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B-223088, JUN 1, 1987

B-223088 Jun 01, 1987
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THEY SATISFY THE GENERAL DEFINITION OF "APPLICABLE PROGRAM" UNDER THE GENERAL EDUCATION PROVISIONS ACT AND ARE SUBJECT TO THE EDUCATION APPEALS BOARD'S AUDIT APPEAL JURISDICTION. HOUSE OF REPRESENTATIVES: THIS IS IN RESPONSE TO YOUR REQUEST FOR CLARIFICATION OF WHETHER THE "USE OF RECOVERED FUNDS" OR GRANT-BACK PROVISION OF THE GENERAL EDUCATION PROVISIONS ACT (GEPA). THE BOARD WAS AUTHORIZED TO CONDUCT AUDIT APPEAL HEARINGS. YOU ARE NEVERTHELESS CONCERNED THAT THE PART E AUDIT DETERMINATION PROVISION (20 U.S.C. WHICH ARE NOT ADMINISTERED BY STATE AND LOCAL EDUCATIONAL AGENCIES. YOU HAVE ASKED THAT WE: (1) DEFINE "APPLICABLE PROGRAM" AS USED IN THE GRANT-BACK PROVISION AND (2) DETERMINE IF THE LSCA PROGRAMS ARE COVERED BY THIS PROVISION.

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B-223088, JUN 1, 1987

APPROPRIATIONS/FINANCIAL MANAGEMENT - FEDERAL ASSISTANCE - GRANTS - REFUNDS - EDUCATIONAL PROGRAMS MISCELLANEOUS TOPICS - HUMAN RESOURCES - EDUCATIONAL PROGRAMS - LIBRARY SERVICES - GRANTS - REFUNDS DIGEST: GRANTEE UNDER THE LIBRARY SERVICES CONSTRUCTION ACT MAY BE ELIGIBLE FOR GRANT-BACKS OF FUNDS RECOVERED BY THE DEPARTMENT OF EDUCATION AFTER FINAL AUDIT DETERMINATIONS UNDER THE GENERAL EDUCATION PROVISIONS ACT GRANT-BACK PROVISION. 20 U.S.C. 1234E. THESE PROGRAMS MEET THE TWO REQUIREMENTS OF THE STATUTE AND IMPLEMENTING REGULATIONS FOR ELIGIBILITY. THEY SATISFY THE GENERAL DEFINITION OF "APPLICABLE PROGRAM" UNDER THE GENERAL EDUCATION PROVISIONS ACT AND ARE SUBJECT TO THE EDUCATION APPEALS BOARD'S AUDIT APPEAL JURISDICTION.

THE HONERABLE TERRY L. BRUCE, HOUSE OF REPRESENTATIVES:

THIS IS IN RESPONSE TO YOUR REQUEST FOR CLARIFICATION OF WHETHER THE "USE OF RECOVERED FUNDS" OR GRANT-BACK PROVISION OF THE GENERAL EDUCATION PROVISIONS ACT (GEPA), 20 U.S.C. SEC. 1234E, APPLIES TO PROGRAMS FUNDED UNDER THE LIBRARY SERVICES AND CONSTRUCTION ACT (LSCA), 20 U.S.C. SECS. 351 ET SEQ. AS EXPLAINED BELOW, WE FIND THAT THE GRANT BACK PROVISION DOES APPLY TO THE LSCA PROGRAMS.

BACKGROUND

THE EDUCATION AMENDMENTS OF 1978, PUB.L. NO. 95-561, 92 STAT. 2143, 2346- 2351 (1978), ESTABLISHED A NEW PART E OF GEPA. (SUBCHAPTER V, CHAPTER 31 OF TITLE 20 OF THE UNITED STATES CODE.) THIS PART CONSOLIDATED PROVISIONS RELATING TO ENFORCEMENT AND JUDICIAL REVIEW IN EXISTING STATE-OPERATED PROGRAMS AND ESTABLISHED A COMPREHENSIVE SYSTEM FOR ENFORCEMENT OF EDUCATION PROGRAM REQUIREMENTS. H.R. REP. NO. 1137, 95TH CONG., 2ND SESS. 141 (1978). PART E CREATED THE "USE OF RECOVERED FUNDS" OR GRANT-BACK PROVISION, AND ALSO ESTABLISHED THE EDUCATION APPEAL BOARD (EAB) AND JUDICIAL REVIEW PROCEDURES FOR THOSE ADVERSELY AFFECTED BY ACTIONS TAKEN BY THE BOARD. THE BOARD WAS AUTHORIZED TO CONDUCT AUDIT APPEAL HEARINGS, WITHHOLDING HEARINGS, CEASE AND DESIST HEARINGS, AND OTHER PROCEEDINGS DESIGNATED BY THE SECRETARY OF EDUCATION. 20 U.S.C. SECS. 1234 ET SEQ.

THE GRANT-BACK PROVISION ALLOWS THE SECRETARY OF EDUCATION, UNDER CERTAIN CIRCUMSTANCES, TO REPAY TO A STATE OR LOCAL AGENCY UP TO 75 PERCENT OF THE FUNDS RECOVERED FOLLOWING A FINAL AUDIT DETERMINATION WITH RESPECT "TO ANY APPLICABLE PROGRAM." 20 U.S.C. SEC. 1234E. ALTHOUGH YOU RECOGNIZE THAT THE GEPA PROVIDES A GENERAL DEFINITION FOR "APPLICABLE PROGRAMS" /1/ THAT WOULD COVER THE LSCA PROGRAMS, YOU ARE NEVERTHELESS CONCERNED THAT THE PART E AUDIT DETERMINATION PROVISION (20 U.S.C. SEC. 1234A) NARROWS THE DEFINITION OF THIS ON ITS FACE, COVER THE LSCA PROGRAMS, WHICH ARE NOT ADMINISTERED BY STATE AND LOCAL EDUCATIONAL AGENCIES. THEREFORE, YOU HAVE ASKED THAT WE: (1) DEFINE "APPLICABLE PROGRAM" AS USED IN THE GRANT-BACK PROVISION AND (2) DETERMINE IF THE LSCA PROGRAMS ARE COVERED BY THIS PROVISION.

DISCUSSION

TO ANSWER THESE QUESTIONS, WE REQUESTED AND RECEIVED THE VIEWS OF THE DEPARTMENT OF EDUCATION. THE DEPARTMENT STATES THAT THE TERM "APPLICABLE PROGRAM" AS USED IN THE GRANT-BACK PROVISION COVERS THE SAME PROGRAMS AS THE GENERAL GEPA DEFINITION. HOWEVER, SINCE THE SECTION 1234E GRANT-BACK PROVISION IS ONLY AVAILABLE TO ELIGIBLE PROGRAMS "FOLLOWING A FINAL AUDIT DETERMINATION," IT IS THE DEPARTMENT'S POSITION THAT TO BE WITHIN THE SCOPE OF THE SECTION, A PROGRAM MUST BE BOTH AN "APPLICABLE PROGRAM" UNDER GEPA AND SUBJECT TO FINAL AUDIT DETERMINATIONS UNDER APPEAL BOARD JURISDICTION.

IN THE DEPARTMENT'S VIEW "APPLYING THE GRANT-BACK PROVISION ONLY TO PROGRAMS WITHIN THE BOARD'S JURISDICTION IS CONSISTENT WITH THE INTENT OF THE CONGRESS TO ESTABLISH AN INTERRELATED SCHEME FOR THE ENFORCEMENT OF SPECIFIC FEDERAL EDUCATION LAWS THROUGH PART E OF GEPA." THE LEGISLATIVE HISTORY OF PART E SUPPORTS THE DEPARTMENT'S CONTENTION THAT THE CONGRESS INTENDED THAT PART E ESTABLISH A COMPREHENSIVE ENFORCEMENT SYSTEM RELATING TO EDUCATIONAL PROGRAMS. H.R. REP.NO. 1137, SUPRA.

SINCE THE LSCA PROGRAMS ARE CLEARLY "APPLICABLE PROGRAMS" AS DEFINED BY GEPA, THE ISSUE IN DETERMINING WHETHER THESE PROGRAMS ARE COVERED BY THE GRANT-BACK PROVISION IS WHETHER THEY FALL WITHIN THE SCOPE OF THE TERM "FINAL AUDIT DETERMINATION."

AS STATED ABOVE, THE LSCA PROGRAMS ARE NOT EXPRESSLY COVERED BY THE AUDIT DETERMINATION DESIGNATIONS SET OUT IN SECTION 1234A, WHICH REFER SPECIFICALLY TO CERTAIN PROGRAMS ADMINISTERED BY STATE AND LOCAL EDUCATIONAL AGENCIES. /2/ HOWEVER, THE GRANT-BACK LANGUAGE OF SECTION 1234E IS NOT LIMITED TO PROGRAMS IN WHICH FUNDS HAVE BEEN RECOVERED FROM STATE OR LOCAL EDUCATIONAL AGENCIES, PURSUANT TO SECTION 1234A. INSTEAD, IT CONTEMPLATES GRANT-BACKS "TO THE STATE OR LOCAL AGENCY" FROM WHICH FUNDS WERE RECOVERED, FOLLOWING A FINAL AUDIT DETERMINATION WITH RESPECT TO ANY APPLICABLE PROGRAM. FINAL AUDIT DETERMINATIONS ARE NORMAL PRACTICE UNDER ASSISTANCE PROGRAMS AND DO NOT REQUIRE EXPRESS AUTHORITY. FURTHER, BY VIRTUE OF THE COMMISSIONER'S, AND NOW THE SECRETARY'S, DESIGNATION UNDER 20 U.S.C. SEC. 1234, WHICH ESTABLISHES THE BOARD AND ITS FUNCTIONS, THESE PROGRAMS HAVE ALWAYS BEEN INCLUDED WITHIN THE BOARD'S AUDIT JURISDICTION.

SECTION 1234(A) AUTHORIZES THE SECRETARY TO DESIGNATE THE FUNCTIONS OF THE BOARD AND THE TYPE OF PROCEEDING IT IS TO CONDUCT. PARAGRAPH 4 OF THAT SECTION LISTS "OTHER PROCEEDINGS AS DESIGNATED BY THE SECRETARY." UNDER THE FIRST REGULATIONS ESTABLISHING THE BOARD, THE THEN COMMISSIONER OF EDUCATION SPECIFICALLY DESIGNATED THE LSCA PROGRAMS AS FALLING WITHIN THE BOARD'S AUDIT APPEAL JURISDICTION, 44 FED.REG. 30528, 30535, MAY 25, 1979; 45 C.F.R. PART 100E, APP. A, (B)(3) (1979). THESE REGULATIONS HAVE BEEN SUBSEQUENTLY AMENDED. THROUGH THESE AMENDMENTS, THE SECRETARY HAD BROADLY DESIGNATED ALL "APPLICABLE PROGRAMS" (EXCEPT FOR CERTAIN STUDENT FINANCIAL ASSISTANCE PROGRAMS NOT PERTINENT HERE) AS COMING WITHIN THE BOARD'S JURISDICTION. 34 C.F.R. SECS. 78.2(A), 78.3. THE LSCA PROGRAMS ARE CLEARLY COVERED UNDER THIS BROAD DESIGNATION.

A DESIGNATION BY THE SECRETARY NOT ONLY BRINGS THE PROGRAM IN QUESTION WITHIN THE BOARD'S JURISDICTION, BUT ALSO WITHIN THE SCOPE OF GEPA'S PART E (UNLESS SPECIFICALLY PRECLUDED BY STATUTE OR PROGRAMMATIC SCHEME). SEE, E.G., TEXAS V. UNITED STATES, NO. A-86-CA-078 (ORDER) (W.D. TEX., JULY 22, 1986) (JUDICIAL REVIEW APPLIES TO DESIGNATED PROGRAMS). THIS POSITION HAS BEEN ADOPTED BY THE DEPARTMENT OF EDUCATION.

CONCLUSION

SINCE THE LSCA PROGRAMS ARE "APPLICABLE PROGRAMS" WHICH ARE WITHIN THE AUDIT JURISDICTION OF THE EDUCATION APPEALS BOARD, THESE PROGRAMS ARE SUBJECT TO SECTION 1234E GRANT-BACK PROVISIONS.

THIS LETTER WILL BE AVAILABLE FOR PUBLIC DISTRIBUTION AFTER 30 DAYS UNLESS YOU PROVIDE FOR ITS EARLIER RELEASE.

/1/ UNDER THE GEPA, 20 U.S.C. SECS. 1221 ET SEQ., "APPLICABLE PROGRAM" MEANS ANY PROGRAM TO WHICH GEPA APPLIES. 20 U.S.C. SEC. 1221(C)(1)(A). GEPA APPLIES TO ANY PROGRAM FOR WHICH AN EDUCATION AGENCY HEAD HAS ADMINISTRATIVE RESPONSIBILITY. 20 U.S.C. SEC. 1221(B). SINCE THE SECRETARY OF EDUCATION IS RESPONSIBLE FOR ADMINISTERING THE LSCA PROGRAMS, 20 U.S.C. SEC. 3441(A)(1), AND IS UNDER GEPA, "AN ADMINISTRATIVE HEAD OF AN EDUCATION AGENCY," 20 U.S.C. SEC. 1221E-3(D), THE GEPA PROVISION IN GENERAL WOULD APPLY TO THE LSCA PROGRAMS.

/2/ THE LSCA PROGRAMS ARE ADMINISTERED AND OPERATED BY STATE AND LOCAL LIBRARY AGENCIES AND NOT BY STATE AND LOCAL EDUCATIONAL AGENCIES. SEE 20 U.S.C. SEC. 351D.

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