[Federal Register Volume 60, Number 40 (Wednesday, March 1, 1995)]
[Notices]
[Pages 11076-11077]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-5039]



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DEPARTMENT OF EDUCATION


Office of Administrative Law Judges

AGENCY: Department of Education.

ACTION: Notice of intent to compromise a claim.

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SUMMARY: The U.S. Department of Education (the Department) intends to 
compromise a claim against the Washington State Board for Vocational 
Education (Washington) now pending before the Office of Administrative 
Law Judges (OALJ). Docket No. 93-42-R. (20 U.S.C. 1234a(j)).

DATES: Interested persons may comment on the proposed action by 
submitting written data, views, or arguments on or before April 17, 
1995.

ADDRESSES: Comments should be addressed to Kathleen Ryan, Office of the 
General Counsel, U.S. Department of Education, 600 Independence Avenue 
SW. (Room 5335, FB 10B), Washington, D.C. 20202.

FOR FURTHER INFORMATION CONTACT: Kathleen Ryan, Esq., Telephone: (202) 
401-8292. Individuals who use a telecommunications device for the deaf 
(TDD) may call the Federal Information Relay Service (FIRS) at 1-800-
877-8339 between 8 a.m. and 8 p.m., Eastern time, Monday through 
Friday.

SUPPLEMENTARY INFORMATION: The claim in question arose from an audit of 
the financial affairs and operations of Washington for the fiscal year 
ending June 30, 1990. The audit was performed by the Washington State 
Auditor, to fulfill the requirements of Office of Management and Budget 
Circular A-128. The audit included the evaluation of the internal 
control systems, including applicable internal administrative controls, 
used in administering Federal financial assistance programs.
    Among the systems examined were Washington's procedures for 
reviewing and approving applications from community colleges for funds 
awarded under section 201 of the Carl D. Perkins Vocational Education 
Act (Perkins Act), 20 U.S.C. 2331 (1988), for handicapped and 
disadvantaged vocational education students. Sections 201(c)(1) and (2) 
of the Perkins Act and the implementing regulations (34 CFR 401.52(a) 
and [[Page 11077]] 401.53(a)(1)(1990)) provide that funds reserved for 
the handicapped and disadvantaged may only be used for the Federal 
share of the costs of providing ``supplemental or additional staff, 
equipment, materials, and services not provided to other individuals in 
vocational education that are essential for [handicapped and 
disadvantaged] individuals to participate in vocational education.'' 
Under section 201(h)(1) of the Perkins Act (20 U.S.C. 2331(h)(1)) and 
the implementing regulations (34 CFR 401.58(a)(1)(1990)), these excess 
costs may include basic skills instruction for handicapped and 
disadvantaged individuals who are enrolled in vocational education 
programs.
    During the course of the audit, the auditors found that Washington 
had approved applications from community colleges for unallowable 
activities under section 201, and that the colleges had improperly 
charged the costs of these activities to the handicapped and 
disadvantaged setasides under the Vocational Education Opportunities 
Program implemented at 34 CFR 401.51-401.58 (1990). The auditors found 
that the colleges used funds from the setasides to support the costs of 
services, activities and equipment for handicapped and disadvantaged 
students not enrolled in vocational education programs, including the 
provision of basic skills instruction to students not enrolled in 
vocational education programs. In addition, the auditors found that the 
colleges used setaside funds to support the costs of activities for 
students who were not handicapped or disadvantaged.
    On March 31, 1993, the U.S. Department of Education's Assistant 
Secretary for Vocational and Adult Education (Assistant Secretary) 
issued a program determination letter (PDL) sustaining the auditors' 
findings and requiring Washington to repay $135,248 in disallowed costs 
to the Department.
    The State filed a timely request for review of the Assistant 
Secretary's determination with the OALJ. Thereafter, the Administrative 
Law Judge assigned to the appeal granted the parties' joint motion for 
a stay of this proceeding for purposes of mediation.
    The Department proposes to compromise the $135,248 claim for 
$50,000. In mediation sessions before the Federal Mediation and 
Conciliation Service, Washington provided additional information and 
documentation concerning the numbers of handicapped and disadvantaged 
vocational education students being served and the types of services, 
activities and equipment involved. Washington also submitted 
documentary evidence concerning the necessity of the services, 
activities and equipment to the participation of the handicapped and 
disadvantaged students in vocational education, and the non-
availability of these services and activities for non-handicapped and 
non-disadvantaged vocational students.
    Given the amount that would be repaid by Washington under the 
settlement agreement, the additional documentation submitted during 
mediation, and the litigation risks and costs of proceeding through the 
appeal process, the Department has determined that it would not be 
practical or in the public interest to continue this proceeding. 
Rather, under the authority provided in 20 U.S.C. 1234a(j)(1), the 
Department has determined that a compromise of this claim for $50,000 
would be appropriate.
    The public is invited to comment on the Department's intent to 
compromise this claim. Additional information may be obtained by 
writing to Kathleen Ryan at the address given at the beginning of this 
notice.

    Program Authority: 20 U.S.C. 1234a(j).

    Dated: February 22, 1995.
Donald R. Wurtz,
Chief Financial Officer.
[FR Doc. 95-5039 Filed 2-28-95; 8:45 am]
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