[Federal Register Volume 59, Number 146 (Monday, August 1, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-18616]


[[Page Unknown]]

[Federal Register: August 1, 1994]


_______________________________________________________________________

Part VI





Department of Education





_______________________________________________________________________



Missouri Department of Elementary and Secondary Education; Notice of 
Intent To Award Grantback Funds
-----------------------------------------------------------------------

DEPARTMENT OF EDUCATION

 

Intent to Repay to the Missouri Department of Elementary and 
Secondary Education Funds Recovered as a Result of a Final Audit 
Determination

AGENCY: Department of Education.

ACTION: Notice of intent to award grantback funds.

-----------------------------------------------------------------------

SUMMARY: Notice is given that under section 456 of the General 
Education Provisions Act (GEPA), 20 U.S.C. 1234e (1982), the U.S. 
Secretary of Education (Secretary) intends to repay to the Missouri 
Department of Elementary and Secondary Education, the State educational 
agency (SEA or Missouri), an amount nearly equal to 75 percent of the 
principal amount of funds recovered by the U.S. Department of Education 
(Department) as a result of a final audit determination. This notice 
describes the SEA's plan for the use of the repaid funds and the terms 
and conditions under which the Secretary intends to make those funds 
available. The notice invites comments on the proposed grantback.

DATES: All comments must be received on or before August 31, 1994.

ADDRESSES: Comments concerning the grantback should be addressed to 
William D. Tyrrell, Sr., U.S. Department of Education, 400 Maryland 
Avenue, S.W., room 3609, Switzer Building, Washington, D.C. 20202-6132.

FOR FURTHER INFORMATION CONTACT: William D. Tyrrell, Sr., U.S. 
Department of Education, 400 Maryland Avenue, S.W., room 3609, Switzer 
Building, Washington, D.C. 20202-6132, telephone: (202) 205-8825. 
Individuals who use a telecommunications device for the deaf (TDD) may 
call the Federal Information Relay Service (FIRS) at 1-877-8339 between 
8 a.m. and 8 p.m., Eastern time, Monday through Friday.

SUPPLEMENTARY INFORMATION:

A. Background

    This notice is based on the Department's recovery of funds 
following an audit report prepared by the United States Department of 
Education's Office of Inspector General, Office of Audit, Region VII, 
issued on May 29, 1984, of the Special School District of St. Louis 
County's (SSD) administration of its Part B of the Education of the 
Handicapped Act1 (Part B) grant award for the funding period of 
July 1, 1977 through June 30, 1983. (Audit Control Number: 07-30032). 
Among the objectives of that audit was to determine whether SSD 
complied with Part B's non-supplanting requirement. Under that 
requirement, a local educational agency (LEA) receiving Part B funds 
must, in any particular fiscal year, spend as much State and local 
funds on special education and related services, on either an aggregate 
or per capita basis, as it did in the prior fiscal year. This part of 
the non-supplanting requirement is referred to as the ``aggregate 
expenditure'' test.
---------------------------------------------------------------------------

    \1\In 1990, the name of this Act was changed by Congress to Part 
B of the Individuals with Disabilities Education Act. See Pub. L. 
101-476.

(See 20 U.S.C. 1414(a)(2)(B)(ii) and (f) (1982) and 34 CFR Sec. 300.230 
(1982)). 34 CFR 300.230 also prohibited, during the period at issue, 
the use of Part B funds to pay for specific costs that had been 
previously paid for with State and local funds. This part of the non-
supplanting requirement is referred to as the ``particular cost'' test. 
Id.2
---------------------------------------------------------------------------

    \2\ The particular cost requirement was removed from the Part B 
regulations in 1992. See 57 F.R. 37652 (August 19, 1992).
---------------------------------------------------------------------------

    On April 17, 1986, the Assistant Secretary for Special Education 
and Rehabilitative Services (Assistant Secretary) issued a final letter 
of determination (FLD) to the SEA that adopted the finding of the audit 
report and disallowed $1,374,880 of fiscal year 1980, 1981, and 1983 
Part B funds expended in violation of the non-supplanting 
requirement.3 Most of these funds, $929,746, were disallowed 
because of SSD's failure to comply with the aggregate expenditure test. 
The FLD, however, also disallowed $445,116 because of SSD's failure to 
comply with the particular cost test.
---------------------------------------------------------------------------

    \3\ Under Part B, the SEA is responsible for assuring that the 
funds it receives and awards to its school districts will be spent 
in accordance with, among other things, the Act's non-supplanting 
requirement. (See 20 U.S.C. 1413(a)(1) (1982). See also 20 U.S.C. 
1412(6) (1982)). Thus, although SSD violated the non-supplanting 
requirement, the Department sought recovery of the misexpended funds 
from the SEA.
    The FLD also disallowed $107,969 of fiscal year 1983 funds 
because of erroneous reporting and improper charges to the Part B 
program. This claim was subsequently withdrawn on the basis of 
evidence presented by SSD to the Assistant Secretary after the FLD 
was issued.
---------------------------------------------------------------------------

    On May 16, 1986, Missouri filed an application for review of the 
FLD with the Education Appeal Board (EAB).4 The SEA's application 
for review and the petition to intervene in the proceedings filed by 
SSD were accepted by the EAB. During the course of proceedings before 
the EAB, the Assistant Secretary, on the basis of documentation 
presented by SSD, reduced the claim made in the FLD for funds spent in 
violation of the non-supplanting requirement to $911,153. The EAB's 
Initial Decision, which was issued on August 9, 1989, held that 
Missouri must refund $463,729 to the Department.
---------------------------------------------------------------------------

    \4\ The procedures for appealing FLDs issued by officials of the 
Department of Education were changed by Pub. L. 100-297 (April 28, 
1988). 20 U.S.C. Secs. 1234 and 1234a (1988). The Department's 
Office of Administrative Law Judges now performs the duties related 
to the adjudication of appeals of FLDs that were previously assigned 
to the EAB.
---------------------------------------------------------------------------

    The SEA, SSD, and the Secretary of Education entered into a 
settlement agreement that resolved the issues in the appeal on May 22, 
1991. On June 17, 1991, pursuant to the terms of that agreement, SSD 
returned $223,500 to the Department. The EAB, on the basis of a Joint 
Motion filed by all the parties, dismissed the appeal with prejudice. 
All terms of the settlement agreement have been satisfied.

B. Authority for Awarding a Grantback

    Section 456(a) of GEPA, 20 U.S.C. 1234e(a)(1982), provides that 
whenever the Secretary has recovered funds following a final audit 
determination with respect to an applicable program, the Secretary may 
consider those funds to be additional funds available for the program 
and may arrange to repay to the SEA or LEA affected by the 
determination an amount not to exceed 75 percent of the recovered 
funds. The Secretary may enter into this ``grantback'' arrangement if 
the Secretary determines that the--
    (a) Practices and procedures of the SEA or LEA that resulted in the 
audit determination have been corrected, and the SEA or LEA is, in all 
other respects, in compliance with the requirements of the applicable 
program;
    (b) The SEA has submitted to the Secretary a plan for the use of 
the funds to be awarded under the grantback arrangement that meets the 
requirements of the program and, to the extent possible, benefits the 
population that was affected by the failure to comply or by the 
misexpenditures that resulted in the audit exception; and
    (c) Use of funds to be awarded under the grantback arrangement in 
accordance with the SEA's plan would serve to achieve the purposes of 
the program under which the funds were originally granted.

C. Plan for Use of Funds Awarded Under a Grantback Arrangement

    Pursuant to section 456(a)(2) of GEPA, the SEA has applied for a 
grantback totaling $167,585, which is slightly less than 75 percent of 
the principal amount of the recovered funds, and has submitted a plan 
for use of the grantback funds to meet the special education needs of 
children with disabilities. Under section 456(c) of GEPA, 20 U.S.C. 
1234e(c)(1982), these funds are available for expenditure until 
September 30, 1994. The SSD's plan, which has been submitted by the 
SEA, is to train its personnel in a transdisciplinary team approach to 
serving children with disabilities. The training has five major 
components: (1) initial training on the transdisciplinary team approach 
of providing services to students with disabilities; (2) concept 
support training, including Project RIDE (Responding to Individual 
Differences in Education), the nationally recognized program for at-
risk students aimed at helping students who have difficulty functioning 
successfully in the regular classroom; (3) monthly site-based meetings; 
(4) consultation with recognized experts and trainers; and (5) 
evaluation to continue modification of the process as appropriate and 
planning to continue implementation district-wide. The training will be 
provided to 18 teams on the concept of transdisciplinary service and 
the process of working as a team. Each team will be composed of one 
general education teacher, one general education counselor, two special 
education teachers, one speech/language pathologist, and one special 
education area coordinator. Approximately ten occupational/physical 
therapists, serving multiple teams, will also be included. These teams 
will benefit from the initial two-day training workshop which focuses 
on the transdisciplinary approach. In addition, there will be 
supplemental training: follow-up sessions, one mid-way in the project 
and one near the end of the project period. The teams will also be 
participating in the monthly meeting guided by the local Project 
Leader.

D. The Secretary's Determinations

    The Secretary has carefully reviewed the plan submitted by the SEA. 
Based upon that review, the Secretary has determined that the 
conditions under section 456 of GEPA have been met.
    These determinations are based upon the best information available 
to the Secretary at the present time. If this information is not 
accurate or complete, the Secretary is not precluded from taking 
appropriate administrative action. In finding that the conditions of 
section 456 of GEPA have been met, the Secretary makes no determination 
concerning any pending audit recommendations or final audit 
determinations.

E. Notice of the Secretary's Intent To Enter Into a Grantback 
Arrangement

    Section 456(d) of GEPA requires that, at least 30 days before 
entering into an arrangement to award funds under a grantback, the 
Secretary must publish in the Federal Register a notice of intent to do 
so, and the terms and conditions under which the payment will be made.
    In accordance with section 456(d) of GEPA, notice is hereby given 
that the Secretary intends to make funds available to Missouri under a 
grantback arrangement. The grantback award would be in the amount of 
$167,585, which is approximately 75 percent--the maximum percentage 
authorized by statute--of the principal amount recovered as a result of 
the audit.

F. Terms and Conditions Under Which Payments Under a Grantback 
Arrangement Would Be Made

    The SEA agrees to comply with the following terms and conditions 
under which payments under a grantback arrangement would be made:
    (a) The funds awarded under the grantback must be spent in 
accordance with--
    (1) All applicable statutory and regulatory requirements;
    (2) The plan that the SEA submitted and any amendments to the plan 
that are approved in advance by the Secretary; and
    (3) The budget that was submitted with the plan and any amendments 
to the budget that are approved in advance by the Secretary.
    (b) All funds received under the grantback arrangement must be 
obligated by September 30, 1994, in accordance with section 456(c) of 
GEPA;
    (c) The SEA will, not later than January 1, 1995, submit a report 
to the Secretary that--
    (1) Indicates that the funds awarded under the grantback have been 
spent in accordance with the proposed plan and approved; and
    (2) Describes the results and effectiveness of the project for 
which the funds were spent.
    (d) Separate accounting records must be maintained documenting the 
expenditures of funds awarded under the grantback arrangement.
    (e) Before funds will be repaid pursuant to this notice, the SEA 
must repay to the Department any debts that become overdue, or enter 
into a repayment agreement for those debts.

    Dated: July 26, 1994.
Judith E. Heumann,
Assistant Secretary for Special Education and Rehabilitative Services.

(Catalog of Federal Domestic Assistance Number 84.027, Handicapped 
State Grants)
[FR Doc. 94-18616 Filed 7-29-94; 8:45 am]
BILLING CODE 4000-01-P