[Federal Register Volume 61, Number 66 (Thursday, April 4, 1996)]
[Notices]
[Page 15058]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-8300]



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DEPARTMENT OF EDUCATION


Office of Administrative Law Judges; Notice of Intent To 
Compromise a Claim; Alaska Department of Education

SUMMARY: The Department intends to compromise a claim against the 
Alaska Department of Education (Alaska) now pending before the Office 
of Administrative Law Judges (OALJ). Docket No. 94-204-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 May 20, 1996.

ADDRESSES: Comments should be addressed to Lynette Charboneau, Office 
of the General Counsel, U.S. Department of Education, 600 Independence 
Avenue, S.W. (Room 5312, FB 10B), Washington, D.C. 20202.

FOR FURTHER INFORMATION CONTACT: Lynette Charboneau, 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 assistance programs of Alaska for the fiscal year ending 
June 30, 1991. The audit was performed by the Alaska Division of 
Legislative Audit, to fulfill the requirements of Office of Management 
and Budget Circular A-128. The audit included an evaluation of the 
internal control systems used in administering Federal financial 
assistance programs.
    Among the systems examined were Alaska's procedures for 
administering funds awarded under Title II of the Carl D. Perkins 
Vocational Education Act (Perkins Act), 20 U.S.C. 2331 (1988). The 
Perkins Act imposed specific requirements as to a State's allocation of 
Title II funds among State administration, Part A, and Part B. See 20 
U.S.C. 2312 (1988). A State could reserve up to 7 percent of the total 
grant for Title II for State administration, including $60,000 for sex 
equity administration, plus an additional amount by which the $60,000 
exceeded 1 percent of the State's total grant under Title II. After 
funds were reserved for administration, the State was required to 
allocate the remainder 57 percent to Part A and 43 percent to Part B. 
The 57 percent for Part A was to be further reserved to benefit 
specific targeted groups of students. See 20 U.S.C. 2332 (1988). Thus, 
if a State expended more than the allowable 7 percent on State 
administration, it would necessarily have to spend less than the 
mandated amount for Part A or Part B, or both.
    The auditors found that Alaska's expenditures for State 
administration in Fiscal Years (FYs) 1990 and 1991 exceeded the 7 
percent cap. Further, the auditors found that in FY 1990 the State's 
expenditures under Part B exceeded the allowable 43 percent. On October 
19, 1994, the Department's Assistant Secretary for Vocational and Adult 
Education (Assistant Secretary) issued a program determination letter 
(PDL) sustaining the auditors' findings and requiring Alaska to repay 
$414,657.72 for the amounts of the overfunding of State administration 
and Part B (and corresponding underfunding of Part A) in FYs 1990 and 
1991.
    Alaska filed a timely appeal with the Office of Administrative Law 
Judges (OALJ). After filing its brief and evidence, Alaska offered to 
settle the claim against it. The administrative law judge (ALJ) 
appointed to hear this appeal stayed the proceeding to allow counsel to 
seek formal approval of the tentative settlement.
    Based on documentation submitted by Alaska during the course of the 
proceedings before the OALJ demonstrating that $168,116.27 of the funds 
were allowable, the Assistant Secretary has decided to reduce the claim 
to $246,541.45. The Department proposes to compromise the remaining 
claim for $91,500. After receiving the PDL, Alaska submitted 
information directly to the Assistant Secretary to show that its FSRs 
reflected reporting errors as to the amount of Title II funds expended 
for State administration. Additionally, during the course of its appeal 
to the OALJ, Alaska submitted voluminous evidence in an attempt to show 
that the State could have charged to Part A many of the overcharges to 
Part B because of the overlapping purposes and goals of those program 
authorities.
    After consideration of the documentation and arguments presented by 
Alaska to the OALJ, the Assistant Secretary has decided to reduce the 
repayment demanded by $168,116.27, and the Department proposes to 
settle the remaining claim of $246,541.45 for $91,500. Given the amount 
that would be repaid by Alaska under the settlement agreement, the 
additional documentation, 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. 
Sec. 1234a(j)(1), the Department has determined that a compromise of 
this claim for $91,500 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 Lynette Charboneau at the address given at the beginning of 
this notice.

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

    Dated: April 1, 1996.
Donald R. Wurtz,
Chief Financial Officer.
[FR Doc. 96-8300 Filed 4-3-96; 8:45 am]
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