[Federal Register Volume 62, Number 126 (Tuesday, July 1, 1997)]
[Notices]
[Page 35476]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-17205]



[[Page 35476]]

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DEPARTMENT OF EDUCATION


Intent To Compromise Audit Claim Against the Commonwealth of 
Massachusetts Department of Education

AGENCY: Department of Education.

ACTION: Notice of intent to compromise audit claim.

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SUMMARY: The United States Department of Education (Department) intends 
to compromise an audit claim against the Commonwealth of Massachusetts 
Department of Education (Massachusetts) now pending before the Office 
of Administrative Law Judges (OALJ). Docket No. 95-84-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 August 15, 
1997.

ADDRESSES: Comments should be addressed to Cathy L. Grimes-Miller, 
Esq., U.S. Department of Education, Office of the General Counsel, 600 
Independence Avenue, S.W., Room 5100, Washington, D.C. 20202.

FOR FURTHER INFORMATION CONTACT: Cathy L. Grimes-Miller, 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 affairs and operations of Massachusetts for the period 
July 1, 1991, through June 30, 1992 (State fiscal year 1992). The audit 
was performed by the independent public accounting firm of Deloitte and 
Touche to fulfill the requirements of the Single Audit Act of 1984 
(Public Law No. 98-502) and the Office of Management and Budget 
Circular No. A-128, as set forth in Department regulations at 34 CFR 
Part 80, Appendix. The audit included an evaluation of Massachusetts' 
internal control structure policies and procedures, including those 
related to administration of Federal financial assistance programs. 
Among other things, the auditors examined compliance with Federal 
maintenance of effort requirements in Massachusetts' vocational 
education program.
    The auditors found that Massachusetts did not meet the maintenance 
of effort requirement in its vocational education program for State 
fiscal year 1992 on either an aggregate or per pupil basis, as required 
by section 502(a) of the Carl D. Perkins Vocational and Applied 
Technology Education Act (Perkins Act), as amended, 20 U.S.C. 2463(a). 
The auditors recommended that Massachusetts ``make every effort to 
ensure that the state resources for the Vocational Education Program 
are sufficient to comply with the federal government's maintenance of 
effort requirement.''
    Department officials issued a program determination letter (PDL) on 
March 31, 1995. The PDL demanded a refund in the amount of $4,604,211, 
based on a determination by the Assistant Secretary for Vocational and 
Adult Education (Assistant Secretary) that Massachusetts failed to 
maintain fiscal effort in accordance with section 502(a) of the Perkins 
Act for State fiscal year 1992. Massachusetts filed a timely request 
for review of the PDL with the OALJ. Thereafter, the Administrative Law 
Judge assigned to the appeal granted the parties' joint motion to stay 
the proceeding pending voluntary mediation.
    During mediation, Massachusetts submitted substantial additional 
documentation purporting to show that it maintained fiscal effort in 
1992. After conducting a thorough review of such documentation and re-
examining the documentation upon which the PDL was based, the Assistant 
Secretary has redetermined Massachusetts' actual maintenance of effort 
shortfall for State fiscal year 1992 to be $2,311,810. Accordingly, the 
Department has withdrawn its claim for $2,292,401 of the $4,604,211 
sought in the PDL, thereby reducing the refund demanded to $2,311,810.
    The Department proposes to compromise the $2,311,810 refund 
demanded for $2,111,810. Under the proposed compromise, Massachusetts 
would repay the full principal amount of $2,111,810 by September 1, 
1997.
    The documentation submitted by Massachusetts during mediation 
consisted primarily of data and information relating to student 
enrollment and expenditures in its vocational education program for 
State fiscal years 1990 and 1991. See 20 U.S.C. 2463(a) (maintenance of 
effort determination based on State expenditures in two fiscal years 
preceding fiscal year for which determination is made). In addition, 
Massachusetts raised various legal and factual issues that could reduce 
or eliminate the remaining amounts at issue.
    Based on the amount that would be repaid by Massachusetts under the 
proposed settlement agreement, the additional documentation submitted 
by Massachusetts during mediation, and the litigation risks and costs 
of proceeding through the administrative and, possibly, court process 
for this appeal, 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. 1234a(j)(1), the 
Department has determined that compromise of this audit claim for 
$2,111,810 is appropriate.
    The public is invited to comment on the Department's intent to 
compromise this audit claim. Additional information may be obtained by 
calling or writing to Cathy L. Grimes-Miller, Esq. at the telephone 
number and address listed at the beginning of this notice.

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

    Dated: June 26, 1997.
Donald Rappaport,
Chief Financial Officer.
[FR Doc. 97-17205 Filed 6-30-97; 8:45 am]
BILLING CODE 4000-01-P