[Federal Register Volume 61, Number 58 (Monday, March 25, 1996)]
[Notices]
[Page 12061]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-7161]



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DEPARTMENT OF EDUCATION


Intent To Compromise Two Audit Claims Against Connecticut State 
Board of Education

AGENCY: Department of Education.

ACTION: Notice of intent to compromise two audit claims.

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SUMMARY: The U.S. Department of Education (the Department) intends to 
compromise two audit claims against the Connecticut State Board of 
Education (Connecticut) now pending before the Office of Administrative 
Law Judges (OALJ). Docket Nos. 92-53-R and 94-68-R (20 U.S.C. 
1234a(j)).

DATES: Interested persons may comment on the proposed action by 
submitting written data, views, or arguments May 9, 1996.

ADDRESSES: Comments should be addressed to Effie Forde, Office of the 
General Counsel, U.S. Department of Education, 600 Independence Avenue, 
SW., (Room 5200, FB 10), Washington, DC 20202.

FOR FURTHER INFORMATION CONTACT: Effie Forde, 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 claims in question arose from two 
separate audits of the financial affairs and operations of Connecticut 
for fiscal years 1988 through 1991. The audits were performed by the 
State of Connecticut Auditor of Public Accounts to fulfill the 
requirements of Office of Management and Budget (OMB) Circular A-128. 
The audits included the evaluation of the internal control systems, 
including applicable internal administrative controls used in 
administering Federal financial assistance programs. Among the systems 
examined, the auditors reviewed Connecticut's procedures for allocating 
among programs costs for individual employees who had multi-program 
responsibilities.
    Department officials issued two separate program determination 
letters (PDLs) to Connecticut. The first PDL was issued on March 31, 
1992 demanding a refund in the amount of $575,329 (Connecticut I) for 
violations of the requirements in OMB Circular A-87 relating to 
recordkeeping for employees with multi-program responsibilities. Funds 
were disallowed for the following programs: Bilingual Education State 
Grant ($94,134); Education Consolidation and Improvement Act (ECIA) 
Migrant Education State Formula Grant ($108,358); Chapter 1 of the 
ECIA, Education for the Disadvantaged, State Administration ($36,120); 
Chapter 2 of the ECIA ($263,605); Part B of the Education of the 
Handicapped Act ($29,272); and Preschool Grants for Children with 
Disabilities ($43,910). Based on documentation submitted by Connecticut 
during the course of its appeal before the OALJ, the Department has 
withdrawn its claims relating to Chapter 2 of the ECIA ($263,605) and 
the Bilingual Education State Grant ($94,134). With the withdrawal of 
these two claims, the funds remaining at issue in Connecticut I have 
been reduced from $575,329 to $217,590.
    The Department issued the second PDL on March 25, 1994 (Connecticut 
II) disallowing a total of $558,162 for similar recordkeeping 
violations relating to the following Federal programs: Bilingual 
Education State Grant program ($100,566); Carl D. Perkins Vocational 
Education Act ($3,133); Chapter 1 Handicapped ($201,438); Chapter 2 of 
the Elementary and Secondary Education Act (ESEA) ($234,640); and 
Handicapped Special Studies ($18,385). Based on documentation submitted 
by Connecticut after it filed its application for review with the OALJ, 
the Department has withdrawn its claims relating to Chapter 2 of the 
ESEA ($234,640) and the Bilingual Education State Grant ($100,566). As 
a result, the amount of funds remaining at issue in Connecticut II is 
$222,956.
    Connecticut filed timely requests for review of the two PDLs with 
the OALJ. Thereafter, the Administrative Law Judge assigned to the 
appeals granted the parties' joint motion to enter into settlement 
negotiations.
    The Department proposes to compromise the amount remaining at issue 
in Connecticut I ($217,590) for $82,500 and the amount at issue in 
Connecticut II ($222,956) for $64,260. Under the proposed compromise, 
Connecticut therefore would repay a total principal amount of $147,760, 
plus accrued interest, in three equal installments. Although 
Connecticut I and II are being resolved together through one settlement 
agreement, they involve separate PDLs and claims for purposes of the 
dollar limitation in 20 U.S.C. 1234a(j)(1) on the Secretary's authority 
to compromise claims.
    During settlement negotiations, Connecticut provided substantial 
additional documentation and information relating to the individual 
employees at issue, their job duties, and how they spent their time. 
Furthermore, Connecticut raised additional legal and factual issues 
that could reduce or eliminate the remaining amounts at issue.
    Given the amount that would be repaid by Connecticut under the 
settlement agreement, the additional documentation submitted during 
settlement discussions, and the litigation risks and costs of 
proceeding through the appeal process for both appeals, the Department 
has determined that it would not be practical or in the public interest 
to continue these proceedings. Rather, under the authority provided in 
20 U.S.C. 1234a(j)(1), the Department has determined that compromise of 
these claims for $146,760 would be appropriate.
    The public is invited comment on the Department's intent to 
compromise these claims. Additional information may be obtained by 
writing to Effie Forde at the address given at the beginning of this 
notice.

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

    Dated: March 19, 1996.
Donald R. Wurtz,
Chief Financial Officer.
[FR Doc. 96-7161 Filed 3-22-96; 8:45 am]
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