[Federal Register Volume 60, Number 170 (Friday, September 1, 1995)]
[Notices]
[Pages 45706-45707]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-21919]



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DEPARTMENT OF EDUCATION


Office of Vocational and Adult Education; Intent to Repay to the 
Iowa State Board for Vocational 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), 20 U.S.C. 1234h (1988), the Secretary of Education (Secretary) 
intends to repay to the Iowa Department of Education (Iowa), under a 
grantback arrangement, an amount equal to 75 percent of the principal 
amount of Vocational Education Basic Grant funds recovered by the U.S. 
Department of Education (Department) as a result of the final audit 
determination (ACN: 07-82144) in this matter. The Department's recovery 
of funds followed a settlement reached between the parties under which 
Iowa refunded $178,500 in principal, to the Department in full 
resolution of the Department's final audit determination for fiscal 
year (FY) 1986. This notice describes Iowa's plan for the use of the 
repaid Vocational Education funds and the terms and conditions under 
which the Secretary intends to make those funds available. This notice 
invites comments on the proposed grantback.

DATES: All comments must be received on or before October 2, 1995.

ADDRESSES: All written comments should be addressed to Dr. Marcel R. 
DuVall, Chief, Finance Branch, Division of Vocational-Technical 
Education, Office of Vocational and Adult Education, U.S. Department of 
Education, 600 Independence Avenue SW., (Mary E. Switzer Building, room 
4320, MS-7324), Washington, DC 20202.

FOR FURTHER INFORMATION CONTACT: Dr. Marcel R. DuVall, Telephone (202) 
205-9502. Individuals who use a telecommunications device for the deaf 
(TDD) may call the Federal Information Relay Service (FIRS) at 1-800-
877-8239 between 8 a.m. and 8 p.m., Eastern time, Monday through 
Friday.

SUPPLEMENTARY INFORMATION:

A. Background

    Under a settlement agreement between the Department and Iowa, the 
Department recovered $178,500 from Iowa in full resolution of all 
claims arising from an audit of the Iowa State Department of Education, 
covering FY 1986. Of this amount, $132,959 is considered to be a 
recovery of Vocational Education Basic Grant funds.
    The Department's original claim of $240,803.68 was contained in a 
final letter of determination issued by the Assistant Secretary for 
Vocational and Adult Education, et al., on July 23, 1990. The parties 
determined that $19,129.24 of the refund demand was barred by the 
statute of limitations. This claim arose from findings related to 
Iowa's administration of its Handicapped State Grant program, Civil 
Rights Technical Assistance and Training program, Adult Education 
program and Vocational Education program. The Vocational Education 
program was administered under the provisions of the Carl D. Perkins 
Vocational and Applied Technology Education Act of 1990 (Perkins II).
    In the July 23, 1990, letter, the Assistant Secretary determined 
that Iowa violated the regulations governing payroll expenditures and 
maintenance of time distribution records. For the applicable programs, 
Iowa improperly allocated payroll expenditures based on predetermined 
budgets and failed to maintain appropriate time distribution records 
for employees who worked on more than one cost objective, thus 
violating provisions of the cost principles implemented at 34 CFR Part 
74, Subpart Q, Appendix C, Part II (B)(10)(b).
    Pursuant to a November 12, 1991, agreement resolving fully all 
claims in this matter, Iowa repaid the Department $178,500. The full 
payment was made 

[[Page 45707]]
on November 22, 1993. The repayment included $132,959 of Vocational 
Education funds.

B. Authority for Awarding a Grantback

    Section 459(a) of GEPA, 20 U.S.C. section 1234h, the authority 
applicable to this grantback request, provides that whenever the 
Secretary has recovered funds paid under an applicable program because 
the recipient made an expenditure of funds that was not allowable, or 
otherwise failed to discharge its responsibility to account properly 
for funds, the Secretary may consider those funds to be additional 
funds available for that program and may arrange to repay to the 
recipient affected by that action 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) The practices or procedures of the recipient that resulted in 
the violation of law have been corrected, and that the recipient is in 
all other respects in compliance with the requirements of that program;
    (2) The recipient has submitted to the Secretary a plan for the use 
of those funds pursuant to the requirements of that program and, to the 
extent possible, for the benefit of the population that was affected by 
the failure to comply or by the misuse of funds that resulted in the 
recovery; and
    (3) The use of the funds in accordance with that plan would serve 
to achieve the purposes of the program under which the funds were 
originally paid.

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

    Pursuant to section 459(c) of GEPA, Iowa has applied for a 
grantback of $99,719, or 75 percent of the Vocational Education portion 
of the recovered funds. Iowa has submitted a plan for use of the 
proposed grantback funds, consistent with Perkins II, which is 
currently in effect. Iowa plans to conduct a third-party evaluation of 
the applied academic coursework incorporated into Iowa's tech-prep 
education programs and to purchase equipment needed to connect the Iowa 
Department of Education to the Iowa Communication Network (ICN).
    Specifically, Iowa plans to utilize the requested grantback funds 
to--
    (1) Contract with an independent firm to design and conduct an 
evaluation of the applied academics course being administered as a 
portion of Iowa's tech-prep education programs. The State developed and 
implemented a framework model for tech-prep education programs 
approximately three years ago. Many secondary and postsecondary 
institutions in the State have incorporated curriculum materials, based 
upon this framework model, into their own tech-prep education programs. 
These institutions are interested in obtaining data regarding the model 
program's effectiveness. The contractor will produce a final report 
summarizing the findings of this evaluation.
    (2) Purchase equipment needed to link the State Department of 
Education to a statewide fiber optic network. This network connects all 
of Iowa's community colleges and provides for at least one education 
end point in all of the State's 99 counties. Gaining access to the ICN 
will enable the State to provide direct technical assistance to Perkins 
fund recipients, helping them to resolve administrative issues and to 
facilitate supplemental support services for students with special 
needs. The network will also improve basic communications between The 
State Board and the State community colleges. The additional equipment 
Iowa plans to purchase will serve to advance the quality of programs 
delivered by, and coordinated through, the postsecondary State system, 
resulting in Statewide benefit to vocational education, and maximizing 
the impact of the grantback funds.

D. The Secretary's Determination

    The Secretary has carefully reviewed the plan submitted by Iowa and 
other relevant documentation. Based upon that review, the Secretary has 
determined that the conditions under section 459 of GEPA have been met.
    This determination is 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 at a later date. 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 the 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 Iowa State 
Division of Vocational Education under a grantback arrangement. The 
grantback award would be in the amount of $99,719, which is 75 
percent--the maximum percentage authorized by the statute--of the 
principal amount of Vocational Education Basic Grant funds recovered by 
the Department as a result of the final audit determination and the 
settlement in this matter.

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

    Iowa agrees to comply with the following terms and conditions under 
which payment under a grantback arrangement would be made:
    (1) Iowa will expend the funds awarded under the grantback in 
accordance with--
    (a) All applicable statutory and regulatory requirements;
    (b) The plan that was submitted and any amendments in that plan 
that are approved in advance of the grantback by the Secretary; and
    (c) The budget that was submitted with the plan and any amendments 
to the budget that are approved in advance of the grantback 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 Iowa's plan.
    (3) Iowa will, no later than January 1, 1996, submit a report to 
the Secretary which--
    (a) Indicates that the funds awarded under the grantback have been 
spent in accordance with the proposed plan and approved budget; and
    (4) Separate accounting records must be maintained documenting the 
expenditures of funds awarded under the grantback arrangement.

(Catalog of Federal Domestic Assistance Number 84.048, Basic State 
Grants for Vocational Education).

    Dated: August 24, 1995.
Patricia W. McNeil,
Acting Assistant Secretary for Vocational and Adult Education.
[FR Doc. 95-21919 Filed 8-31-95; 8:45 am]
BILLING CODE 4000-01-P