[Federal Register Volume 60, Number 109 (Wednesday, June 7, 1995)]
[Notices]
[Pages 30076-30078]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-13850]



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DEPARTMENT OF EDUCATION


Intent To Repay to the Commonwealth of Pennsylvania Department of 
Education Funds Recovered as a Result of a Final Audit Determination

AGENCY: Department of Education.

ACTION: Notice of intent to award grantback funds.

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SUMMARY: Under section 459 of the General Education Provisions Act 
(GEPA), the U.S. Secretary of Education (Secretary) intends to repay to 
the Commonwealth of Pennsylvania Department of Education, the State 
educational agency (SEA), an amount equal to 75 percent of the $210,000 
recovered by the U.S. Department of Education (Department) as a result 
of a final audit determination. This notice describes the SEA's plan, 
submitted on behalf of the Philadelphia School District, the local 
educational agency (LEA), 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 July 7, 1995.

ADDRESSES: Comments concerning the grantback should be addressed to 
Mary Jean LeTendre, Director, Compensatory Education Programs, Office 
of Elementary and Secondary Education, U.S. Department of Education, 
600 Independence Avenue SW (Portals Building, Room 4400), Washington, 
D.C. 20202-6132.

FOR FURTHER INFORMATION CONTACT: S. Colene Nelson, U.S. Department of 
Education, 600 Independence Avenue SW (Portals Building, Room 4400), 
Washington, D.C. 20202-6132. Telephone: (202) 260-0979. 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:

A. Background

    The Department has recovered $210,000 from the SEA in satisfaction 
of claims arising from an audit of the LEA covering fiscal year (FY) 
1987. The claims involved the SEA's administration of Chapter 1 of the 
Education Consolidation and Improvement Act of 1981 (Chapter 1, ECIA), 
a program that provided financial assistance to State and local 
agencies to address the special educational needs of educationally 
deprived children in areas with high concentrations of children from 
low-income families.
    Specifically, the auditors found that for the period July 1, 1986 
through March 18, 1987, the LEA's Office of Planning, Research and 
Evaluation (OPRE) prorated staff did not maintain time and effort 
reports properly to support $604,611 of allocable charges under Chapter 
1. Alternative documentation in the form of sign-in sheets and 
evaluation reports was reviewed by the auditors and also found to be 
inadequate for allocating OPRE salaries to Chapter 1 because it did not 
demonstrate the actual time that prorated staff spent on Chapter 1 
activities. The auditors therefore questioned $604,611 of salaries, 
fringe benefits, and indirect costs.
    On March 19, 1987, the LEA implemented a time and effort reporting 
system to be used by the OPRE staff. However, the auditors found that 
for the period March 19, 1987 through June 30, 1987, the time and 
effort reports maintained by OPRE-prorated staff did not support the 
full amount of Chapter 1 claims submitted by the LEA. The auditors 
therefore questioned an additional $20,066 improperly charged to the 
Chapter 1 program for salaries, fringe benefits, and indirect costs for 
the remainder period of time. The auditors recommended a total refund 
to the Department in the amount of $624,677 for the first finding.
    In a second finding, the auditors found that the LEA failed to 
retain documentation supporting student eligibility for the Chapter 1 
Reading and English to Speakers of Other Languages (ESOL) projects. 
Therefore, the teachers' salaries and fringe benefits charged to the 
Chapter 1 program for the Reading and ESOL projects during the period 
July 1, 1986 through June 30, 1987 were unsupported. As a result, the 
auditors identified $137,661 of Chapter 1 salaries, fringe benefits, 
and indirect costs charged to the Chapter 1 program, for the Reading 
and ESOL teachers, for [[Page 30077]] which student eligibility 
documentation could not be located.
    Based on these two findings, the Assistant Secretary for Elementary 
and Secondary Education (Assistant Secretary) issued a final 
determination on March 29, 1991, that concluded that salaries, fringe 
benefits, and indirect costs charged to the Chapter 1 program were 
unsupported or incorrectly calculated. The determination required a 
refund totaling $762,338.
    The SEA appealed the final determination of the Assistant Secretary 
through the Office of Administrative Law Judges. Review of additional 
documentation submitted during this period of appeal and negotiations 
between the school district and the Department resulted in an order of 
dismissal issued on April 15, 1992, by the Department settling the 
audit at $210,000 in questioned costs. Subsequently, on June 4, 1992, 
the LEA submitted a check for $210,000.
B. Authority for Awarding a Grantback

    Section 459(a) of GEPA, 20 U.S.C. 1234h(a), provides that whenever 
the Secretary has recovered program funds following a final audit 
determination, 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--
    (1) Practices or 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;
    (2) 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
    (3) 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 459(a)(2) of GEPA, the SEA has applied for a 
grantback of $157,500--75 percent of the principal amount recovered by 
the Department--and has submitted a plan on behalf of the LEA for use 
of the grantback funds to meet the special educational needs of 
educationally deprived children in programs administered under Chapter 
1, ESEA (20 U.S.C. 2701 et seq. (1988)).
    According to the plan, the LEA will use the grantback funds under 
Chapter 1 to provide six weeks of summer kindergarten to be held at 
eight schoolwide project sites, two classes per site for a total of 16 
classrooms. Participating teachers will attend one planning meeting (2 
hours) and a full day of staff development (5 hours) in June in 
preparation for the program that will begin for students on July 5 and 
end on August 15, 1995. The participating schools will be selected 
based on the following two factors: (1) A high concentration of 
students about to enter first grade who have not had a kindergarten 
experience, and (2) a high concentration of poverty. The Office of 
Accountability and Assessment will identify the targeted schools. If 
space is available, children who entered kindergarten after January 
1995 will also be included. Teachers and classroom assistants will 
telephone parents to keep attendance high.
    Each class will be staffed by a teacher and a classroom assistant. 
The teacher-student ratio will be one to fifteen. The standardized 
kindergarten curriculum for the LEA will be used as the basis for 
instruction. Schools will be invited to pilot some special materials to 
increase hands-on interactive, developmentally appropriate instruction. 
These materials will be selected by the principal and teachers at the 
school to coordinate with the instructional model in use at the school. 
For the sixth week, the first grade teachers to whom the students have 
been assigned will attend and work with the students. The Early Primary 
Progress Report (EPPR), a developmentally appropriate kindergarten 
checklist, will be administered to each participant at the completion 
of the summer program. Children will be rated as competent, making 
progress, or making improvement. The results will be summarized to 
determine attainment of objectives for each class and the program as a 
whole.
    Also, the LEA staff, in consultation with nonpublic school 
authorities and parents of Chapter 1 students, decided to allocate 
grantback funds to support summer professional development for 20 
teachers of Chapter 1 students, in order to provide these teachers with 
an opportunity to focus on the needs of the Chapter 1 children they 
teach and to align the regular education program with Chapter 1 support 
activities in their schools. Twenty nonpublic schools with the highest 
concentrations of Chapter 1 program students will be selected for 
participation. Attendance will be recorded at each staff development 
session and participating teachers will complete a workshop evaluation 
survey at the end of the two-week session.

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 459 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 may take appropriate administrative action. In 
finding that the conditions of section 459 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 459(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 payment will be made.
    In accordance with section 459(d) of GEPA, notice is hereby given 
that the Secretary intends to make funds available to the SEA under a 
grantback arrangement. The grantback award would be in the amount of 
$157,500.
F. Terms and Conditions Under Which Payments Under a Grantback 
Arrangement Would Be Made

    The SEA and LEA agree to comply with the following terms and 
conditions under which payment under a grantback arrangement would be 
made:
    (1) The funds awarded under the grantback must be spent in 
accordance with--
    (a) All applicable statutory and regulatory requirements;
    (b) The plan that the SEA submitted and any amendments to that plan 
that are approved in advance by the Secretary; and
    (c) The budget that was submitted with the plan and any amendments 
to the budget that are approved in advance by the Secretary.
    (2) All funds received under the grantback arrangement must be 
obligated by September 30, 1995, in accordance with section 459(c) of 
GEPA and the SEA's plan. [[Page 30078]] 
    (3) The SEA, on behalf of the LEA, will, not later than December 
31, 1995, submit a report to the Secretary that--
    (a) Indicates that the funds awarded under the grantback have been 
spent in accordance with the proposed plan and approved budget; and
    (b) Describes the results and effectiveness of the project for 
which the funds were spent.
    (4) Separate accounting records must be maintained documenting the 
expenditures of funds awarded under the grantback arrangement.

    Dated: June 1, 1995.
Thomas W. Payzant,
Assistant Secretary for Elementary and Secondary Education.

(Catalog of Federal Domestic Assistance Number 84.010, Educationally 
Deprived Children--Local Educational Agencies)
[FR Doc. 95-13850 Filed 6-6-95; 8:45 am]
BILLING CODE 4000-01-P