[Federal Register Volume 66, Number 226 (Friday, November 23, 2001)]
[Rules and Regulations]
[Pages 58672-58677]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-29174]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

45 CFR Parts 1355, 1356 and 1357


Administration for Children and Families

    Title IV-E Foster Care Eligibility Reviews and Child and Family 
Services State Plan Reviews; Technical Corrections
AGENCY: Administration on Children, Youth and Families (ACYF), 
Administration for Children and Families (ACF), Department of Health 
and Human Services (DHHS).

ACTION: Technical corrections.

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SUMMARY: The Administration for Children and Families is correcting the 
final rule on Title IV-E Foster Care Eligibility Reviews and Child and 
Family Services State Plan Reviews published on January 25, 2000 (65 FR 
4019-4093), and related regulations at 45 CFR parts 1355, 1356 and 
1357.

DATES: Effective November 23, 2001. Comments accepted until January 22, 
2002.

ADDRESSES: Please address comments to Kathleen McHugh, Director of 
Policy, Children's Bureau, Administration on Children, Youth and 
Families, 330 C Street, SW., Washington, DC 20447. Comments will not be 
accepted by telephone.

FOR FURTHER INFORMATION CONTACT: Kathleen McHugh, Children's Bureau, 
202-401-5789.

SUPPLEMENTARY INFORMATION:

I. Background

    The Administration on Children, Youth and Families published a 
final rule on the title IV-E foster care eligibility reviews and the 
child and family services reviews on January 25, 2000, in the Federal 
Register (65 FR 4019-4093). The purpose of the final rule was to 
implement reviews of title IV-E foster care maintenance payments and 
title IV-B and IV-E State plan requirements. The final rule also 
implemented certain requirements of the Social Security Act Amendments 
of 1994; the Multiethnic Placement Act of 1994, as amended; and the 
Adoption and Safe Families Act of 1997. The effective date of the rule 
was March 27, 2000.

II. Need for Technical and Correcting Amendments in 45 CFR Parts 
1355, 1356 and 1357

    In reviewing the final rule, we have identified several technical 
errors, omissions, and obsolete references in the final regulations. In 
addition, certain sections of the existing regulations conflict with 
recent changes in Federal child welfare legislation. We are making 
these technical, conforming amendments to correct and clarify the 
regulations.

Waiver of Notice and Comment Procedures

    The Administrative Procedure Act (5 U.S.C. 55(b)(B)) requires that 
the Department publish a Notice of Proposed Rulemaking unless the 
Department finds, for good cause, that such notice is impracticable, 
unnecessary, or contrary to the public interest. In this instance, we 
are making only technical, nonsubstantive clarifications, corrections, 
and conforming amendments. Accordingly,

[[Page 58673]]

the Department has determined that it would be unnecessary to use 
notice and comment procedures. We will, however, consider comments 
received within 60 days of publication in the Federal Register.
Regulatory Text
    We have made the following technical corrections in the regulatory 
text:

Corrections to Part 1355

     We have removed the definition of Independent Living 
Program (ILP) in Sec. 1355.20(a). The Foster Care Independence Act of 
1999 (12/14/99), Public Law 106-169, renamed and significantly revised 
the program at section 477 of the Social Security Act (the Act), which 
makes the regulatory definition obsolete.
     In Sec. 1355.20(a), we amended the definition of Child 
abuse and neglect to remove the prior cross-reference to an obsolete 
definition in 45 CFR 1340.2. The Child Abuse Prevention and Treatment 
Act (CAPTA) Amendments of 1996 changed the definition of child abuse 
and neglect. Therefore, we have cross-referenced the statutory citation 
rather than the regulatory definition.
     We made the definition of State in Sec. 1355.20(a) 
consistent with Title IV-A of the Act (section 402(a)(3) and section 
419(5)). Title IV-A requires a State that operates a Temporary 
Assistance for Needy Families (TANF) program to certify that it will 
also operate a program under an approved title IV-E State plan. Title 
IV-A defines ``State'' as the 50 States, District of Columbia, Puerto 
Rico, the United States Virgin Islands, Guam and American Samoa 
(section 419(5) of the Act). We are adding Puerto Rico, the Virgin 
Islands, Guam and American Samoa to the definition in Sec. 1355.20 for 
consistency.
     In the definition of Statewide assessment in 
Sec. 1355.20(a) we added a cross-reference to the specific sections in 
1355.33 that contain the requirements for a statewide assessment.
     We corrected the placement of Sec. 1355.20(b) so that it 
follows the entire Sec. 1355.20(a). As published, paragraph (b) was 
misplaced so that it appeared prior to the definition of Statewide 
assessment in Sec. 1355.20(a).
     We amended Sec. 1355.30(n)(2) to correct the prior cross-
reference to 45 CFR 201.6. In accordance with section 1123A of the Act, 
we established procedures in the final rule for determinations 
regarding lack of compliance with title IV-B and IV-E State plan 
provisions; accordingly, the procedures prescribed by Sec. 201.6 are 
applicable only with respect to lack of compliance arising out of an 
unapprovable change in an approved State plan or the failure of a State 
to change its approved plan to conform to a new Federal requirement for 
approval of State plans.
     We deleted Sec. 1355.30(n)(3), which cross-references 45 
CFR 201.7, since there is no statutory basis for a direct appeal to a 
Federal Appeals Court from a Departmental Appeals Board decision 
pertaining to Social Security Act titles IV-B or IV-E. California 
Department of Social Services v. Shalala, 166F.3d 1019 (9th Circuit 
1999).
     In Sec. 1355.32(d)(4), we added the words, ``if the 
provisions for such a plan are applicable'' to the first sentence to 
eliminate an inconsistency between the statute and the regulation. The 
statute does not allow for program improvement prior to a penalty for 
every instance of noncompliance with a State plan requirement in titles 
IV-B or IV-E of the Act. Specifically, section 474(d)(1) of the Act 
makes specific provisions for penalties and corrective action for 
violations of section 471(a)(23) of the Act.
     We have amended Sec. 1355.33(b)(2) to allow States to use 
an alternative data source for the National Child Abuse and Neglect 
Data System (NCANDS) in any child and family services review. As 
originally published the regulatory language limited the use of 
alternative child safety data to the initial child and family services 
review. However, NCANDS is a voluntary reporting system and we did not 
intend to require States to report data to NCANDS, although it is our 
preferred data source.
     In Sec. 1355.33(b), we corrected the numbering for the 
last two paragraphs of that section, which were incorrectly numbered as 
paragraphs (b)(1) and (b)(2). They are now numbered as paragraphs 
(b)(5) and (b)(6).
     In Sec. 1355.33(c)(6) we clarified that the oversample for 
the child and family services reviews will consist of up to 150 foster 
care cases and 150 in-home services cases. To make sure that there is 
an adequate oversample from which to pull additional cases when needed, 
we must ensure that there are a sufficient number of cases of each 
type. In this paragraph, we also clarified the language with regard to 
the discrepancy resolution process. As stated in Sec. 1355.33(d), we 
will use the process to resolve discrepancies between information in 
the statewide assessment and the on-site review. The prior language in 
Sec. 1355.33(c)(6), however, restricted use of the resolution process 
to discrepancies between statewide data indicators and the on-site 
review. As the amended regulation makes clear, we allow a State to 
submit additional information or review additional cases when a 
discrepancy exists between the statewide assessment and the on-site 
review.
     We corrected Sec. 1355.33(d)(2), to specify that the 
oversample for the child and family services reviews will consist of no 
more than 150 foster care cases and 150 in-home services cases.
     The prior regulatory language in Sec. 1355.34(b)(4) 
required the Secretary to develop statewide data indicators for every 
outcome, but it is not currently possible to do this for well-being 
outcomes, since well-being measures are not typically captured in State 
information systems or reported to AFCARS. Therefore, we have amended 
the section to allow but not require the Secretary to develop statewide 
data indicators for outcomes where they do not currently exist.
     In Sec. 1355.34(c)(2)(v), we removed an inconsistency 
between two sections of the regulation. We have clarified that, in a 
child and family services review, we will review the State plan 
requirement that notice and opportunity to be heard is provided to 
foster parents, preadoptive parents and relative caretakers in 
permanency hearings and six-month periodic reviews. The prior language 
stated that we would review to the standard that notice and opportunity 
be provided in any review or hearing held with respect to the child. 
The new language conforms to the State plan requirement as implemented 
by Sec. 1356.21(o).
     We corrected Sec. 1355.34(c)(4)(v), to make it consistent 
with the regulatory requirements in Sec. 1357.15 regarding training.
     We made an editorial change in Sec. 1355.35(e)(1), to 
remove the word ``subsequent.''
     In Sec. 1355.36(b)(5)(i), we corrected the terminology to 
clarify that withholding applies when one of the seven outcomes listed 
in Sec. 1355.34(b)(1) is determined to be out of ``substantial 
conformity.'' The prior reference to ``substantially achieved `` was 
inaccurate because that term applies only to the review of cases on-
site.
     We corrected the penalty references in Sec. 1355.38. The 
published rule followed the statutory requirement that an entity must 
remit title IV-E funds to the Secretary when it is determined to have 
violated section 471(a)(18) of the Act, but did not specify a 
procedure. In Sec. 1355.38(b)(1), we added cross-references to 
paragraphs that specify when and how the entity will be penalized for 
violating section 471(a)(18) of the Act. Entities that violate section 
471(a)(18) of the Act with regard to a person, as determined

[[Page 58674]]

by a DHHS investigation, will be penalized according to paragraph 
(g)(2) of this section. Entities that violate section 471(a)(18) of the 
Act, as determined by a court finding will be penalized according to 
paragraph (g)(4) of this section.
     In Sec. 1355.38(b)(4), we clarify that entities, like 
States, must notify ACF within 30 days of a final court finding of a 
violation of section 471(a)(18) of the Act.
     We corrected Sec. 1355.38(f) to reflect the new name of 
the former Independent Living Program. Public Law 106-169 changed the 
name of the Independent Living Program to the ``Chafee Foster Care 
Independence Program.''
     We included the term ``entity'' in the last sentence of 
Sec. 1355.38(g)(1)(i) in order to highlight paragraph (h) of this 
section as the relevant paragraph for details on how entities must 
remit funds for violating section 471(a)(18) of the Act.
     In Sec. 1355.38(g)(2), we clarify that an entity must 
remit the funds paid to it by the State during the quarter in which it 
is notified by ACF of a section 471(a)(18) violation.
     We corrected Sec. 1355.38(g)(4) to specify that entities 
must also remit title IV-E funds to the Secretary, when a court finds 
that the entity has violated section 471(a)(18) of the Act, for the 
quarter during which the court makes the finding.
     In Sec. 1355.38(h), we added a reference to section 
474(d)(2) of the Act to incorporate the statutory enforcement 
authority.
     We added cross references to paragraphs (g)(2) and (g)(4) 
in Sec. 1355.38(h)(2) to clarify the distinction between the penalty 
provisions for entities that are found to have violated section 
471(a)(18) of the Act with regard to an individual as a result of an 
DHHS investigation and as a result of a court finding. The prior 
language inaccurately required entities to remit funds for the quarter 
in which they are notified of a violation in both circumstances. In 
fact, however, when an entity is found to have violated section 
471(a)(18) of the Act as a result of a court finding, it is to remit 
funds for the quarter in which the court finding was made.
     We amended the parenthetical note following Sec. 1355.40 
to remove an obsolete date and insert language consistent with the 
requirements of the Paperwork Reduction Act of 1995.

Corrections to Part 1356

     We deleted Sec. 1356.20(c), as it has been superseded by 
the 1994 amendments to the Social Security Act made by Public Law 104-
432. Section 1356.20 applied the withholding of payment provisions in 
45 CFR 201.6(e) to AFCARS. However, section 1123A of the Act applies to 
AFCARS.
     We corrected the parenthetical note following Sec. 1356.20 
to include language that is consistent with the Paperwork Reduction Act 
of 1995, Public Law 104-13.
     We corrected the cross-reference in Sec. 1356.21(b)(1)(i) 
to accurately reference physical or constructive removals, but not 
voluntary placements, as the starting point for determining when a 
judicial determination of reasonable efforts to prevent a child's 
removal from the home is necessary for title IV-E purposes. The prior 
cross-reference might have been misinterpreted as requiring judicial 
determinations of reasonable efforts to prevent a child's removal from 
the home in voluntary placement situations.
     We corrected Sec. 1356.21(b)(2)(ii) to clarify that a 
State may not claim Federal Financial Participation (FFP) for an 
otherwise eligible child from the date when it should have obtained a 
judicial determination with regard to reasonable efforts to finalize a 
permanency plan until the State actually obtains such a determination.
     We correct the parenthetical note following 
Sec. 1356.21(g)(5) to insert language consistent with current Paperwork 
Reduction Act requirements.
     In Sec. 1356.21(i)(1)(i)(A), we added a cross-reference 
for the regulatory definition of the date a child is considered to have 
entered foster care.
     In Sec. 1356.21(j), we added the citation for the 
definition of foster care maintenance payments.
     Prior Sec. 1356.21(k)(1)(i) implied that a relative has 
the authority to enter into a voluntary placement agreement that leads 
to a child's removal from the home for title IV-E purposes. The statute 
at section 472(f) of the Act, however, limits this authority to parents 
and guardians. Accordingly, we have corrected the language in this 
section to conform with the statute.
     In Sec. 1356.22(a)(3), we are adding a cross-reference to 
Sec. 1356.21(e) pertaining to trial home visits to the voluntary 
placement agreement requirements.
     In Sec. 1356.50, we have corrected the cross-references in 
paragraph (c) so that the new appeal procedures outlined in 
Sec. 1355.39 apply.
     We deleted the parenthetical note following Sec. 1356.60 
because the OMB control number cited was no longer valid. The 
information collection referred to was the quarterly financial report 
for a State's expenditures and estimates of title IV-E funds. That 
reporting form (ACF-IV-E-1) displays the current OMB control number; 
thus, it is unnecessary to publish the number in regulation.
     We reorganized Sec. 1356.71(a)(3) for clarity and 
clarified the timeframe for subsequent title IV-E foster care 
eligibility reviews in new Sec. 1356.71(a)(3)(ii). While it was 
intended that all States have a subsequent review at three-year 
intervals as stated in the preamble discussion on page 4072 of the 
published rule, we did not expressly address the situation of States 
that are found to be out of substantial compliance in the primary 
review. Such States, in accordance with the general rule, must have 
another primary review within three years of the previous secondary 
review.
     We have clarified Sec. 1356.71(j)(2) so that, as explained 
in the preamble at page 4073 of the published rule, administrative 
costs claimed under title IV-E associated with ineligible cases, will 
be disallowed.
     We have deleted Sec. 1356.80, which was rendered obsolete 
by the enactment of Public Law 106-169.

Corrections to Part 1357

     We deleted the prior note following Sec. 1357.15 because 
it was obsolete. We have provided the current OMB control number for 
the child and family services plan and language consistent with the 
Paperwork Reduction Act.
     We made the same changes regarding the OMB control number 
for the note following Sec. 1357.16 with regard to the annual progress 
and services report.

Impact Analysis

    No impact analysis is needed for these technical corrections. The 
impact of the necessary corrections falls within the analysis of the 
final rule published in the Federal Register on January 25, 2000 (65 FR 
4019-4093).

List of Subjects

45 CFR Part 1355

    Adoption and foster care, child welfare, Grant programs--Social 
programs.

45 CFR Part 1356

    Adoption and foster care, Grant programs--Social programs.

45 CFR Part 1357

    Child and family services, child welfare, Grant programs-Social 
programs.

(Catalog of Federal Domestic Assistance Program Numbers 93.658, 
Foster Care

[[Page 58675]]

Maintenance; 93.659, Adoption Assistance; and 93.645, Child Welfare 
Services--State Grants)

    Dated: October 16, 2001.
Brian P. Burns,
Deputy Assistant Secretary for Information Resources and Management.

    For the reasons set forth in the preamble, 45 CFR parts 1355, 1356, 
and 1357 are amended by making the following technical changes, 
corrections and amendments:

PART 1355--GENERAL

    1. The authority citation for part 1355 continues to read as 
follows:

    Authority: 42 U.S.C. 620 et seq., 42 U.S.C. 670 et seq., 42 
U.S.C. 1302.

    2. Amend Sec. 1355.20(a) by:
    a. Removing the definition of Independent Living Program (ILP);
    b. Revising the definition of Child abuse and neglect;
    c. Revising the second sentence of the definition of State;
    d. Revising the definition of Statewide assessment; and
    e. Correctly designating paragraph (b) to follow the definition of 
Statewide assessment.
    The revisions read as follows:


Sec. 1355.20  Definitions.

    (a) * * * * *
    Child abuse and neglect means the definition contained in 42 U.S.C. 
5106(g)(2).
* * * * *
    State * * * For title IV-E the term ``State'' means the 50 States, 
the District of Columbia, the Commonwealth of Puerto Rico, the United 
States Virgin Islands, Guam, and American Samoa.
* * * * *
    Statewide assessment means the initial phase of a full review of 
all federally-assisted child and family services programs in the 
States, including family preservation and support services, child 
protective services, foster care, adoption, and independent living 
services as described in Sec. 1355.33(b) of this part, for the purpose 
of determining the State's substantial conformity with the State plan 
requirements of titles IV-B and IV-E as listed in Sec. 1355.34 of this 
part.
* * * * *

    3. Amend Sec. 1355.30 by revising paragraph (n)(2), removing 
paragraph (n)(3), and redesignating paragraphs (n)(4) and (n)(5) as 
paragraphs (n)(3) and (n)(4) respectively to read as follows:


Sec. 1355.30  Other applicable regulations.

* * * * *
    (n) * * *
    (2) Sec. 201.6--Withholding of payment; reduction of Federal 
financial participation in the costs of social services and training. 
(Applicable only to an unapprovable change in an approved State plan, 
or the failure of the State to change its approved plan to conform to a 
new Federal requirement for approval of State plans.)
* * * * *

    4. Amend the first sentence in Sec. 1355.32(d)(4) to read as 
follows:


Sec. 1355.32  Timetable for the reviews.

* * * * *
    (d) * * *
    (4) If the partial review determines that the State is not in 
compliance with the applicable State plan requirement, the State must 
enter into a program improvement plan designed to bring the State into 
compliance, if the provisions for such a plan are applicable. * * *

    5. Amend Sec. 1355.33 by:
    a. Revising paragraph (b)(2);
    b. Correctly designating the second occurrence of paragraphs (b)(1) 
and (2) as (b)(5) and (6);
    c. Revising the first and third sentences of paragraph (c)(6); and
    d. Revising the second sentence of paragraph (d)(2).
    The revisions read as follows:


Sec. 1355.33  Procedures for the review.

* * * * *
    (b) * * *
    (2) Assess the outcome areas of safety, permanence, and well-being 
of children and families served by the State agency using data from 
AFCARS and NCANDS. For the initial review, ACF may approve another data 
source to substitute for AFCARS, and in all reviews, ACF may approve 
another data source to substitute for NCANDS. The State must also 
analyze and explain its performance in meeting the national standards 
for the statewide data indicators;
* * * * *
    (c) * * *
    (6) The sample of 30-50 cases reviewed on-site will be selected 
from a randomly drawn oversample of no more than 150 foster care and 
150 in-home services cases. * * * The additional cases in the 
oversample not selected for the on-site review will form the sample of 
cases to be reviewed, if needed, in order to resolve discrepancies 
between the statewide assessment and the on-site reviews in accordance 
with paragraph (d)(2) of this section.
    (d) * * *
    (2) * * * ACF and the State will determine jointly the number of 
additional cases to be reviewed, not to exceed 150 foster care cases or 
150 in-home services cases to be selected as specified in paragraph 
(c)(6) of this section.
* * * * *

    6. Amend Sec. 1355.34 by revising the first two sentences of 
paragraph (b)(4) and paragraphs (c)(2)(v) and (c)(4)(v) to read as 
follows:


Sec. 1355.34  Criteria for determining substantial conformity.

* * * * *
    (b) * * *
    (4) The Secretary may, using AFCARS and NCANDS, develop statewide 
data indicators for each of the specific outcomes described in 
paragraph (b)(1) of this section for use in determining substantial 
conformity. The Secretary may add, amend, or suspend any such statewide 
data indicator(s) when appropriate.
* * * * *
    (c) * * *
    (2) * * *
    (v) Provide foster parents, preadoptive parents, and relative 
caregivers of children in foster care with notice of and an opportunity 
to be heard in permanency hearings and six-month periodic reviews held 
with respect to the child (sections 422(b)(10)(B)(ii), 475(5)(G) of the 
Act, and 45 CFR 1356.21(o)).
* * * * *
    (4) * * *
    (v) Provides training for current or prospective foster parents, 
adoptive parents, and the staff of State-licensed or State-approved 
child care institutions providing care to foster and adopted children 
receiving assistance under title IV-E that addresses the skills and 
knowledge base needed to carry out their duties with regard to caring 
for foster and adopted children.
* * * * *

    7. Amend Sec. 1355.35 by revising paragraph (e)(1) to read as 
follows:


Sec. 1355.35  Program improvement plans.

* * * * *
    (e) * * *
    (1) The methods and information used to measure progress must be 
sufficient to determine when and whether the State is operating in 
substantial conformity or has reached the negotiated standard with 
respect to statewide data indicators that failed to meet the national 
standard for that indicator;
* * * * *

    8. Amend Sec. 1355.36 by revising paragraph (b)(5)(i) to read as 
follows:

[[Page 58676]]

Sec. 1355.36  Withholding Federal funds due to failure to achieve 
substantial conformity or failure to successfully complete a program 
improvement plan.

* * * * *
    (b) * * *
    (5) * * *
    (i) Except as provided for in paragraphs (b)(7) and (b)(8) of this 
section, an amount equivalent to one percent of the funds described in 
paragraph (b)(4) of this section for each of the years to which 
withholding applies will be withheld for each of the seven outcomes 
listed in Sec. 1355.34(b)(1) of this part that is determined not to be 
in substantial conformity; and
* * * * *

    9. Amend Sec. 1355.38 by revising the first two sentences of 
paragraph (b)(1) and paragraphs (b)(4), (f), (g)(1)(i), (g)(4), (h) 
introductory text, and (h)(2) to read as follows:


Sec. 1355.38  Enforcement of section 471(a)(18) of the Act regarding 
the removal of barriers to interethnic adoption.

* * * * *
    (b)(1) A State or entity found to be in violation of section 
471(a)(18) of the Act with respect to a person, as described in 
paragraphs (a)(2)(i) and (a)(2)(ii) of this section, will be penalized 
in accordance with paragraph (g)(2) of this section. A State or entity 
determined to be in violation of section 471(a)(18) of the Act as a 
result of a court finding will be penalized in accordance with 
paragraph (g)(4) of this section.* * *
* * * * *
    (4) A State or entity found to be in violation of section 
471(a)(18) of the Act by a court must notify ACF within 30 days from 
the date of entry of the final judgement once all appeals have been 
exhausted, declined, or the appeal period has expired.
* * * * *
    (f) Funds to be withheld. The term ``title IV-E funds'' refers to 
the amount of Federal funds advanced or paid to the State for allowable 
costs incurred by a State for: foster care maintenance payments, 
adoption assistance payments, administrative costs, and training costs 
under title IV-E and includes the State's allotment for the Chafee 
Foster Care Independence Program under section 477 of the Act.
    (g) * * *
    (1) * * *
    (i) A determination that a State or entity is in violation of 
section 471(a)(18) of the Act with respect to a person as described in 
paragraphs (a)(2)(i) and (a)(2)(ii) of this section, or:
* * * * *
    (2) Once ACF notifies a State (in writing) that it has committed a 
section 471(a)(18) violation with respect to a person, the State's 
title IV-E funds will be reduced for the fiscal quarter in which the 
State received written notification and for each succeeding quarter 
within that fiscal year or until the State completes a corrective 
action plan and comes into compliance, whichever is earlier. Once ACF 
notifies an entity (in writing) that it has committed a section 
471(a)(18) violation with respect to a person, the entity must remit to 
the Secretary all title IV-E funds paid to it by the State during the 
quarter in which the entity is notified of the violation.
* * * * *
    (4) If, as a result of a court finding, a State or entity is 
determined to be in violation of section 471(a)(18) of the Act, ACF 
will assess a penalty without further investigation. Once the State is 
notified (in writing) of the violation, its title IV-E funds will be 
reduced for the fiscal quarter in which the court finding was made and 
for each succeeding quarter within that fiscal year or until the State 
completes a corrective action plan and comes into compliance, whichever 
is sooner. Once an entity is notified (in writing) of the violation, 
the entity must remit to the Secretary all title IV-E funds paid to it 
by the State during the quarter in which the court finding was made.
* * * * *
    (h) Determination of the amount of reduction of Federal funds. ACF 
will determine the reduction in title IV-E funds due to a section 
471(a)(18) violation in accordance with section 474(d)(1) and (2) of 
the Act.
* * * * *
    (2) Any entity (other than the State agency) which violates section 
471(a)(18) of the Act during a fiscal quarter must remit to the 
Secretary all title IV-E funds paid to it by the State in accordance 
with the procedures in paragraphs (g)(2) or (g)(4) of this section.
* * * * *


Sec. 1355.40  [Amended]

    10. Revise the parenthetical note following Sec. 1355.40 to read as 
follows:

    (This requirement has been approved by the Office of Management 
and Budget under OMB Control Number 0980-0267. In accordance with 
the Paperwork Reduction Act of 1995, an agency may not conduct or 
sponsor, and a person is not required to respond to, a collection of 
information unless it displays a currently valid OMB control 
number.)

PART 1356--REQUIREMENTS APPLICABLE TO TITLE IV-E

    11. The authority citation for part 1356 continues to read as 
follows:

    Authority: 42 U.S.C. 620 et seq., 42 U.S.C. 670 et seq., 42 
U.S.C. 1302.

    12. Amend Sec. 1356.20 by removing paragraph (c), redesignating 
paragraphs (d) through (f) as paragraphs (c) through (e) respectively, 
and revising the parenthetical note following the section to read as 
follows:


Sec. 1356.20  State plan document and submission requirements.

* * * * *
    (This requirement has been approved by the Office of Management and 
Budget under OMB Control Number 0980-0141. In accordance with the 
Paperwork Reduction Act of 1995, an agency may not conduct or sponsor, 
and a person is not required to respond to, a collection of information 
unless it displays a currently valid OMB control number.)

    13. Amend Sec. 1356.21 by:
    a. Revising paragraphs (b)(1)(i) and (b)(2)(i);
    b. Revising the parenthetical note following paragraph (g)(5);
    c. Revising paragraph (i)(1)(i)(A);
    d. Revising the second sentence of paragraph (j); and
    e. Revising paragraph (k)(1)(i).
    The revisions read as follows:


Sec. 1356.21  Foster care maintenance payments program implementation 
requirements.

* * * * *
    (b) * * *
    (1) * * *
    (i) When a child is removed from his/her home, the judicial 
determination as to whether reasonable efforts were made, or were not 
required to prevent the removal, in accordance with paragraph (b)(3) of 
this section, must be made no later than 60 days from the date the 
child is removed from the home pursuant to paragraph (k)(1)(ii) of this 
section.
    (2) * * *
    (ii) If such a judicial determination regarding reasonable efforts 
to finalize a permanency plan is not made in accordance with the 
schedule prescribed in paragraph (b)(2)(i) of this section, the child 
becomes ineligible under title IV-E at the end of the month in which 
the judicial determination was required to have been made, and remains 
ineligible until such a determination is made.
* * * * *
    (g) * * *
    (5) * * *


[[Page 58677]]


    (This requirement has been approved by the Office of Management 
and Budget under OMB Control Number 0980-0140. In accordance with 
the Paperwork Reduction Act of 1995, an agency may not conduct or 
sponsor, and a person is not required to respond to, a collection of 
information unless it displays a currently valid OMB control 
number.)
* * * * *
    (i) * * *
    (1) * * *
    (i) * * *
    (A) Must calculate the 15 out of the most recent 22 month period 
from the date the child is considered to have entered foster care as 
defined at section 475(5)(F) of the Act and Sec. 1355.20 of this part;
    (j) * * * Said costs must be limited to funds expended on items 
listed in the definition of foster care maintenance payments in 
Sec. 1355.20 of this part.
    (k) * * *
    (1) * * *
    (i) A voluntary placement agreement entered into by a parent or 
guardian which leads to a physical or constructive removal (i.e., a 
non-physical or paper removal of custody) of the child from the home; 
or
* * * * *

    14. Amend Sec. 1356.22 by revising paragraph (a)(3) to read as 
follows:


Sec. 1356.22  Implementation requirements for children voluntarily 
placed in foster care.

    (a) * * *
    (3) 45 CFR 1356.21(e), (f), (g), (h), and (i); and
* * * * *

    15. Amend Sec. 1356.50 by revising paragraph (c) to read as 
follows:


Sec. 1356.50  Withholding of funds for noncompliance with the approved 
title IV-E State plan.

* * * * *
    (c) For purposes of this section, the procedures in Sec. 1355.39 of 
this chapter apply.

    16. Remove the parenthetical note following Sec. 1356.60.

    17. Amend Sec. 1356.71 by revising paragraph (a)(3) and revising 
the third sentence of paragraph (j)(2) to read as follows:


Sec. 1356.71  Federal review of the eligibility of children in foster 
care and the eligibility of foster care providers in title IV-E 
programs.

    (a) * * *
    (3) The review process begins with a primary review of foster care 
cases for the title IV-E eligibility requirements.
    (i) States in substantial compliance. States determined to be in 
substantial compliance based on the primary review will be subject to 
another review in three years.
    (ii) States not in substantial compliance. States that are 
determined not to be in substantial compliance based on the primary 
review will develop and implement a program improvement plan designed 
to correct the areas of noncompliance. A secondary review will be 
conducted after the completion of the program improvement plan. A 
subsequent primary review will be held three years from the date of the 
secondary review.
* * * * *
    (j) * * *
    (2) * * * If both the case ineligibility and dollar error rates 
exceed 10 percent, the State is not in compliance and an additional 
disallowance will be determined based on extrapolation from the sample 
to the universe of claims paid for the duration of the AFCARS reporting 
period (i.e., all title IV-E funds expended for a case during the 
quarter(s) that case is ineligible, including administrative costs). * 
* *
* * * * *


Sec. 1356.80  [Amended]

    18. Remove Sec. 1356.80.

PART 1357--REQUIREMENTS APPLICABLE TO TITLE IV-B

    19. The authority citation for Part 1357 continues to read as 
follows:

    Authority: 42 U.S.C. 620 et seq., 42 U.S.C. 670 et seq., 42 
U.S.C. 130.

    20. Add a parenthetical note following Sec. 1357.15 to read as 
follows:


Sec. 1357.15  Comprehensive child and family services plan 
requirements.

* * * * *
    (This requirement has been approved by the Office of Management 
and Budget under OMB Control Number 0980-0047. In accordance with 
the Paperwork Reduction Act of 1995, an agency may not conduct or 
sponsor, and a person is not required to respond to, a collection of 
information unless it displays a currently valid OMB control 
number.)


    21. Add a parenthetical note following Sec. 1357.16 to read as 
follows:


Sec. 1357.16  Annual progress and services reports.

* * * * *
    (This requirement has been approved by the Office of Management 
and Budget under OMB Control Number 0980-0047. In accordance with 
the Paperwork Reduction Act of 1995, an agency may not conduct or 
sponsor, and a person is not required to respond to, a collection of 
information unless it displays a currently valid OMB control 
number.)

[FR Doc. 01-29174 Filed 11-21-01; 8:45 am]
BILLING CODE 4184-01-P