103 STAT. 2454 PUBLIC LAW 101-239—DEC. 19, 1989 State and local governments. 42 USC 608. R^ulations. SEC. 8004. NEW AFDC QUALITY CONTROL SYSTEM. " (a) IN GENERAL.— Part A of title IV (42 U.S.C. 601 et seq.) is amended by inserting after section 407 the following: "SEC. 408. AFDC QUALITY CONTROL SYSTEM. "(a) IN GENERAL.—In order to improve the accuracy of payments of aid to families with dependent children, the Secretary shall establish and operate a quality control system under which the Secretary shall determine, with respect to each State, the amount (if any) of the disallowance required to be repaid to the Secretary due to erroneous payments made by the State in canning out the State plan approved under this part. "(b) REVIEW OF CASES.— ' , "(1) STATE REVIEW. — ^^ "(A) IN GENERAL.— Each State with a plan approved
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under this part shall for each fiscal year, in accordance with the time schedule and methodology prescribed in regu- lations issued under paragraphs (1) and (2) of subsection (h)- j. "(i) review a sample of cases in the State with respect ""'^ to which a payment has been made under such plan during the fiscal year; and "(ii) determine the level of erroneous pa3nnents for the State for the fiscal year. ^.., " (B) EFFECTS OF FAILURE TO COMPLETE REVIEW IN A TIMELY MANNER.— "(i) SECRETARY CONDUCTS REVIEW. — If a State fails to conduct and complete, on a timely basis, a review ' '"'"' required by subparagraph (A), or otherwise fails to ,^ „^ cooperate with the Secretary in implementing this H.fj.'^.,; -i subsection, the Secretary, directly or through contrac- tual or such other arrangements as the Secretary may ^, p find appropriate, shall conduct the review and establish the error rate for the State for the fiscal year on the basis of the best data reasonably available to the Sec- retary, in accordance with the statistical methods that would apply if the review were conducted by the State, "(ii) STATE INCURS COSTS OF REVIEW.— The amount that would otherwise be payable under this part to a State for which the Secretary conducts a review under •" clause (i) shall be reduced by the costs incurred by the Secretary in conducting the review. "(2) REVIEW BY THE SECRETARY,—The Secretary shall review a subsample of the cases reviewed by the State, or by the Sec- ' retary with respect to the State, under paragraph (1). "(3) NOTIFICATION OF DIFFERENCE CASES. — Upon completion of the review under paragraph (2), the Secretary shall notify the State of any case in the subsample which the Secretary finds involves erroneous payments, and which the State's review determined to be correct (in this section referred to as a 'dif- ference case'). " (4) ESTABLISHMENT OF QUALFTY CONTROL REVIEW PANEL.— The Secretary shall by regulation establish a Quality Control Review Panel to review difference cases, "(5) RESOLUTION OF DIFFERENCE CASES,—
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