B-97952, JUL. 5, 1957

B-97952: Jul 5, 1957

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TO BALTIMORE TECHNICAL INSTITUTE: FURTHER REFERENCE IS MADE TO YOUR LETTER OF MAY 29. THE RECORD SHOWS THAT THE INDEBTEDNESS IN QUESTION IS COMPRISED OF ITEMS OF OVERCHARGES BY YOUR SCHOOL FOR TRAINING VETERANS UNDER AUTHORITY OF TITLE II OF THE SERVICEMEN'S READJUSTMENT ACT OF 1944. FOLLOWING EXAMINATION OF SUCH BOOKS AND RECORDS AS WERE MADE AVAILABLE BY YOU. 000 WERE REPORTED. ADDITIONAL RECORDS WERE OBTAINED ONLY AFTER THE INVOCATION OF SUBPOENA AUTHORITY BY THE ADMINISTRATIVE OFFICE. 000 WERE QUESTIONED IN 1951 AND 1952. ALL OF THE QUESTIONED ITEMS WERE CONSOLIDATED AND LISTED UNDER CODES 1 TO 18. REQUESTED AND WAS GRANTED AN INTERVIEW BUT IT WAS NOT UNTIL OCTOBER 5. THE MATTER WAS REVIEWED WITH HIM IN DETAIL AND A LISTING OF THE ITEMS IN QUESTION WITH SUPPORTING WORK SHEETS WAS FURNISHED TO MR.

B-97952, JUL. 5, 1957

TO BALTIMORE TECHNICAL INSTITUTE:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF MAY 29, 1957, REQUESTING COMPLETE INFORMATION CONCERNING ACTION TAKEN TO LIQUIDATE YOUR INDEBTEDNESS TO THE UNITED STATES IN THE AMOUNT OF $34,422.57, AS SET OUT IN THE REMARKS QUOTED IN YOUR LETTER FROM PUBLIC VOUCHER FOR REFUNDS DATED MAY 21, 1957, COVERING PAYMENT OF $1,507.73 TO YOUR SCHOOL.

THE RECORD SHOWS THAT THE INDEBTEDNESS IN QUESTION IS COMPRISED OF ITEMS OF OVERCHARGES BY YOUR SCHOOL FOR TRAINING VETERANS UNDER AUTHORITY OF TITLE II OF THE SERVICEMEN'S READJUSTMENT ACT OF 1944, 58 STAT. 284, 287, AS AMENDED, ADMINISTERED BY THE VETERANS ADMINISTRATION. AS YOU WELL KNOW, THE MATTER OF THESE OVERCHARGES HAS BEEN THE SUBJECT OF CONTINUING CONFERENCES AND CORRESPONDENCE BETWEEN REPRESENTATIVES OF YOUR SCHOOL, THE VETERANS ADMINISTRATION, AND OUR OFFICE, SINCE THE LATTER PART OF 1950. FOLLOWING EXAMINATION OF SUCH BOOKS AND RECORDS AS WERE MADE AVAILABLE BY YOU, QUESTIONABLE ITEMS IN EXCESS OF $92,000 WERE REPORTED. ADDITIONAL RECORDS WERE OBTAINED ONLY AFTER THE INVOCATION OF SUBPOENA AUTHORITY BY THE ADMINISTRATIVE OFFICE. FURTHER ITEMS EXCEEDING A TOTAL OF $77,000 WERE QUESTIONED IN 1951 AND 1952, AND ALL OF THE QUESTIONED ITEMS WERE CONSOLIDATED AND LISTED UNDER CODES 1 TO 18, INCLUSIVE.

IN APRIL 1953 MR. NORMAN RAMSEY, OF SEMMES, BOWEN AND SEMMES, COUNSEL FOR YOUR SCHOOL, REQUESTED AND WAS GRANTED AN INTERVIEW BUT IT WAS NOT UNTIL OCTOBER 5, 1953, THAT MR. RAMSEY VISITED OUR OFFICE. THE MATTER WAS REVIEWED WITH HIM IN DETAIL AND A LISTING OF THE ITEMS IN QUESTION WITH SUPPORTING WORK SHEETS WAS FURNISHED TO MR. RAMSEY. AT THAT TIME HE AGREED TO CONTACT US FURTHER WHEN HE WAS READY TO MEET THE QUESTIONS PRESENTED. ANOTHER CONFERENCE WAS HELD WITH MR. RAMSEY ON NOVEMBER 24, 1954, AND ADDITIONAL DATA WAS FURNISHED TO HIM. BY LETTER DATED MARCH 17, 1955, MR. RAMSEY WAS ADVISED THAT IN THE ABSENCE OF FURTHER WORD FROM HIM IT WAS ASSUMED THAT HIS CONTENTIONS HAD BEEN ABANDONED, THAT IT WOULD BE NECESSARY TO PROCEED WITH A DETERMINATION OF THE MATTER AND THAT APPROPRIATE STEPS WOULD BE TAKEN TO EFFECT COLLECTION OF THE OVERCHARGES. WE THEREAFTER RECEIVED A LETTER DATED APRIL 12, 1955, FROM MR. RICHARD CASE, OF CLARK, SMITH AND PENDERGAST, STATING THAT HE AND MR. RAMSEY HAD BEEN WORKING TOGETHER ON THIS MATTER, THAT MR. RAMSEY WAS NO LONGER ASSOCIATED WITH HIM AND THAT HE WAS HANDLING IT ALONE. MR. CASE WAS FULLY INFORMED AS TO THE ITEMS QUESTIONED, INCLUDING INFORMATION PREVIOUSLY FURNISHED MR. RAMSEY THAT THE EVIDENCE OF RECORD SHOWED THAT TUITION PAYMENTS HAD BEEN MADE TO THE SCHOOL FOR THE PERIOD JULY 1, 1947, TO JUNE 30, 1948, AT A RATE WHICH HAD BEEN DETERMINED ON THE BASIS OF ERRONEOUS AND APPARENTLY FALSE COST DATA AND THAT SUCH PAYMENTS WERE, IN FACT, IN EXCESS OF THE MAXIMUM FIXED BY THE CONTROLLING STATUTES. NO FURTHER WORD WAS RECEIVED FROM MR. CASE.

YOU WERE BILLED BY THE VETERANS ADMINISTRATION FOR SOME OF THE QUESTIONABLE ITEMS AND PARTIAL COLLECTIONS WERE MADE ADMINISTRATIVELY BY DEDUCTIONS FROM AMOUNTS FOUND DUE YOUR SCHOOL, INCLUDING AMOUNTS CLAIMED BY YOU FOR ADMINISTRATIVE ALLOWANCES AUTHORIZED BY THE PROVISIONS OF PUBLIC LAW 550, 82D CONGRESS, SECTION 265 (B) 66 STAT. 663, AS AMENDED. IN AN EFFORT TO BRING THE MATTER TO A CONCLUSION WE ADVISED THE ADMINISTRATOR OF THE VETERANS ADMINISTRATION THAT, IN ADDITION TO THE OVERCHARGES ADMINISTRATIVELY DETERMINED FOR COLLECTION IN THE AMOUNT OF$19,871.05 (CONSISTING OF (1) ABSENCES FROM REGULAR CLASSES, $6,668.41 AND (2) ABSENCES BASED ON ERASURES ON ATTENDANCE RECORDS, $13,202.64), EXCESSIVE TUITION CHARGES PAID DURING THE PERIOD JULY 1, 1947, TO JUNE 30, 1948, AT A RATE OF 65 CENTS PER STUDENT HOUR SHOULD ALSO BE RECOVERED. THIS LATTER CONNECTION THE ADMINISTRATOR WAS INFORMED THAT A CAREFUL EXAMINATION BY REPRESENTATIVES OF OUR OFFICE HAD DISCLOSED THAT CONTRACTS COVERING THIS PERIOD PROVIDING FOR A RATE OF 65 CENTS PER STUDENT HOUR HAD NOT BEEN NEGOTIATED ON THE BASIS OF ACTUAL COST DATA AS REQUIRED BY THE APPLICABLE REGULATIONS. ATTENTION WAS INVITED ALSO TO THE FACT THAT THE STATUTORY MAXIMUM ALLOWABLE ON THE BASIS OF $500 FOR AN ORDINARY SCHOOL YEAR WAS EQUIVALENT TO A TUITION RATE OF ?398 PER STUDENT HOUR, OR 61.2 PERCENT OF THE CONTRACT RATE, WHICH WOULD REQUIRE THE RECOVERY OF 38.8 PERCENT OF THE TOTAL TUITION CHARGES PAID FOR THE PERIOD INVOLVED, SUBJECT TO ANY AMOUNTS PERTAINING TO STUDENTS' ABSENCES, ETC., THAT MAY HAVE BEEN RECOVERED ADMINISTRATIVELY. THE ADMINISTRATOR WAS ADVISED FURTHER IN THIS LETTER THAT ANY CLAIMS BY YOUR SCHOOL FOR ADDITIONAL COMPENSATION PAYABLE UNDER THE DECISION HANDED DOWN BY THE VETERANS' EDUCATION APPEALS BOARD, APRIL 23, 1954, DOCKET NO. 20, SHOULD BE FORWARDED TO OUR OFFICE FOR DIRECT SETTLEMENT. THE AMOUNT OF THE EXCESSIVE TUITION PAYMENTS WAS DETERMINED TO BE $29,069.21, COMPUTED AS FOLLOWS:

TABLE

TOTAL PAYMENTS TO THE SCHOOL FOR THE

PERIOD 7/1/47 TO 12/31/49---

$216,332.38 PERIOD 7/1/47 TO

6/30/48

(40.8 PERCENT OF TOTAL) $88,338.40

LESS OVERPAYMENTS:

RECOMPUTED CODE 2, ITEM (A) $5,075.70

PORTION OF OVERPAYMENTS OF

TUITION FOR THE PERIOD

PREVIOUSLY COLLECTED BY V.A. (*) 8,342.06

TOTAL OVERPAYMENTS 13,417.76

NET PAYMENTS OF TUITION FOR PERIOD $74,920.64

OVERCHARGE AT 38.8 PERCENT OF NET

TUITION PAID TO THE SCHOOL $29,069.21

(*) (TOTAL OVERPAYMENTS OF TUITION FOR PERIOD 7/1/47 TO 12/31/49, COLLECTED BY VETERANS ADMINISTRATION $20,446.22. ESTIMATED OVERPAYMENTS FOR PERIOD 7/1/47 TO 6/30/48, 40.8 PERCENT OF $20,446.22 OR $8,342.06.)

THUS, OVERCHARGES IN THE TOTAL AMOUNT OF $48,940.26 WERE FOR RECOVERY BY THE GOVERNMENT.

WE WERE SUBSEQUENTLY ADVISED BY THE VETERANS ADMINISTRATION THAT ALTHOUGH NO CLAIMS HAD BEEN RECEIVED FROM YOUR SCHOOL IT HAD BEEN DETERMINED THAT THE SUM OF $36,284.08 WOULD BE PAYABLE UNDER THE BOARD'S DECISION, DOCKET NO. 20. WE WERE ALSO ADVISED THAT A BILL FOR COLLECTION IN THE AMOUNT OF $19,871.05, HAD BEEN SENT TO YOU COVERING OVERCHARGES FOR ABSENCES FROM REGULAR CLASSES AMOUNTING TO $6,668.41 AND ERASURES ON ATTENDANCE RECORDS AMOUNTING TO $13,202.64, AND THAT $1,219.03 OF THIS AMOUNT HAD BEEN COLLECTED BY SET OFF, LEAVING AN OUTSTANDING BALANCE OF $18,652.02 DUE UNDER THIS BILL FOR COLLECTION. WE ADVISED THE VETERANS ADMINISTRATION BY LETTER DATED OCTOBER 18, 1956, THAT ADDITIONAL TUITION FOUND DUE UNDER THE BOARD'S DECISION, DOCKET 20, HAD BEEN APPLIED AS A SET OFF AGAINST THE OVERCHARGES PAID TO YOUR SCHOOL. CERTIFICATE NO. 2278430 OF THE SAME DATE, REFERRED TO BY THE FINANCE OFFICER IN THE REMARKS QUOTED IN YOUR LETTER OF MAY 29, 1957, WAS MERELY NOTICE TO HIM OF SUCH ACTION.

THEREAFTER BY LETTER DATED MARCH 8, 1957, THE FINANCE OFFICER ADVISED US THAT YOU HAD SUBMITTED FIVE CLAIMS TOTALING $37,382.80 FOR ADDITIONAL CHARGES PAYABLE UNDER THE BOARD'S DECISION, DOCKET NO. 20, AND REQUESTED INFORMATION CONCERNING THEIR DISPOSITION. HE WAS ADVISED BY OUR LETTER OF APRIL 4, 1957, TO FORWARD THE CLAIMS HERE FOR CONSIDERATION AS PREVIOUSLY REQUESTED AND THE CLAIMS WERE RECEIVED IN OUR OFFICE APRIL 26, 1957. STATEMENT OF SETTLEMENT OF CLAIM, CERTIFICATE NO. 2284160, WAS ISSUED MAY 10, 1957, AND A COPY WAS MAILED TO YOU. UNDER THIS STATEMENT OF SETTLEMENT YOUR CLAIMS AMOUNTING TO $37,382.80 (LESS ADMINISTRATIVE SUSPENSIONS AMOUNTING TO $1,329.26 WHICH WERE FULLY EXPLAINED TO YOU IN ADMINISTRATIVE LETTER DATED APRIL 3, 1957) WERE ALLOWED IN THE NET AMOUNT OF $36,053.54. THE SUM OF $1,219.03 CLAIMED ON ACCOUNT OF ADMINISTRATIVE ALLOWANCES UNDER PUBLIC LAW 550 WAS ALSO ALLOWED (PER REPORTED ADMINISTRATIVE SET OFF) MAKING A TOTAL ALLOWANCE OF $37,272.57. FROM THIS AMOUNT THE SUM OF $35,641.60 WAS DEDUCTED ON ACCOUNT OF TWO ITEMS OF OVERCHARGES NOT COLLECTED ADMINISTRATIVELY, LEAVING A BALANCE OF $1,630.97. IN OTHER WORDS, THE NET AMOUNT SET OFF WAS $34,422.57 ($35,641.60 LESS $1,219.03 ADMINISTRATIVELY WITHHELD). FOLLOWING IS AN ITEMIZATION OF THE OVERCHARGES SET OFF:

TABLE (1) ABSENCES FROM REGULAR CLASSES ADMINISTRATIVELY

DETERMINED TO BE $6,668.41 AND ON REVIEW REVISED TO:

(A) ABSENCES FOR THE PERIOD JULY 1, 1947 TO JUNE 30, 1948 $5,075.70

(B) DO. DO. DO. DO. JULY 1, 1948 TO DEC. 31, 1949 $1,496.69

TOTAL $6,572.39 (2) EXCESSIVE TUITION PAYMENTS BASED ON ERRONEOUS COST DATA

FOR PERIOD JULY 1, 1947, TO JUNE 30, 1948, AMOUNTING TO

$29,069.21 COMPUTED AS STATED ABOVE.

TOTAL $35,641.60

THE ITEM OF $13,202.64 REPRESENTING OVERCHARGES BASED ON ERASURES ON ATTENDANCE RECORDS INCLUDED IN THE ADMINISTRATIVE BILL FOR COLLECTION IS RECEIVING FURTHER CONSIDERATION.

INFORMATION CONCERNING YOUR CLAIMS FOR THE ADMINISTRATIVE ALLOWANCES INVOLVED HAS BEEN FURNISHED TO YOU BY THE VETERANS ADMINISTRATION AS INDICATED BY PUBLIC VOUCHER FOR REFUNDS (BV8768) SHOWING A TOTAL OF $2,276.76 CLAIMED, THE SUM OF $1,219.03 ALLOWED AS A CREDIT UNDER OUR SETTLEMENT OF MAY 10, 1957, AS STATED ABOVE, AND A BALANCE DUE OF $1,507.73 WHICH WE HAVE BEEN ADVISED HAS SINCE BEEN PAID TO YOU. FURTHER DETAILED INFORMATION IS ATTACHED.

ADVICE HAS NOW BEEN RECEIVED FROM THE FINANCE OFFICER OF THE VETERANS ADMINISTRATION REGIONAL OFFICE AT BALTIMORE THAT YOU HAVE RECLAIMED THE SUM OF $1,287.39 ADMINISTRATIVELY SUSPENDED FROM THE AMOUNT YOU ALLEGED TO BE DUE UNDER THE BOARD'S DECISION, DOCKET 20, AND THAT THE RECLAIMS HAVE BEEN CERTIFIED IN THE AMOUNT OF $1,228.99 AND WILL BE FORWARDED TO OUR OFFICE FOR SETTLEMENT, AS YOU WERE ADVISED BY LETTER DATED JUNE 27, 1957. WHEN THESE RECLAIMS ARE RECEIVED HERE THEY WILL BE GIVEN PROMPT CONSIDERATION.