[Federal Register Volume 83, Number 104 (Wednesday, May 30, 2018)]
[Notices]
[Pages 24751-24754]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-11592]


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DEPARTMENT OF EDUCATION

[Docket ID ED-2018-OESE-0048]


Intent To Award Grantback Funds to the Pennsylvania Department of 
Education

AGENCY: Office of Elementary and Secondary Education, Department of 
Education.

[[Page 24752]]


ACTION: Notice.

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SUMMARY: Under section 459 of the General Education Provisions Act 
(GEPA), the Secretary of Education (Secretary) intends to repay to the 
Pennsylvania Department of Education (PDE) an amount that represents 
approximately 75 percent of the amount of funds recovered by the 
Department of Education (Department) under Title I, Part A and Title 
IV, Part A of the Elementary and Secondary Education Act (ESEA), as 
amended by the No Child Left Behind Act (NCLB), Catalog of Federal 
Domestic Assistance (CFDA) number 84.010A. This notice describes PDE's 
plans for the use of the repaid funds and the terms and conditions 
under which the Secretary intends to make grantback funds available. 
This notice invites comments on the proposed grantback.

DATES: We must receive your comments on or before June 29, 2018.

ADDRESSES: Submit your comments through the Federal eRulemaking Portal 
or via postal mail, commercial delivery, or hand delivery. We will not 
accept comments submitted by fax or by email or those submitted after 
the comment period. To ensure that we do not receive duplicate copies, 
please submit your comments only once. In addition, please include the 
Docket ID at the top of your comments.
     Federal eRulemaking Portal: Go to www.regulations.gov to 
submit your comments electronically. Information on using 
Regulations.gov, including instructions for accessing agency documents, 
submitting comments, and viewing the docket, is available on the site 
under ``Help.''
     Postal Mail, Commercial Delivery, or Hand Delivery: The 
Department strongly encourages commenters to submit their comments 
electronically. However, if you mail or deliver your comments about 
this proposed grantback, address them to James Butler, U.S. Department 
of Education, 400 Maryland Avenue SW, Room 3W246, Washington, DC 20202-
4260.
    Privacy Note: The Department's policy is to make all comments 
received from members of the public available for public viewing in 
their entirety on the Federal eRulemaking Portal at 
www.regulations.gov. Therefore, commenters should be careful to include 
in their comments only information that they wish to make publicly 
available.

FOR FURTHER INFORMATION CONTACT: James Butler, U.S. Department of 
Education, 400 Maryland Avenue SW, Room 3W246, Washington, DC 20202-
4260. Telephone: 202-260-9737. Email: [email protected].
    If you use a telecommunications device for the deaf (TDD) or a text 
telephone (TTY), you may call the Federal Relay Service, toll free, at 
1-800-877-8339.

SUPPLEMENTARY INFORMATION: 
    Invitation to Comment: We invite you to submit comments regarding 
this notice. To ensure that your comments have maximum effect on the 
Secretary's decision regarding awarding this grantback, we urge you to 
identify clearly the specific proposal that each comment addresses.
    During and after the comment period, you may inspect all public 
comments about this notice in 400 Maryland Avenue SW, Room 3W246, 
Washington, DC 20202 between the hours of 8:30 a.m. and 4:00 p.m., 
Eastern Time, Monday through Friday of each week except Federal 
holidays. If you want to schedule time to inspect comments, please 
contact the person listed under FOR FURTHER INFORMATION CONTACT.
    Assistance to Individuals with Disabilities in Reviewing the 
Rulemaking Record: On request, we will provide an appropriate 
accommodation or auxiliary aid to an individual with a disability who 
needs assistance to review the comments or other documents in the 
public rulemaking record for this notice. If you want to schedule an 
appointment for this type of accommodation or auxiliary aid, please 
contact the person listed under FOR FURTHER INFORMATION CONTACT.

A. Background

    In March 2017, the Department recovered $7,186,222 from PDE 
relating to findings in a March 29, 2011, program determination letter 
(PDL) issued by the Office of Elementary and Secondary Education and 
the Office of Safe and Drug-Free Schools. The PDL followed an audit 
report by the Department's Office of Inspector General (OIG) of the 
School District of Philadelphia's (SDP) control over Federal 
expenditures, covering the audit period July 1, 2005, through June 30, 
2006 (Audit Control Number ED-OIG-A03H0010). The PDL sustained certain 
audit findings and disallowed a total of $9,968,423. Through settlement 
negotiations, the Department and PDE agreed that $2,782,201 was barred 
from recovery by the statute of limitations. PDE appealed the remaining 
$7,186,222 liability to an Administrative Law Judge, the Secretary, and 
the U.S. Court of Appeals for the Third Circuit. The Third Circuit 
denied PDE's petition for review, and sustained the remaining 
liability. PDE filed a Petition for Writ of Certiorari with the U.S. 
Supreme Court, which was denied on October 3, 2016. SDP paid the full 
liability to PDE, and in turn, PDE has paid the full liability to the 
Department.
    The claims arose under the ESEA, as amended by NCLB (Pub. L. 107-
110), 20 U.S.C. 6301 et seq.\1\ Of the total amount recovered, 
$7,074,599 resolved findings related to Title I, Part A of the ESEA, 
and $111,007 resolved findings related to Title IV, Part A of the ESEA, 
also referred to as the Safe and Drug-Free Schools and Community Act 
(SDFSCA). In its grantback application, PDE requests repayment in the 
amount of $5,389,204, representing approximately 75 percent of the 
total amount related to Title I, Part A and SDFSCA.
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    \1\ In 2015, the ESEA was amended by the Every Student Succeeds 
Act (Pub. L. 114-95).
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    The Department's claims of $7,074,599 related to Title I, Part A 
were contained in Findings 2, 4, and 5 of the March 29, 2011 PDL, and 
the claims of $111,007 related to SDFSCA were contained in Findings 4 
and 5. As for Title I, Part A, the Department found that SDP had 
violated section 1120A(b) of the ESEA, as amended by NCLB, by using 
Title I, Part A funds to supplant non-Federal funds in payments for 
certain consulting contracts, and that SDP had charged the full cost, 
rather than the incremental cost, as allowed, of transporting students 
to the school of their choice. In addition, the Department found that 
SDP had inadequate procedures for processing transportation costs for 
afterschool programs, resulting in overcharges to Title I, Part A and 
violations of 34 CFR 76.731, 80.20, and 80.22(b), and OMB Circular A-
87, Attachment A, Section C.\2\ For both Title I, Part A and SDFSCA, 
the Department found that SDP had inadequate procedures for charging 
indirect costs to Federal programs and for processing journal voucher 
transfers for staff salaries and fringe benefits, resulting in 
overcharging costs to both ESEA programs and violations of 34 CFR 
76.731, 80.20, and 80.22(b), and OMB Circular A-87, Attachment A, 
Section C.
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    \2\ In 2014, the Uniform Administrative Requirements, Cost 
Principles, and Audit Requirements for Federal Awards (2 CFR part 
200) replaced 34 CFR part 80 and OMB Circular A-87, among other 
provisions.
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    Following the release of the OIG Audit Report, PDE and SDP 
immediately took steps to ensure that the practices that led to the 
audit findings would not reoccur. In collaboration with PDE and the 
Department's Risk Management Service, SDP developed and began 
implementing five corrective action initiatives directly

[[Page 24753]]

responsive to the audit findings and has been implementing these 
procedures since that time. PDE assures that SDP, with the oversight of 
PDE, has fully resolved the findings from the OIG audit report.

B. Authority for Awarding a Grantback

    Section 459(a) of GEPA, 20 U.S.C. 1234h(a), provides that, whenever 
the Secretary has recovered funds under an applicable program because 
the recipient made an expenditure of funds that was not allowable, the 
Secretary may consider those funds to be additional funds available for 
the program and may arrange to repay to the grantee affected by that 
determination an amount not to exceed 75 percent of the recovered 
funds. The Secretary may enter into this grantback requested by PDE if 
the Secretary determines that--
    (a) The practices and procedures that resulted in the audit 
findings in question have been corrected, and the recipients are in 
compliance with the requirements of the applicable programs;
    (b) PDE 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 
misexpenditures that resulted in the recovery; and
    (c) The use of funds to be awarded under the grantback arrangement 
in accordance with that plan would serve to achieve the purposes of the 
program under which the funds were originally granted.

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

    Pursuant to section 459(a)(2) of GEPA, PDE has applied for a 
grantback totaling $5,389,204, which is approximately 75 percent of the 
principal amount of the recovered Title I, Part A and SDFSCA funds, and 
has submitted a plan outlining the activities that would be supported 
with the grantback funds. While the ESSA amendments to the ESEA 
eliminated SDFSCA, activities formerly authorized under SDFSCA can 
currently be supported through Title I, Part A of the ESEA, as amended 
by ESSA, and PDE plans to use $85,000 in grantback funds--slightly more 
than the proportion of grantback funds related to SDFSCA--for 
activities that would have been authorized under SDFSCA.
    SDP plans to use grantback funds for three activities in the 2018-
19 school year. First, SDP proposes a math initiative to improve 
teaching skills and student learning. As proposed, SDP would provide 
approximately 1,000 kindergarten through 12th grade math teachers with 
a week-long professional learning institute in the summer of 2018. 
Additionally, SDP would provide designated math lead teachers in 
participating schools with compensation for leading planning and 
professional development sessions outside of the school day. Finally, 
SDP would provide eligible schools that participated in the summer 
institute with funds for extracurricular salary support for 
facilitating before and after school sessions for students, and give 
preference for those funds to low-performing schools.
    Next, SDP plans to use grantback funds to provide seven full-time 
reading specialists to support kindergarten through third grade 
students who are significantly behind their expected reading level. The 
specialists would work with targeted students at least weekly in small 
groups using specially designed lesson plans that use best practices to 
scaffold student learning.
    Finally, SDP plans to use grantback funds to support a school 
climate initiative in five schools. A coach would provide participating 
schools with training on how to implement a curriculum centered on 
social and emotional learning as well as bullying prevention. The coach 
would work with each school to develop a training plan, provide 
technical assistance in implementing and teaching the lessons, and 
monitor implementation.

D. The Secretary's Determinations

    The Secretary has carefully reviewed the plan submitted by PDE. 
Based upon that review, the Secretary has determined that the 
conditions under section 459(a) 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. In finding that the conditions of section 459(a) 
of GEPA have been met, the Secretary makes no determination concerning 
any pending audit recommendations or final audit determinations.
    The Secretary also has concluded that, to the extent possible, this 
grantback award would support the provision of services to the 
population of intended beneficiaries of the program under which the 
Title I, Part A and SDFSCA grants were originally made. The population 
of intended beneficiaries may not have received the full benefit of the 
services intended by the Title I, Part A and SDFSCA grant awards, due 
to the problems that gave rise to the audit recovery described in 
Section A of this notice. However, the Secretary has determined that if 
awarded, this grantback would advance and support the same policy goals 
and purposes of the statutory provisions that authorized the Title I, 
Part A and SDFSCA programs, and would be used in compliance with all 
current statutory and regulatory program requirements.

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

    Section 459(d) of GEPA requires that, at least 30 days before 
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 would be made. In 
accordance with section 459(d) of GEPA, notice is hereby given that the 
Secretary intends to make funds available to PDE under a grantback 
arrangement. The grantback award would be in the amount of $5,389,204, 
which is approximately 75 percent of the principal amount recovered.

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

    PDE agrees to comply with the following terms and conditions under 
which payments under a grantback arrangement would be made:
    (a) The funds awarded under the grantback must be spent in 
accordance with--
    (1) All applicable statutory and regulatory requirements;
    (2) The submitted plan and any amendments to the plan that are 
approved in advance by the Secretary; and
    (3) The budget submitted with the approved plan and any amendments 
to the budget that are approved in advance by the Secretary.
    (b) All funds received under the grantback arrangement must be 
obligated by September 30, 2020, in accordance with section 459(c) of 
GEPA and PDE's approved plan.
    (c) PDE must, no later than December 31 of each year for which it 
has funds under this grantback, submit a report to the Secretary that 
documents the expenditure of funds and progress of activities under the 
grantback arrangement.
    (d) PDE must, no later than December 31, 2020, submit a report to 
the Secretary that--
    (1) Indicates that the funds awarded under the grantback have been 
spent in

[[Page 24754]]

accordance with the proposed plan and any amendments that have been 
approved in advance by the Secretary; and
    (2) Describes the results and effectiveness of the project for 
which the funds were spent.
    (e) PDE must maintain separate accounting records documenting the 
expenditures of funds awarded under the grantback arrangement.
    Accessible Format: Individuals with disabilities can obtain this 
document in an accessible format (e.g., braille, large print, 
audiotape, or compact disc) by contacting the person listed under FOR 
FURTHER INFORMATION CONTACT.
    Electronic Access to This Document: The official version of this 
document is the document published in the Federal Register. You may 
access the official edition of the Federal Register and the Code of 
Federal Regulations via the Federal Digital System at: www.gpo.gov/fdsys. At this site you can view this document, as well as all other 
documents of this Department published in the Federal Register, in text 
or Portable Document Format (PDF). To use PDF you must have Adobe 
Acrobat Reader, which is available free at the site.
    You may also access documents of the Department published in the 
Federal Register by using the article search feature at: 
www.federalregister.gov. Specifically, through the advanced search 
feature at this site, you can limit your search to documents published 
by the Department.

    Dated: May 24, 2018.
Jason Botel,
Principal Deputy Assistant Secretary Delegated the authority to perform 
the functions and duties of the Assistant Secretary of Elementary and 
Secondary Education.
[FR Doc. 2018-11592 Filed 5-29-18; 8:45 am]
 BILLING CODE 4000-01-P