[Federal Register Volume 61, Number 32 (Thursday, February 15, 1996)]
[Notices]
[Pages 6086-6088]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-3451]




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Part III





Department of Education





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Intent to Award Grantback Funds: Connecticut; Notice

  Federal Register / Vol. 61, No. 32 / Thursday, February 15, 1996 / 
Notices   

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DEPARTMENT OF EDUCATION


Intent To Repay to the Connecticut Board of Education and 
Services for the Blind 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: Notice is given that under section 459 of the General 
Education Provisions Act (GEPA), 20 U.S.C. 1234h, the U.S. Secretary of 
Education (Secretary) intends to repay to the State of Connecticut 
Board of Education and Services for the Blind (State agency), under a 
grantback arrangement, an amount equal to 75 percent of the funds 
recovered by the U.S. Department of Education (Department) as a result 
of a final action taken by the Department on March 17, 1993 on an audit 
determination. This notice describes the State agency's plans for the 
use of the repaid 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 March 18, 1996.

ADDRESSES: Comments concerning the grantback should be addressed to Peg 
Covello, U.S. Department of Education, 600 Independence Avenue SW., 
Room 3223, Switzer Building, Washington, D.C. 20202-2735.

FOR FURTHER INFORMATION CONTACT: Peg Covello. Telephone: (202) 205-
9357. 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 $168,940 (the $159,755 disallowance 
plus interest) from the State of Connecticut Board of Education and 
Services for the Blind in response to a claim arising from an audit 
conducted by the Connecticut Office of Auditors of Public Accounts. The 
audit period was July 1, 1985 through June 30, 1987.
    The claim involved the State agency's administration of the State 
Vocational Rehabilitation Services Program (CFDA No. 84.126), the 
Independent Living Services for Older Individuals Who Are Blind program 
(CFDA No. 84.177), and the Education of Children with Disabilities in 
State Operated or Supported Schools (Chapter 1 Handicapped program) 
(CFDA No. 84.009).
    The final audit determination of the Regional Commissioner and the 
Assistant Secretary, which was issued on September 29, 1992, found that 
during the audit period the State agency had--
    (a) Overexpended $110,085 in payroll costs associated with funds 
under section 110 of the Rehabilitation Act of 1973, as amended (the 
Act), for the Federal fiscal year (FY) that ended September 30, 1986. 
Although State funds were available to adjust grant charges to the 
proper funding levels between Federal and State match accounts, the 
State Office of Policy and Management would not permit the charging of 
Federal program salaries to State budgeted appropriation accounts. As a 
result, the agency carried forward the $110,085 in payroll costs and 
reported them as expenditures for the Federal fiscal year that ended 
September 30, 1987. For these Federal fiscal years, grantees were 
required to expend Federal funds for programs authorized by section 110 
of the Act, which do not include reallotted funds, in the same Federal 
fiscal year for which they were appropriated by Congress. In addition, 
34 CFR 76.707 requires that obligations for personal services by an 
employee of the State must be made when the services are performed. 
Because the State agency had no authority to charge salaries and wages 
of employees earned in one Federal fiscal year to a subsequent Federal 
fiscal year, the Department sought recovery of $88,068 (the Federal 80 
percent share of the $110,085);
    (b) Rolled over an unexpended and unobligated balance of $32,687 in 
Independent Living Services for Older Individuals Who Are Blind program 
funds for the Federal fiscal year that ended September 30, 1987, into 
the Federal fiscal year that ended September 30, 1988, for expenditure 
without proper Federal authorization. The Education Department General 
Administrative Regulations (EDGAR), 34 CFR 75.703, states that a 
grantee may use grant funds only for obligations it makes during the 
grant period. Because the State agency expended these FY 1987 funds in 
FY 1988, the Department sought recovery of the $32,687; and
    (c) Charged to the Chapter 1 Handicapped program the total salary 
for one mobility instructor without the substantiation of time and 
effort reporting. Section 435(b)(5) of GEPA requires the State to use 
fiscal control and fund accounting procedures that will ensure proper 
disbursement of, and accounting for, Chapter 1 Handicapped program 
funds. Moreover, section 437(a) of GEPA requires each recipient of 
Federal funds under any applicable program to keep records that fully 
disclose the amount and disposition by the recipient of those funds, 
the total cost of the activity for which the funds are used, the share 
of that cost provided from other sources, and any other records that 
will facilitate an effective audit. The Department sought return of 
those unsupported expenditures of $39,000 within the statutory period.
    The final determination sought the recovery of a total of $159,755 
from the State agency.
    The State agency appealed the final determination to the 
Department's Office of Administrative Law Judges (OALJ) (Application of 
the State of Connecticut: Docket No. 92-120-R) on November 9, 1992, 10 
days after expiration of the 30-day appeal limit. In an Initial 
Decision issued January 29, 1993, the OALJ dismissed the application 
because of failure to file the Application for Review on time. On March 
17, 1993 the Secretary of Education affirmed the Initial Decision. On 
March 9, 1995 the State agency made the final repayment for a total 
recovery, with interest, of $168,940.
    The Connecticut Board of Education and Services for the Blind has 
submitted a request for a grantback of $119,816 (75 percent of the 
$159,755 recovered by the Department of Education). In its request the 
State agency provided documentation of the actions taken to correct the 
practices that resulted in the final audit determination. In October 
1994, the Department conducted a comprehensive on-site State Agency 
Financial Administrative Review (SAFAR) of the State agency. The review 
confirmed that all of the audit recommendations had been implemented 
and that the agency was in full compliance with the applicable laws and 
regulations.

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 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 State agency affected by that 
determination an amount not to exceed 75 percent of the recovered 
funds. The Secretary may enter into this so-called ``grantback'' 
arrangement if the Secretary determines that the--
    (1) Practices or procedures of the State agency that resulted in 
the final audit determination have been corrected, and 

[[Page 6087]]
the State agency is, in all other respects, in compliance with 
requirements of the applicable program;
    (2) State agency 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 State agency's plan would serve to achieve the 
purposes of the program under which funds were originally granted.

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

    In accordance with section 459(a)(2) of GEPA, the State agency 
submitted a plan for the proposed use of the funds in its April 10, 
1995 request for a grantback. In its plan, the State agency proposes to 
use the grantback of $66,051 plus the required State matching funds in 
the amount of $17,877 to supplement current State Vocational 
Rehabilitation Services Program activities.
    Over the last two years new intake procedures have been instituted 
that have resulted in an increase in intakes, clients being served, and 
individuals being placed in competitive jobs. In FY 1992, 701 clients 
were served, with 108 placed into competitive jobs. In FY 1993, 1,014 
individuals were served, with 170 placed into competitive jobs. In FY 
1994, 1,098 were served, with 177 placed into competitive jobs. Over 
this same three-year period the agency has received level or marginal 
funding increases at both the State and Federal levels. At the same 
time, program costs have increased each year in the areas of: (1) 
Adaptive technology, 31 percent of the FY 1995 budget commitments, with 
an 11 percent increase in costs over FY 1994; (2) College training, 21 
percent of the FY 1995 budget commitments, with a 35 percent increase 
in costs over FY 1994; (3) Employment related training, 20 percent of 
the FY 1995 budget, with an 81 percent increase in costs over FY 1994; 
and (4) Personal adjustment training, which shows a 200 percent 
increase over FY 1994. All of these factors combined have strained the 
available funds to meet program goals, and a grantback authorization 
would have a very positive impact on the agency's ability to continue 
increasing its number of competitive placement outcomes.
    In its plan the State agency proposes to use the grantback of 
$24,515 plus the required State matching funds in the amount of $2,724 
to supplement current Independent Living Services for Older Individuals 
Who are Blind activities. The grantback funds would be used 
specifically to design, pilot-test, and print a train-the-trainer 
guide.
    The guide would be used by key service providers, senior center 
staff, day care staff, independent living staff, and other community 
services personnel. Emphasis would be placed on improving the daily 
independence of older visually impaired individuals.
    The State agency would direct its outreach activities toward older 
individuals who are unserved and underserved by traditional agencies in 
the field of blindness.
    In its plan the State agency proposes to use the grantback of 
$29,250 (no State match required) to supplement current activities 
authorized under Part B of IDEA that were previously authorized and 
funded under the Chapter 1 Handicapped program, which was terminated 
effective FY 1995. The funds will be used specifically to provide 
Computer Camp and Social and Recreational Camp experiences for legally 
blind children in State operated or supported schools. The children 
will learn applications of advanced technology to produce braille, 
large print, and synthesized speech. The summer camps also provide 
recreational and social skill development, low-vision evaluations, aids 
and devices, and follow-up training.

D. The Secretary's Determinations

    The Secretary has reviewed the State agency's request for a 
grantback of funds, the State agency's plan (as outlined in the 
preceding section of this notice), and other information submitted by 
the State agency. Based upon that review, the Secretary has determined 
that the conditions contained in section 459 of GEPA have been met.
    The determinations are based upon the best information available to 
the Secretary at the present time. If, at a later date, this 
information is discovered to have been inaccurate or incomplete, the 
Secretary will not be precluded from taking appropriate administrative 
action at that time. In finding that the conditions of section 459 of 
GEPA have been met, the Secretary makes no determination concerning any 
pending audit recommendation or final audit determination.

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

    Section 459(d) of GEPA requires that, at least 30 days prior to 
entering into an arrangement to award funds under a grantback, the 
Secretary 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 Connecticut 
Board of Education and Services to the Blind under a grantback 
arrangement, as authorized by section 459. The grantback award will be 
in the amount of $119,816. This amount is 75 percent--maximum 
percentage authorized by section 459--of the amount of funds recovered 
by the Department. The Secretary's intent to award the maximum amount 
of grantback funds possible under section 459 is based upon the 
determinations outlined in section D of this notice.

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

    The State agency agrees to comply with the following terms and 
conditions under which payments under a grantback arrangement will be 
made:
    (a) The funds awarded under the grantback and the required State 
matching funds must be expended in accordance with--
    (1) All applicable statutory and regulatory requirements of The 
State Vocational Rehabilitation Services Program, including those 
provisions relating to an order of selection if such an order is in 
effect during the grantback period, the Independent Living Services for 
Older Individuals Who Are Blind program, and Part B of IDEA, as 
appropriate;
    (2) The plan and the request for the grantback that were submitted 
on April 10, 1995, and any other amendments to that plan that are 
approved in advance of the grantback award 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) Pursuant to section 459(c) of GEPA, all funds received under 
this grantback arrangement must be obligated no later than September 
30, 1996.
    (c) The State agency must submit two annual reports (not later than 
December 31, 1995 and December 31, 1996 respectively) to the Secretary 
that--
    (1) Indicate how the funds awarded under the grantback and the 
State matching funds have been expended in accordance with the proposed 
plan; and
    (2) Describe the results and effectiveness of the project for which 
the funds were expended. 

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    (d) The State matching funds expended under the grantback 
arrangement in accordance with The State Vocational Rehabilitation 
Services Program will be counted for maintenance of effort purposes 
under The State Vocational Rehabilitation Services Program.
    (e) Separate accounting records must be maintained documenting the 
expenditure of all funds under the grantback arrangement.
    (f) Before funds will be repaid pursuant to this notice, the State 
agency must repay to the Department any debts that become overdue or 
enter into a repayment agreement for those debts.

(Catalog of Federal Domestic Assistance Numbers 84.126 The State 
Vocational Rehabilitation Services Program; 84.177 Independent 
Living Services for Older Individuals Who Are Blind; and 84.027 
Assistance to States for Education of Children With Disabilities)

    Dated: February 9, 1996.
Howard R. Moses,
Acting Assistant Secretary for Special Education and Rehabilitative 
Services.
[FR Doc. 96-3451 Filed 2-14-96; 8:45 am]
BILLING CODE 4000-01-P