Review of Title IV-E Adoption Assistance Maintenance Payments in Tennessee for the Period October 1, 2005, Through September 30, 2006

The Tennessee Department of Children's Services (State agency) did not always comply with Federal eligibility requirements when claiming Title IV-E adoption assistance for Federal reimbursement for fiscal years (FY) 2006 through 2008. We identified 83 ineligible beneficiaries for whom the State agency received $2.1 million (Federal share) in Federal reimbursement for FYs 2006 through 2008. In addition, the State agency claimed $24,000 (Federal share) for one child whom the State agency initially concluded to be eligible for adoption assistance; however, the initial eligibility determination was made in error.

Furthermore, we are setting aside adoption assistance claims for 854 of the 1,500 children in our sample, totaling $7.5 million (Federal share), for resolution by the Administration for Children and Families (ACF) and the State agency. The State agency did not provide documentation to support adoption assistance eligibility for these 854 children in a reasonable amount of time for our review because the State agency did not maintain eligibility files as required by Federal regulations.

We recommended that the State agency (1) refund $2.1 million to the Federal Government for the children identified as ineligible for FYs 2006 through 2008, (2) identify additional payments received in FYs 2009 and 2010 for the children identified as ineligible and make a financial adjustment for these additional payments on its next Federal quarterly expenditure report, (3) work with ACF to resolve $7.5 million (Federal share) in costs that we set aside because the State agency did not provide documentation to support adoption assistance eligibility for 854 claims in a reasonable amount of time for our review, (4) continue recovering and restoring missing documentation to the adoption assistance eligibility files, (5) review Children's Plan Financial System eligibility for all children receiving adoption assistance who were not included in our review, (6) continue to strengthen internal controls to insure that Federal reimbursement for adoption assistance is not claimed on behalf of ineligible children, and (7) implement policies and procedures to ensure adoption assistance records are retained in accordance with Federal requirements. The State agency generally concurred with our recommendations and described corrective actions that it had implemented or planned to implement.