incentive adjustments for quality control in federal financial participation in aid to families with dependent children programs

incentive adjustments for quality control in federal financial participation in aid to families with dependent children programs Sec. 402. (a) Section 403 of the Social Security Act is amended by adding after subsection (i) (as added by section 401 of this Act) the following new subsection: “(j) If the dollar error rate of aid furnished by a State under its State plan approved under this part with respect to any six-month period, as based on samples and evaluations thereof, is— “(1) at least 4 per centum, the amount of the Federal financial participation in the expenditures made by the State in carrying out such plan during such period shall be determined without regard to the provisions of this subsection; or “(2) less than 4 per centum, the amount of the Federal financial participation in the expenditures made by the State in carrying out such plan during such period shall be the amount determined without regard to this subsection, plus, of the amount by which such expenditures are less than they would have been if the erroneous excess payments of aid had been at a rate of 4 per centum— “(A) 10 per centum of the Federal share of such amount, in case such rate is not less than 3.5 per centum, “(B) 20 per centum of the Federal share of such amount, in case such rate is at least 3.0 per centum but less than 3.5 per centum, “(C) 30 per centum of the Federal share of such amount, in case such rate is at least 2.5 per centum but less than 3.0 per centum, “(D) 40 per centum of the Federal share of such amount, in case such rate is at least 2.0 per centum but less than 2.5 per centum, 91 STAT. 1561 “(E) 50 per centum of the Federal share of such amount, in case such rate is less than 2.0 per centum. For purposes of this subsection (i) the term ‘dollar error rate of aid’ means the total of the dollar error rates of aid for (I) payments to ineligible families receiving assistance; (II) overpayments to eligible families receiving assistance; (III) underpayments to eligible families receiving assistance; and (IV) nonpayments to eligible families not receiving assistance due to erroneous terminations or denials, and (ii) the term ‘erroneous excess payments,’ means the total of (I) erroneous payments to ineligible families receiving assistance, and (II) overpayments to eligible families receiving assistance.”. (b) Payments may be made under the amendment made by subsection (a) only in the case of periods commencing on or after January 1, 1978.