cases of Block Grant Flexibility
provide a broader perspective of the
administrative error. Improperly spent Comment: Several commenters CCDF program as it is administered
funds are subject to disallowance questioned the practical application of a across States.
regardless of whether the State pursues uniform national error rate to a block
grant program, given the differences in Finally, we do not believe limiting the
In the event that improper payments programmatic activity that result from rule to only Federal requirements would
identified through the case review the flexibility inherent in CCDF. be useful for the purpose of identifying
process are recovered, 45 CFR 98.60(g) Commenters felt it would not be and reducing improper payments.
provides that such payments shall (1) If appropriate to establish a national error Federal law establishes broad eligibility
received by the Lead Agency during the rate, since CCDF eligibility requirements criteria for families receiving CCDF
applicable obligation period (described vary greatly across States meaning that assistance; however, States, Territories,
in 45 CFR 98.60(d) & (e)), be used for the difficulty of achieving accuracy in and Tribes administering CCDF funds
activities specified in the Lead Agency’s determining client eligibility varies from may impose more restrictive eligibility
approved plan and must be obligated by State to State. Commenters standards. States must describe the basis
the end of the obligation period; or (2) recommended that the final rule be for determining family eligibility in
if received after the end of the limited to review of Federal their CCDF Plan and are responsible for
applicable obligation period, be requirements to reflect a true national ensuring that the program complies
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returned to the Federal government. error rate. with the approved Plan and all Federal
Section 658F(a) of the CCDBG Act (42 Response: We acknowledge concerns requirements. States are accountable for
U.S.C. 9858d(a)) makes clear that CCDF about establishing a national error properly implementing the eligibility
funding is not an entitlement to any measure for the CCDF program, and policies and procedures they have in
child care provider or recipient of child understand that States differ greatly in place.

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Short Implementation Timeframe proposed activities would compromise these reporting requirements—in terms
Comment: A number of commenters the amount of funding available for of both time and monetary cost—and to
expressed concerns about the short program services. provide us comments through the
Response: This final rule aims to Paperwork Reduction Act information
implementation timeframe for the
identify and reduce errors and improper collection process so that we can update
proposed rule. Commenters felt that
payments in the administration of CCDF our estimates if necessary.
States included in the first cycle of the
funds, thus ensuring that the program is
review process would not have adequate Distinction Between Improper Payments
operated as efficiently and fairly as
lead time to secure funding from their and Improper Authorizations for
possible. Because States, Territories,
State legislatures, hire and train staff, Payment
and Tribes receive a fixed allotment of
prepare and enhance their automated CCDF funds regardless of the number of Comment: Several commenters
systems, and ensure access to archived children served, fewer improper questioned the inconsistency between
records. payments translates into more funds for the information collection forms and
Response: The Improper Payments use in assisting eligible low-income instructions and the regulatory language
Information Act (IPIA) requires Federal families in purchasing child care in the proposed rule, which
agencies to submit estimates of services, providing comprehensive distinguished between improper
improper payments to Congress in consumer education to parents and the authorizations for payment and an
accordance with guidance prescribed by public and improving the quality and actual improper payment. Commenters
the Office of Management and Budget availability of child care. In addition, noted that the forms and instructions
(OMB). The timeframe included in the we have tried to minimize the fiscal require States to report on the
rule is based on the requirement that impact of conducting reviews by ‘‘improper authorizations for payment,’’
HHS report a national improper limiting the frequency of reporting to while the definition of ‘‘improper
authorizations for payment rate and every three years and by allowing for payment’’ given in Section 98.100(d) of
amount for the CCDF program in the sampling of cases as part of the review the rule defines improper payment as an
HHS Performance and Accountability of case records. actual payment. Commenters noted that
Report (PAR) beginning with the Fiscal Comment: Several commenters felt the broad language of the proposed rule
Year 2008 PAR. We recognize that the that the annual burden estimate would allow for the imposition of more
timeframe is expedited and will present included in the proposed rule did not extensive review and reporting
challenges for some States. The Child reflect the full implementation cost of requirements than discussed in the
Care Bureau intends to assist States by conducting the error rate review. preamble and included in the
providing significant technical Commenter’s cited additional travel and information collection forms and
assistance and training to help them mailing costs, staff hiring and training, instructions. Commenters recommended
implement the error rate review process updating automated computer systems, that we amend the rule to define
within the prescribed timeline. and costs associated with accessing hard ‘‘improper payment’’ consistently with
Comment: Three commenters noted copy records for the review process. the forms and instructions.
that under the proposed timeframe some Commenters found the estimated cost in Response: This deviation between the
States will be participating the NPRM of approximately $150,000 rule and information collection forms
simultaneously in Medicaid’s Payment for a single jurisdiction to conduct its and instructions is intentional. The
Error Rate Measurement Project (PERM) case reviews and prepare the required terms ‘‘error’’ and ‘‘improper payment’’
and the CCDF error rate reporting cycle. reports to be insufficient. One have purposefully been defined broadly
Commenters felt that concurrent commenter cited that travel costs alone enough in the final rule to encompass
operation of these projects would create would exceed the federally estimated reporting on all possible types of errors
an extraordinary work burden, and cost. Commenters estimated the full and improper payments, and are
asked that States not be subject to error implementation cost as ranging from 40 consistent with the definitions used in
rate reporting by multiple Federal percent higher to as much as four times the Improper Payments Information Act
agencies within the same year. the proposed $150,000. (IPIA). Section 98.100 paragraph (c)
Response: States were randomly Response: We agreed with these defines the term ‘‘error’’ and paragraph
selected to participate in a three-year comments and have revised the annual (d) defines the term ‘‘improper
rotational cycle to arrive at a valid burden estimates for conducting the payment.’’ The important distinction
nationally representative improper error rate case review and preparing the between the two terms is that every
authorizations for payment rate and three required reports in compliance improper payment is the result of an
amount for child care. The sampling with the final rule. The cost estimate error however, not every error results in
approach yielded a mix of county- analysis was increased to reflect an improper payment. Error is defined
administered and State-administered comments that costs of preparation, as any violation or misapplication of
programs and programs serving both training, programming automated statutory, contractual, administrative, or
large and small numbers of children systems, and other support activities other legally applicable requirements
each year. Selectively excluding States associated with the information governing the administration of CCDF
would undermine this methodology. collection forms were underestimated in grant funds, regardless of whether such
The rotational cycle also allows the proposed rule. States vary greatly in violations result in an improper
jurisdictions to plan for future reviews their systems and personnel capacity payment. An improper payment is
because they know in advance in which and the burden of implementing the defined to mean any payment of CCDF
year they will be measured. final rule may disproportionately grant funds that should not have been
impact some States more than others. made or that was made in an incorrect
Negative Fiscal Impact on States The revised annual burden estimates amount (including overpayments and
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Comment: Several commenters argued account for these differences among underpayments) under statutory,
that the proposed rule would have a States and reflect average burden. contractual, administrative or other
wide range of negative fiscal and However, as States implement this legally applicable requirements
operational impacts on States and that methodology, we encourage all States to governing the administration of CCDF
the additional costs of conducting the keep track of the burden associated with grant funds, including any payment of

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CCDF grant funds to an ineligible clients are deemed eligible for CCDF used to provide child care subsidies
recipient, any payment of CCDF grant and authorized for a range of services impacted in the sample.
funds for an ineligible service, any and a subsidy rate, but then choose a Response: We recognize that many
duplicate payment of CCDF grants funds particular service from that range and States do not serve children exclusively
and payments of CCDF grant funds for receive actual payment based on the with CCDF funds. Many States combine
services not received. appropriate applied subsidy. CCDF and non-CCDF funds to serve the
At this time, we are implementing Response: We acknowledge that State child care needs of their State—referred
this rule narrowly, collecting data from policies regarding eligibility to as ‘‘pooling’’ funds—and may be
States on improper authorizations for determination and subsidy payment unable to isolate those cases served only
payment due to administrative error in vary in the extent to which they are by CCDF funds. We have modified the
client eligibility determination because interrelated. As long as the client’s information collection forms and
we believe that improper authorizations eligibility and authorization for instructions to allow States that pool
for payment are closely related to payment is correctly determined there is child care funds (and correspondingly
improper payments. The forms and no error. If the authorized payment draw their sample for the error rate
instructions related to the regulation range properly reflects the client’s review from the universe of cases served
deal only with these errors. (Note: More eligibility status and need for care there by these combined funds) to multiply
information on the forms and is no improper authorization for the total pooled child care funds by a
instructions that accompany this payment. The initial error rate percentage that reflects the proportion
regulation can be found in the methodology is focused on client of these funds that are CCDF funds (also
Regulatory Impact Analysis—Paperwork eligibility, and authorization to receive referred to as a ‘‘pooling factor’’) when
Reduction Act section of this rule.) a subsidy is indicative of whether the calculating the total estimated amount
Eligibility determination and payment eligibility determination process was of annual improper authorizations for
authorization are the first steps in the properly conducted. Further, we payment. This will more accurately
child care subsidy process and errors received comments from a number of reflect the amount of improperly spent
made at this stage are likely to affect the States indicating that their CCDF funds in those States that
administration of the entire program. administrative procedures do align with combine CCDF with non-CCDF funds to
However, the regulatory language in the the error rate methodology. These provide child care services.
final rule provides flexibility to allow commenters said that there was not a
for changing or expanding the error rate Anticipated Problems With Sampling
distinction between an authorization for
methodology if future circumstances Methodology and Record Review
payment and actual payment in their
warrant doing so. Should we decide to processing of claims for service, and Comment: Some commenters thought
revise or broaden the examination of thus there would be little additional that the proposed sampling frame would
‘‘error’’ and ‘‘improper payment’’ we value to expanding the measurement of be a burden for States with smaller
would provide advance notice and an improper payments beyond improper caseloads and suggested the sample size
opportunity for public comment authorizations for payment. be determined based on the universe of
through the information collection cases in a particular State.
process. Multiple and Combined Funding Response: Under § 98.101, Case
Comment: Several commenters asked Sources for Child Care Review Methodology, the error reports
that we clearly differentiate between Comment: Several commenters required by this final rule must be based
administrative errors and errors requested that the proposed rule apply on comprehensive reviews of case
involving the independent verification only to those cases reported on the records conducted in accordance with
of eligibility and authorization data ACF–801 reporting form to define the the methodology detailed in this final
elements. Commenters recommended sample population as only those cases rule and associated information
that we amend the language in the paid for with CCDF and pooled funds. collection forms and instructions. In
proposed rule limiting improper Commenters were concerned that purely determining which case records to
authorizations for payment— ‘‘based on State-funded child care services also review, States, the District of Columbia,
an administrative misapplication of would be accountable to the proposed and Puerto Rico must select a random
statutory or other legally applicable rule. sample of 271 (or 276) child records to
requirements.’’ Response: This final rule applies to all achieve the calculation of an estimated
Response: We believe that the review child care cases served with CCDF grant annual amount of improper
of administrative errors in eligibility funds, including Federal Discretionary authorizations for payment with a 90
determination should be based on Funds (which includes any funds percent confidence interval of +/¥5.0
policies States have in place. If a State transferred from the Temporary percent. We believe this sampling frame
has established an eligibility verification Assistance for Needy Families Block will achieve statistically valid data with
policy that requires caseworkers to Grant), Mandatory and Matching Funds the desired confidence levels. Sampling
independently verify eligibility through and State Matching and Maintenance-of- the same number of cases, regardless of
a phone call or otherwise, then this Effort (MOE) Funds. In States that caseload size, standardizes the
should be documented and supported in cannot separately report on cases served methodology across States and reflects
the case record. The error rate record with CCDF funds only, the rule applies accepted practice for achieving the
review process itself does not require to cases served by all child care funds required precision.
reviewers to independently verify pooled with CCDF. For many States, Comment: Several commenters
eligibility or other authorization data this will correspond to those cases opposed the requirement to draw the
elements. reported on the ACF–801 reporting sample of cases from 12 monthly
Comment: A few commenters were form. sampling frames and suggested that
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concerned that the initial error rate Comment: One commenter suggested States be allowed to choose a particular
methodology’s focus on eligibility that we allow States that pool CCDF and month from which to draw the sample
determination and authorization for non-CCDF funds to use the percentage for the error rate review.
payment does not mirror administrative of total CCDF expenditures to calculate Response: We believe the sampling
procedures for many States in which an estimated amount of CCDF funds methodology included in the rule

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reduces the risk of bias in annual flexibility to define the term ‘‘case’’ to reporting cycle concludes after the grant
estimates associated with selection of be a child or a family. year for which an obligation is paid to
the sample in particular months and Response: For initial implementation a recipient, States that recover payments
accounts for variation that may occur of the error rate methodology we intend may be acting after the obligation
throughout the year. If States were to for the error rate review to apply to period, and thus must return the money
review less than twelve months for the child records and this is stated in the to the Federal government. Commenters
sampling frame, the resulting error rate information collection forms and recommended that any payments
would not be representative of the entire instructions. States do not have the recouped through the proposed rule be
year. flexibility to determine whether the case committed to program reinvestment and
Comment: A few commenters pointed record should be based on the child or error rate reduction efforts.
out that some States do not have the family. However, consistent with the Response: Pursuant to CCDF
statewide data systems, particularly broader intent of the final rule, the regulations at 45 CFR 98.60(i), a Lead
States that are county-administered, or regulatory language at 98.101(a) Agency is required to recover child care
do not have a system advanced enough continues to use the more inclusive payments that are the result of fraud.
to support the sampling methodology in term ‘‘case record’’ to allow for future The Lead Agency has discretion as to
the proposed rule. Commenters adjustments of the error rate whether to recover misspent funds that
recommended that States be given methodology. The reference to ‘‘child were not the result of fraud, such as in
flexibility to define the case review record’’ also included at 98.101(a) has
cases of administrative error.
process based on the availability of data been changed to ‘‘case record’’ to
Improperly spent funds are subject to
and case file information systems that eliminate any confusion.
disallowance regardless of whether the
exist in each State. Disallowance and Recovery of Funds State pursues recovery.
Response: A standard sampling In the event that improper payments
Comment: Many commenters did not
methodology is necessary to ensure understand the reference to disallowed identified through the case review
integrity and promote uniformity across funds in the proposed rule, given that process are recovered, 45 CFR 98.60(g)
States—particularly since State results the preamble and the information provides that such payments shall (1) If
will be used to calculate a national collection forms and instructions clearly received by the Lead Agency during the
measure for improper payments. We stated the focus of the review to be on applicable obligation period (described
understand automated systems capacity improper authorizations for payment. in 45 CFR 98.60(d) & (e)), be used for
varies across States and that some States Commenters were further concerned activities specified in the Lead Agency’s
may have more difficulty in obtaining that interest would be owed to the approved plan and must be obligated by
their sample and associated case Federal government on disallowances. the end of the obligation period; or (2)
records. For this reason we have Commenters thought that as long as the if received after the end of the
increased the burden estimate case review is limited to improper applicable obligation period, be
associated with the information authorizations for payment it would be returned to the Federal government.
collection forms to reflect additional incorrect to assume that an improper
costs faced by States to implement the States may act to recover improper
payment in the amount of the payments as soon as they are identified
sampling methodology. authorization resulted, meaning States and need not wait until the end of the
Comment: A number of commenters would be unjustifiably penalized. Federal error rate reporting cycle.
thought that accessing hard copy case Response: In order for child care
records to conduct the record review subsidies to be received by eligible We do not have statutory authority to
process would require State staff to recipients, States need to accurately waive requirements related to funds that
travel long distances in order to pick-up authorize payment for child care are recovered by Lead Agencies or
and/or review records or would require services. It is our assumption that an mandated obligation and liquidation
the case records to be mailed to the improper authorization for payment will periods.
review location and require substantial result in an improper payment which Penalties or Incentives Associated With
postal costs. Commenters felt that there will be subject to a disallowance. Error Rates
should be consideration in the proposed However, if a State can demonstrate that
rule allowing for incomplete reviews an authorized improper payment was Comment: Two commenters asked
due to inability to locate case records. not actually made, that dollar amount whether a State would be penalized if
Response: We recognize that States would not be disallowed. Any actual a certain error rate is found or if
have different recordkeeping procedures improper payments related to specific incentives would be offered for high
and may face additional costs to locate cases in the sample are subject to performing States.
records for the review. As previously disallowance in accordance with Response: While States are subject to
stated, we have tried to build these costs procedures set forth in 45 CFR 98.66 of disallowances for any identified
into the revised annual burden estimate the CCDF regulations. Section improper payments (as they would be
in the final rule. The sampling process 98.66(3)(j) states that disallowances are for any expenditures not made in
requires States to select at least three subject to interest from the date of accordance with CCDF regulations or
alternate replacement cases that can be notification of the disallowance. When the approved Plan identified outside of
used in the event a case cannot be an improper authorization for payment the error rate review process), there will
reviewed for some valid reason. is identified during the case record not be penalties or incentives based on
Comment: Several commenters were review process, the ACF regional office State error rates. We view the State error
unclear about the unit of measurement will work with the State to determine if rate to be primarily useful for the States
for drawing the sample. Section an improper payment was made and the to inform quality control initiatives and
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98.101(a) of the proposed rule refers to amount of the disallowance, if improve program integrity. An incentive
both ‘‘case records’’ and ‘‘child appropriate, using its customary for States to decrease error rates and
records.’’ Commenters recommended procedures. improper authorizations for payment is
the rule and information collection Comment: A few commenters pointed the increased availability of funds to
forms and instructions allow States out that if the proposed error rate serve CCDF eligible families.

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Rule Undermines Existing State Efforts ability to set its future targets based on payment levels could fluctuate from
Comment: Two commenters believed their specific circumstances, including month to month, and States have
the focus in the proposed rule on client prior efforts to control improper discretion to determine the magnitude
eligibility determination would be payments. Additionally, the reported of changes that must be reported and
counterproductive for States that have State error and improper authorizations applied in calculating CCDF benefits.
existing strategies with proven results in for payment rates are not tied to any The commenter felt that, similarly,
reducing improper payments. penalties. The State baseline and target small fluctuations in a clients’ financial
Commenters felt the proposed rule setting should be used to inform status should not be considered in the
might decrease focus in some States on existing prevention efforts and improve calculation of the number and
or validate their effectiveness. percentage of cases with an improper
errors in CCDF provider payments.
We have deleted the parenthetical authorization for payment. The
Response: We support existing State
language at Section 98.102(a)(6) stating commenter recommended clarifying the
efforts to reduce improper payments
that targets for errors and improper regulation to stipulate that changes in
and improve program integrity. States
payments must be lower than the most circumstances that do not need to be
should continue to look at all aspects
recent estimated error rates. We made reported by clients will not be counted
and areas in which there is risk for an
this change recognizing that it is against the States as administrative
improper payment to be made. We possible for a State to achieve a zero
recognize that States are at different errors.
error rate thereby making the Response: The initial methodology for
places in terms of approaches and requirement obsolete.
initiatives to address program integrity. the error rate review process is
We continue to expect States to set developed according to State-
A section in the CCDF State Plan Pre- ambitious targets for reducing improper
Print gives States an opportunity to established policies and procedures in
payments for each reporting cycle. As is place to determine client eligibility for
provide descriptions and information described in the accompanying forms
related to these initiatives. We look CCDF and to authorize payments. The
and instructions, State targets should process examines administrative error
forward to working with States to anticipate continuous improvement. We
ensure that this final rule will based on information in the case record
intend this rule to be written broadly to that is available to the State. If a State
complement, not supersede or accommodate any future efforts to revise
complicate, existing State efforts. does not require a client to report small
or change the error rate reporting changes in financial status this would
Comment: A number of commenters methodology. We believe it is more
thought that establishing a State not violate State policy and it would not
practical to add guidance on setting be considered an error or improper
baseline error rate and setting future future target rates to the information
target rates does not recognize the authorization for payment, provided
collection forms and instructions rather that the small change in financial status
present actions of States to limit their than include it in the regulatory
exposure to incorrect eligibility did not result in a violation of Federal
language. income requirements, which cannot be
authorizations. Commenters thought
that States with more stringent Combining Overauthorizations and waived.
standards for reducing administrative Underauthorizations C. Changes Made in Final Rule
errors in client eligibility determination Comment: One commenter noted that As discussed above, three technical
may be given an incentive to reduce the proposed rule requires States to changes are made to the final rule in
their current efforts in order to establish report a combined ‘‘improper response to public comment. First, the
more feasible future target rates. authorizations’’ figure that sums
Response: Section 98.102 of the final annual burden estimate associated with
overauthorizations and the accompanying information
rule, Content of Error Rate Reports, underauthorizations together. The
addresses submission of baseline reports collection forms and instructions has
commenter thought that reporting only been increased to reflect public
and standard reports. Under paragraph a combined figure could be misleading
(a), in the initial cycle, States, the comments regarding additional costs of
and mask the underlying source of the the error rate reporting review
District of Columbia and Puerto Rico are error. The commenter recommended
required to submit a baseline report associated with staff, travel, accessing
that we require States to report separate records, and automated systems.
listing baseline error rate information figures for overauthorizations and
and targets for the next cycle, as well as Secondly, the word ‘‘child’’after Sec.
underauthorizations along with a 98.101(a) has been replaced with the
information about causes of, and combined figure, and clarify in the
strategies to address, error and word ‘‘case’’to provide consistency in
instructions what amount of actual the terms used to refer to ‘‘record’’in the
information about their information improper payments States are to base an
technology systems. Under proposed regulation. Lastly, we have deleted the
anticipated recovery amount on. parenthetical language at Section
paragraph (b), in subsequent cycles, Response: We agree with the
States, the District of Columbia and 98.102(a)(6) stating that targets for errors
comment and have changed the and improper payments must be lower
Puerto Rico must submit a standard information collection forms and
report that, in addition to updating the then the most recent estimated error
instructions to require States to rates. We intend this rule to be written
information provided in the baseline separately report overauthorizations,
report, enables States, the District of broadly and believe it is more practical
underauthorizations, and the total to add guidance on setting future target
Columbia and Puerto Rico to examine combined figure. We also have clarified
their ability to meet previously rates to the information collection forms
that States should base their expected and instructions rather than include it
submitted targets, set future targets, and recovery amounts on overauthorization
describe strategies to reduce their error in the rule itself.
amounts only.
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rates. V. Regulatory Impact Analyses

Establishing a baseline error rate and Allowing a Threshold for Improper
setting future target rates is essential for Authorizations A. Executive Order 12866
measuring progress and improvement Comment: One commenter argued Executive Order 12866 requires that
over time. Each State will have the that factors affecting authorized regulations be drafted to ensure that

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they are consistent with the priorities C. Assessment of the Impact on Family percentage of improper authorizations
and principles set forth in Executive Well-Being for payment; the average improper
Order 12866. The Department has We certify that we have made an authorization for payment amount; and
determined that this final rule is assessment of this final rule’s impact on the estimated annual amount of
consistent with these priorities and the well-being of families, as required improper authorizations for payment.
principles. under Section 654 of the Treasury and The report also will provide strategies
General Appropriations Act of 1999. for reducing the error rates and allow
Executive Order 12866 encourages
This final rule aims to identify and States, the District of Columbia and
agencies, as appropriate, to provide the Puerto Rico to set target error rates for
public with meaningful participation in reduce errors in the administration of
CCDF funds, thus ensuring that the the next cycle.
the regulatory process. As described Respondents: The fifty States, the
earlier, the Child Care Bureau has program is operated as efficiently and
fairly as possible. Because States receive District of Columbia and Puerto Rico.
consulted with States, the District of
Columbia, and Territories on numerous a fixed allotment of CCDF funds Changes in Estimate of Burden
occasions since 2003 concerning regardless of the number of children
served, fewer improper payments The annual burden in the proposed
different approaches to addressing rule was estimated to be $150,000 per
translates into more funds for use in
improper payments and has field tested respondent. This estimate included the
assisting low-income families in
an error rate methodology in nine cost of drawing the sample of cases from
purchasing child care services,
volunteer pilot States. Specifically, providing comprehensive consumer 12 monthly sampling frames, training
through quarterly conference calls, education to parents and the public and staff, conducting record reviews,
workshops at annual State improving the quality and availability of compiling data, calculating error rates
Administrators Meetings and an child care. and preparing the final report. In
Improper Payments survey, the Child estimating burden, we used information
Care Bureau has engaged States and D. Paperwork Reduction Act based on the error rate pilots and an
Territories in conversations about The final rule requires States, the estimation of the amount of time and
strategies to identify, measure, prevent, District of Columbia and Puerto Rico to cost required to complete various tasks
reduce and collect improper payments. compile information regarding errors associated with each of the three
The Child Care Bureau also has been in made in the administration of CCDF reporting forms: (1) The Record Review
contact with national organizations such funds using an error rate methodology Worksheet, (2) the Data Entry Form, and
as the American Public Human Services established by the Secretary and (3) the State Improper Authorizations
Association, the National Association detailed in this rule and information for Payment Report. In response to
for Program Information and collection forms and instructions. public comments, we have recalculated
Towards this end, this rule will require the burden estimate associated with
Performance Measurement and the
States, the District of Columbia and each of these forms. The final rule
United Council on Welfare Fraud
Puerto Rico to submit reports to the increases the total cost estimate for case
through conferences, meetings and
Department on their findings. reviews and preparing the required
conference calls regarding strategies to reports to approximately $180,000 per
address improper payments. In The Paperwork Reduction Act of 1995
(44 U.S.C. Chap. 35; see 5 CFR 1320) respondent.
addition, we have provided a 60-day In the proposed rule the total burden
requires that the Office of Management
public comment period and have hours associated with the Record
and Budget (OMB) approve all
responded to comments in this final collections of information by a Federal Review Worksheet included sampling,
rule. agency from the public before they can preparation and training, and record
This rule is considered a ‘‘significant be implemented. Respondents are not review. We have increased the burden
regulatory action’’ as defined under required to respond to any collection of associated with the preparation and
Executive Order 12866 and therefore information unless it displays a current training component of this estimate to
has been reviewed by the Office of valid OMB control number. account for additional costs of mailing
Management and Budget. Specifically, The information collections in this hard copy records, traveling to sites
the rule raises ‘‘novel legal or policy rule, described below, are being where records are maintained, or costs
issues arising out of legal mandates, the reviewed by OMB and will not be to enhance automated systems to access
President’s priorities, or the principles effective until they have received OMB case records. Additionally, we have
set forth in the Executive Order.’’ approval. Once they have received OMB increased the burden associated with
approval, ACF will publish a notice in the record review component for
B. Regulatory Flexibility Analysis the Federal Register and make them completion of the Record Review
available on the Child Care Bureau’s Worksheet. Based on public comment
The Regulatory Flexibility Act (RFA) Web page on Addressing Improper we felt the original estimate did not
(5 U.S.C. Ch. 6) requires the Federal Payments at: adequately reflect the burden of
government to anticipate and reduce the programs/ccb/ccdf/ipi/ipi.htm. implementing quality control activities
impact of rules and paperwork Title: Child Care and Development associated with completion of this form.
requirements on small businesses and Fund: Error Rate Report for States, the In the proposed rule, the burden
other small entities. Small entities are District of Columbia and Puerto Rico. hours associated with the Data Entry
defined in the RFA to include small Description: States, the District of Form primarily included the costs of
businesses, small non-profit Columbia and Puerto Rico must prepare consolidating information. The burden
organizations and small governmental and submit to the Department reports of estimate associated with this form has
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entities. This rule will affect only the 50 errors occurring in the administration of been increased to account for public
States, the District of Columbia and CCDF grant funds. They will be required comment regarding costs of writing
Puerto Rico. Therefore, the Secretary to report the percentage of cases with an computer programs and making
certifies that this rule will not have a error; the percentage of cases with an enhancements to automated systems to
significant impact on small entities. improper authorization for payment; the consolidate large quantities of data,

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which were not considered in the completion of this report increased with payment, rather than actual payments,
original estimate. the addition of this task. is less burdensome for States when
Finally, in the proposed rule the The original burden estimate in the reviewing individual case records. We
burden hours associated with the State proposed rule did not account for States believe the benefits of focusing the
Improper Authorizations for Payment in which aggregate information on total individual record reviews on
amount of authorized payments was not authorizations for payments outweighs
Report included the calculation of the
readily available. Obtaining aggregate any additional costs we have added here
findings and discussion of findings and
authorizations for payment information for completing the aggregated State
report preparation. The burden estimate increases burden for States in which Improper Authorizations for Payment
for completion of these two tasks normal reporting requirements involve Report. However, we encourage all
associated with this form was not aggregate payments or total States to keep track of the burden
changed. However, we have added an expenditures, not authorizations for associated with these reporting
additional component necessary for payment. These States will experience requirements—in terms of both time and
completion of this report, which was increased burden for completion of this monetary cost—and to provide us
not previously considered. This report if they are to generate the total for comments through the Paperwork
component is the calculation of the total calculation of the required error Reduction Act information collection
amount of authorizations for payment measure. While it is important to process so that we can accurately
during the review period needed to account for the additional burden account for the burden and more
compute the final error measure. The associated with this task, we continue to precisely determine the benefits and
burden hours associated with believe that reviewing authorizations for costs of these requirements.


Average burden hours per Total burden hours
Number of Yearly submittal
Instrument or requirement respondents* submittals NPRM Final rule
NPRM Final rule

Record Review Worksheet ...................................... 17.33 **271 13.74 15.43 64,562 72,478
Data Entry Form ...................................................... 17.33 **271 .14 .17 652 815
State Improper Payments Report ............................ 17.33 1 367 627 6360 10,864

Estimated Total Annual Burden Hours ............. ........................ ........................ .................... .................... 71,574 84,157
* States, the District of Columbia and Puerto Rico will compile and submit error rate reports in staggered three-year cycles.
** These burden estimates are based on a review of 271 cases, which is estimated to be the amount needed to meet the sampling require-
ments of the rule.

E. Unfunded Mandates Reform Act of government and the States that was Development Block Grant; 93.596, Child Care
1995 intended by the Framers of the Mandatory and Matching Funds)
Section 202 of the Unfunded Constitution, to ensure that the Dated: June 22, 2007.
Mandates Reform Act of 1995 (UMRA) principles of federalism established by Daniel C. Schneider,
requires that a covered agency prepare the Framers guide the executive Acting Assistant Secretary for Children and
a budgetary impact statement before departments and agencies in the Families.
promulgating a rule that includes any formulation and implementation of Approved: July 19, 2007.
Federal mandate that may result in the policies, and to further the policies of Michael O. Leavitt,
expenditure by State, local and tribal the Unfunded Mandates Reform Act.’’
Secretary, Department of Health and Human
governments, in the aggregate, or by the The Secretary certifies that this final Services.
private sector, of $100 million or more rule does not have a substantial direct
in any one year. effect on States, on the relationship ■ For the reasons set forth in the
The total annual cost burden of between the Federal government and preamble, the Administration for
having 17.33 respondents, the average the States, or on the distribution of Children and Families amends part 98
number required in any year, to conduct power and responsibilities among the of title 45 of the Code of Federal
error rate case reviews and prepare the various levels of government. This final Regulations as follows:
required reports would be rule does not preempt State law and
approximately $3.1 million. Thus, this does not impose unfunded mandates. PART 98—CHILD CARE AND
final rule will not result in the DEVELOPMENT FUND
This final rule does not contain
expenditure by State, territorial, local regulatory policies with federalism
and tribal governments, in the aggregate, ■ 1. The authority for part 98 continues
implications that would require specific to read:
or by the private sector, of $100 million consultations with State or local elected
or more in any one year. officials. Authority: 42 U.S.C. 618, 9858.
F. Congressional Review List of Subjects in 45 Part 98 ■ 2. Amend 45 CFR part 98 to add
This final rule is not a major rule as Subpart K to read as follows:
defined in 5 U.S.C. 804. Administrative practice and
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procedure, Day care, Grant programs, Subpart K—Error Rate Reporting

G. Executive Order 13132 Reporting and recordkeeping
Executive Order 13132 guarantees requirements. 98.100 Error Rate Report.
‘‘the division of governmental (Catalogue of Federal Domestic Assistance 98.101 Case Review Methodology.
responsibilities between the national Programs: 93.575, Child Care and 98.102 Content of Error Rate Reports.

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Subpart K—Error Rate Reporting States, the District of Columbia and improper payments occurring in the
Puerto Rico in complying with this rule, administration of CCDF grant funds,
§ 98.100 Error Rate Report. including preparation of required including Federal Discretionary Funds
(a) Applicability—The requirements reports, shall be considered a cost of (which includes any funds transferred
of this subpart apply to the fifty States, direct service related to eligibility from the TANF Block Grant), Mandatory
the District of Columbia and Puerto determination and therefore is not and Matching Funds and State Matching
Rico. subject to the five percent limitation on and Maintenance-of-Effort (MOE
(b) Generally—States, the District of CCDF administrative costs pursuant to Funds):
Columbia and Puerto Rico shall Section 98.52(a). (1) Percentage of cases with an error
calculate, prepare and submit to the (regardless of whether such error
Department, a report of errors occurring § 98.101 Case Review Methodology.
resulted in an over or under payment),
in the administration of CCDF grant (a) Case Reviews and Sampling—In expressed as the total number of cases
funds, at times and in a manner preparing the error reports required by in the sample with an error compared to
specified by the Secretary in this subpart, States, the District of the total number of cases in the sample;
instructions. States, the District of Columbia and Puerto Rico shall conduct (2) Percentage of cases with an
Columbia and Puerto Rico must use this comprehensive reviews of case records improper payment (both over and under
report to calculate their error rates, using a methodology established by the payments), expressed as the total
which is defined as the percentage of Secretary. For purposes of the case number of cases in the sample with an
cases with an error (expressed as the reviews, States, the District of Columbia improper payment compared to the total
total number of cases with an error and Puerto Rico shall select a random number of cases in the sample;
compared to the total number of cases); sample of case records which is (3) Percentage of improper payments
the percentage of cases with an estimated to achieve the calculation of (both over and under payments),
improper payment (expressed as the an estimated annual amount of expressed as the total dollar amount of
total number of cases with an improper improper payments with a 90 percent improper payments in the sample
payment compared to the total number confidence interval of +/¥5.0 percent. compared to the total dollar amount of
of cases); the percentage of improper (b) Methodology and Forms—States, payments made in the sample;
payments (expressed as the total amount the District of Columbia and Puerto Rico (4) Average amount of improper
of improper payments in the sample must prepare and submit forms issued payments (gross over and under
compared to the total dollar amount of by the Secretary, following the payments, divided by the total number
payments made in the sample); the accompanying instructions setting forth of cases in the sample that had an
average amount of improper payment; the methodology to be used in improper payment (both over and under
and the estimated annual amount of conducting case reviews and calculating payments));
improper payments. The report also will the error rates. (5) Estimated annual amount of
provide strategies for reducing their (c) Reporting Frequency and Cycle—
improper payments (which is a
error rates and allow States, the District States, the District of Columbia and
projection of the results from the sample
of Columbia and Puerto Rico to set Puerto Rico shall conduct case reviews
to the universe of cases statewide during
target error rates for the next cycle. and submit error rate reports to the
(c) Error Defined—For purposes of the 12-month review period) calculated
Department according to a staggered
this subpart, an ‘‘error’’ shall mean any by multiplying the percentage of
three-year cycle established by the
violation or misapplication of statutory, improper payments by the total dollar
Secretary such that each State, the
contractual, administrative, or other amount of child care payments that the
District of Columbia, and Puerto Rico
legally applicable requirements State, the District of Columbia or Puerto
will be selected once, and only once, in
governing the administration of CCDF Rico paid during the 12-month review
every three years.
grant funds, regardless of whether such (d) Access to Federal Staff—States, period
violation results in an improper the District of Columbia and Puerto Rico (6) For each category of data listed
payment. must provide access to Federal staff to above, targets for errors and improper
(d) Improper Payment Defined—For participate and provide oversight in payments in the next reporting cycle;
purposes of this subpart, ‘‘improper case reviews and error rate calculations, (7) Summary of methodology used to
payment.’’ including access to forms related to arrive at estimate, including fieldwork
(1) Means any payment of CCDF grant determining error rates. preparation, sample generation, record
funds that should not have been made (e) Record Retention—Records review and error rate computation
or that was made in an incorrect amount pertinent to the case reviews and processes;
(including overpayments and submission of error rate reports shall be (8) Discussion of the causes of
underpayments) under statutory, retained for a period of five years from improper payments identified and
contractual, administrative, or other the date of submission of the applicable actions that will be taken to correct
legally applicable requirements error rate report or, if the error rate those causes in order to reduce the error
governing the administration of CCDF report was revised, from the date of rates;
grant funds; and submission of the revision. Records (9) Description of the information
(2) Includes any payment of CCDF must be made available to Federal staff systems and other infrastructure that
grant funds to an ineligible recipient, upon request. assist the State, the District of Columbia
any payment of CCDF grant funds for an and Puerto Rico in identifying and
ineligible service, any duplicate § 98.102 Content of Error Rate Reports. reducing improper payments, or if the
payment of CCDF grant funds and (a) Baseline Submission Report—At a State, the District of Columbia or Puerto
payments of CCDF grant funds for minimum, States, the District of Rico does not have these tools, a
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services not received. Columbia and Puerto Rico shall submit description of actions that will be taken
(e) Costs of Preparing the Error Rate an initial error rate report to the to acquire the necessary information
Report—Provided the error rate Department, as required in § 98.100, systems and other infrastructure; and
calculations and reports focus on client which includes the following (10) Such other information as
eligibility, expenses incurred by the information on errors and resulting specified by the Secretary.

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50900 Federal Register / Vol. 72, No. 171 / Wednesday, September 5, 2007 / Rules and Regulations

(b) Standard Report—At a minimum, provide head protection when an 2992, facsimile: (202) 366–3820, E-mail:
the State, the District of Columbia and occupant’s head strikes upper interior
Puerto Rico shall submit an error rate components, such as pillars, side rails, SUPPLEMENTARY INFORMATION:
report to the Department, as required in headers, and the roof during a crash.
§ 98.100, made subsequent to the While these requirements already apply Table of Contents
baseline submission report as set forth to most vehicles, the compliance date I. Background
in § 98.102(a) which includes the for altered vehicles and vehicles built in a. Previous History of Head Protection
following information on errors and two or more stages is September 1, 2007. Requirements of FMVSS No. 201
resulting improper payments occurring In April 2006, we responded to two b. Petitions for Rulemaking and Agency
in the administration of CCDF grant petitions for rulemaking by proposing Response
II. Summary of the Notice of Proposed
funds, including Federal Discretionary certain amendments to the head
Funds (which includes any funds protection requirements as they apply to a. Proposal To Limit the Area Subject to
transferred from the TANF Block Grant), these vehicles. We also proposed to the FMH Impacts in Certain Vehicles
Mandatory and Matching Funds and delay the compliance date of the b. Proposal To Exclude Vehicles Without a
State Matching and Maintenance-of- requirements for these vehicles. In this Finished Occupant Compartment From
Effort (MOE Funds): document, after carefully considering the FMH Impact Requirements
(1) All the information reported in the both the safety benefits of the upper c. Question Regarding Multistage Vehicles
baseline submission, as set forth in interior protection requirements and With Raised Roofs
§ 98.102(a), updated for the current practicability concerns relating to d. Change of Effective Date
III. Public Comments
cycle; vehicles built in two or more stages and
IV. The Final Rule and Response to Public
(2) For each category of data listed in certain altered vehicles, we are Comments
§ 98.102(a)(1) through (5), States, the amending the standard to limit these a. Limitation of the Areas Subject to
District of Columbia and Puerto Rico requirements to only the front seating FMVSS No. 201
must include data and targets from the positions of those vehicles. In addition, b. Areas Behind the Partition
prior cycle in addition to data from the we are excluding from the requirements c. Conversion Vans and Recreational
current cycle and targets for the next a narrow group of multi-stage vehicles Vehicles
cycle; delivered to the final stage manufacturer d. Multi-Stage Vehicles Completed From a
(3) Description of whether the State, without an occupant compartment. Cutaway Chassis
the District of Columbia or Puerto Rico e. Delay of Compliance Date
Finally, we have decided to delay the
f. Miscellaneous Issues
met error rate targets set in the prior compliance date of the head impact g. Effective Date
cycle and, if not, an explanation of why protection requirements as they apply to V. Regulatory Analyses and Notices
not; final stage manufacturers and alterers VI. Regulatory Text
(4) Discussion of the causes of until September 1, 2009.
improper payments identified in the I. Background
DATES: The amendments made by this
prior cycle and actions that were taken final rule are effective September 1, a. Previous History of Head Protection
to correct those causes, in addition to a 2007. The compliance date for the head Requirements of FMVSS No. 201
discussion on the causes of improper impact protection requirements for
payments identified in the current cycle On August 18, 1995, the National
altered vehicles and vehicles built in Highway Traffic Safety Administration
and actions that will be taken to correct two or more stages is September 1, 2009.
those causes in order to reduce the error (NHTSA) issued a final rule (August
Petitions for reconsideration: Petitions
rates; and 1995) amending Federal Motor Vehicle
for reconsideration of this final rule
(5) Such other information as Safety Standard (FMVSS) No. 201,
must be received not later than October
specified by the Secretary. ‘‘Occupant Protection in Interior
22, 2007.
Impact,’’ to provide enhanced head
[FR Doc. 07–4308 Filed 8–29–07; 3:01 pm] ADDRESSES: Petitions for reconsideration impact protection.1 The August 1995
BILLING CODE 4184–01–P should refer to the docket number above final rule required passenger cars, and
and be submitted to: Administrator, trucks, buses and multipurpose
National Highway Traffic Safety passenger vehicles (MPVs) with a gross
DEPARTMENT OF TRANSPORTATION Administration, 1200 New Jersey vehicle weight rating (GVWR) of 4,536
Avenue, SE., West Building, 4th Floor, kilograms (10,000 pounds) or less, to
National Highway Traffic Safety Washington, DC 20590. provide protection when an occupant’s
Administration See the SUPPLEMENTARY INFORMATION head strikes upper interior components,
portion of this document (Section V; including pillars, side rails, headers,
49 CFR Part 571 Rulemaking Analyses and Notices) for and the roof, during a crash. The final
DOT’s Privacy Act Statement regarding rule set minimum performance
[Docket No. NHTSA 2007–29131]
documents submitted to the agency’s requirements for upper interior
RIN 2127–AI93 dockets. components by establishing target areas
FOR FURTHER INFORMATION CONTACT: The that must be padded or otherwise have
Federal Motor Vehicle Safety
following persons at the National energy absorbing properties to minimize
Standards; Occupant Protection in
Highway Traffic Safety Administration, head injury in the event of a crash. The
Interior Impact
1200 New Jersey Ave., SE., Washington, final rule added procedures for a new
AGENCY: National Highway Traffic DC 20590: in-vehicle component test in which a
Safety Administration (NHTSA), For technical and policy issues: David free-motion head form (FMH) is fired at
Department of Transportation (DOT). Sutula, Office of Crashworthiness certain target locations on the upper
rfrederick on PROD1PC67 with RULES

ACTION: Final rule. Standards, telephone: (202) 366–3273, interior of a vehicle at an impact speed
facsimile: (202) 366–7002, E-mail: of 24 km/h (15 mph). Targets that are
SUMMARY: Our safety standard on
occupant protection in interior impact For legal issues: Ari Scott, Office of 1 See 60 FR 43031, Aug. 18, 1995; Docket No.

requires, in part, that light vehicles the Chief Counsel, telephone: (202) 366– NHTSA–1996–1762–1.

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