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TO WALTER AND HAVERFIELD: REFERENCE IS MADE TO YOUR LETTER OF FEBRUARY 3. THAT THE INSTITUTION WAS REQUIRED TO FURNISH THE TOOLS AND BOOKS AT COST TO THE INSTITUTION. WHEREUPON THE AMOUNT ADMINISTRATIVELY FOUND TO HAVE BEEN ERRONEOUSLY PAID TO THE INSTITUTION IN EXCESS OF SUCH COSTS WAS RECOVERED BY THE VETERANS ADMINISTRATION. AN APPEAL FROM THIS DETERMINATION AND ACTION WAS FILED BY THE INSTITUTION WITH THE VETERANS' EDUCATION APPEALS BOARD ESTABLISHED UNDER THE VETERANS' EDUCATION AND TRAINING AMENDMENTS OF 1950. THE INSTITUTION'S PETITION FOR REHEARING WAS DENIED BY ORDER OF THE BOARD DATED JULY 15. WHICH WERE REVIEWED AND CONSIDERED DURING THE EXTENSIVE HEARINGS CONDUCTED ON THE APPEAL.

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B-124499, JUN. 19, 1956

TO WALTER AND HAVERFIELD:

REFERENCE IS MADE TO YOUR LETTER OF FEBRUARY 3, 1955, PRESENTING A CLAIM ON BEHALF OF THE AUTO MECHANICS SCHOOL OF PITTSBURGH, PITTSBURGH, PENNSYLVANIA, IN THE AMOUNT OF $30,863.48 ALLEGED TO BE DUE FOR TOOLS AND BOOKS FURNISHED TO VETERANS ENROLLED FOR TRAINING IN THE INSTITUTION UNDER CONTRACTS V3011V-250 AND V3011V-353 AUTHORIZED BY TITLE II OF THE SERVICEMEN'S READJUSTMENT ACT OF 1944, PUBLIC LAW 346, 78TH CONGRESS, 58 STAT. 284, 287.

AS SET FORTH IN YOUR LETTER AND CONSIDERED IN SEVERAL CONFERENCES WITH REPRESENTATIVES OF OUR OFFICE, THIS CLAIM STEMS OUT OF A DETERMINATION BY THE ADMINISTRATOR OF VETERANS AFFAIRS DATED MARCH 31, 1951, THAT THE INSTITUTION WAS REQUIRED TO FURNISH THE TOOLS AND BOOKS AT COST TO THE INSTITUTION, WHEREUPON THE AMOUNT ADMINISTRATIVELY FOUND TO HAVE BEEN ERRONEOUSLY PAID TO THE INSTITUTION IN EXCESS OF SUCH COSTS WAS RECOVERED BY THE VETERANS ADMINISTRATION. THEREAFTER, AN APPEAL FROM THIS DETERMINATION AND ACTION WAS FILED BY THE INSTITUTION WITH THE VETERANS' EDUCATION APPEALS BOARD ESTABLISHED UNDER THE VETERANS' EDUCATION AND TRAINING AMENDMENTS OF 1950, PUBLIC LAW 610, 81ST CONGRESS, 64 STAT. 336, GRANTING THE BOARD REVIEW AUTHORITY AND PROVIDING THAT ITS DECISION "WITH RESPECT TO ALL MATTERS SHALL CONSTITUTE THE FINAL ADMINISTRATIVE DETERMINATION.' THE BOARD RENDERED ITS FINAL DECISION MAY 22, 1953, DOCKET NO. 192, AND THE INSTITUTION'S PETITION FOR REHEARING WAS DENIED BY ORDER OF THE BOARD DATED JULY 15, 1953.

THE QUESTIONS AT ISSUE, WHICH WERE REVIEWED AND CONSIDERED DURING THE EXTENSIVE HEARINGS CONDUCTED ON THE APPEAL, ARE INDICATED BY THE FINDINGS MADE BY THE BOARD SUMMARIZED AS FOLLOWS:

(1) THAT THE INSTITUTION HAD NOT ACQUIRED A CUSTOMARY CHARGE FOR TOOLS AND BOOKS;

(2) THAT THE ADMINISTRATOR HAD CORRECTLY DETERMINED THAT THE INSTITUTION WAS ENTITLED ONLY TO THE COST TO IT OF TOOLS AND BOOKS FURNISHED DURING THE PERIOD INVOLVED; AND

(3) THAT THE ADMINISTRATOR HAD IMPROPERLY DETERMINED THAT THE INSTITUTION HAD ACQUIRED A CUSTOMARY CHARGE FOR TUITION FOR THE PERIOD SUBSEQUENT TO MARCH 31, 1950, THE EXPIRATION DATE OF THE SECOND CONTRACT, POINTING OUT THAT THE PAYMENTS AFTER SUCH DATE MADE AS A CUSTOMARY CHARGE AT A RATE OF $42.35 PER MONTH WERE CONTRARY TO LAW, SINCE $37.84 PER MONTH HAD ALREADY BEEN DETERMINED TO BE PAYABLE AS THE FAIR AND REASONABLE RATE.

YOUR BASIC CONTENTION, WHICH WAS UNSUCCESSFULLY URGED BEFORE THE BOARD, IS THAT THE INSTITUTION HAD ACQUIRED AN ESTABLISHED CUSTOMARY CHARGE FOR TOOLS AND BOOKS, AS WELL AS FOR TUITION, BY VIRTUE OF THE PROVISIONS OF PUBLIC LAW 610, SUPRA. IN REJECTING THIS CONTENTION, THE BOARD FOLLOWED WHAT IS POPULARLY REFERRED TO AS THE PIERCE DOCTRINE, CONSIDERED AND APPROVED IN OUR DECISIONS B-110696, AUGUST 26, 1952, AND B-117981, JUNE 29, 1954, COPIES ATTACHED. THERE BEING NO ESTABLISHED CUSTOMARY CHARGES FOR TOOLS AND BOOKS, THE BOARD UPHELD THE ADMINISTRATIVE DETERMINATION THAT PAYMENTS FOR SUCH SUPPLIES HAD BEEN ERRONEOUSLY MADE IN CONTRAVENTION OF THE APPLICABLE REGULATIONS, AS WELL AS THE ADMINISTRATIVE ACTION REQUIRING THE INSTITUTION TO ACCOUNT FOR THE RESULTING OVERPAYMENTS. CONCLUDED BY THE BOARD, THIS DETERMINATION ACCORDS WITH THE WELL- ESTABLISHED PRINCIPLE, CONSISTENTLY FOLLOWED BY ADMINISTRATIVE AND ACCOUNTING OFFICERS, THAT THE GOVERNMENT, INDEPENDENTLY OF STATUTE, MAY RECOVER FUNDS WHICH ITS AGENTS HAVE WRONGFULLY, ERRONEOUSLY, OR ILLEGALLY PAID. IN ADDITION TO THE AUTHORITIES CITED IN THE BOARD'S DECISION, SEE CARROLL VOCATIONAL INSTITUTE V. UNITED STATES, 211 F.2D 539, 541, WHERE THE COURT STATED, AS FOLLOWS:

"THE ADMINISTRATOR'S RESPONSIBILITY REGARDING THE DISBURSEMENTS OF LARGE AMOUNTS OF MONEYS INCLUDES NOT ONLY THE TASK OF ASCERTAINING SO FAR AS POSSIBLE THAT ALL AMOUNTS DISBURSED ARE PROPERLY PAYABLE, BUT THE RESPONSIBILITY OF ASCERTAINING ANY AMOUNTS WHICH HAVE BEEN OVERPAID IN THE PAST, AND THE TAKING OF ALL ADMINISTRATIVE STEPS TO RECOUP SUCH OVERPAYMENTS.'

SEE ALSO MCSWEENEY TRADE SCHOOL V. UNITED STATES, DECIDED BY THE COURT OF CLAIMS JANUARY 11, 1955, 131 C.CLS. 445, WHERE THE PERTINENT REGULATION WAS CONSIDERED AND APPLIED AND AN ADJUSTMENT WAS MADE SIMILAR TO THE ONE APPROVED BY THE BOARD IN THIS CASE. FURTHERMORE, THE VETERANS ADMINISTRATION HAS RECENTLY SUBMITTED A SCHEDULE OF OVERPAYMENTS, COPY ENCLOSED, WHICH SHOWS THAT THERE REMAINS OUTSTANDING AND DUE THE UNITED STATES FROM THE INSTITUTION THE SUM OF $46,256.74 ON ACCOUNT OF EXCESSIVE TUITION CHARGES PAID AT THE RATE OF $42.35 PER MONTH DURING THE PERIOD THE FAIR AND REASONABLE RATE OF $37.84 PER MONTH PROPERLY SHOULD HAVE BEEN PAID, AS DETERMINED BY THE BOARD.

FROM A CAREFUL CONSIDERATION OF THE FACTS AND CIRCUMSTANCES OF THIS CASE, IT IS OUR VIEW THAT THE FINDINGS AND CONCLUSIONS OF THE BOARD ARE CONSISTENT WITH THE PURPOSE AND INTENT OF THE GOVERNING STATUTES AND REPRESENT A JUST AND REASONABLE DETERMINATION OF THE QUESTIONS PRESENTED. HENCE, PAYMENT OF THE AMOUNT NOW CLAIMED BY THE INSTITUTION MAY NOT BE ALLOWED AND, INASMUCH AS THE ADMINISTRATIVE AGENCY HAS NOT TAKEN THE STEPS NECESSARY TO EFFECT RECOVERY OF THE EXCESSIVE TUITION CHARGES, IT IS REQUESTED THAT THE INSTITUTION FORWARD TO OUR OFFICE ITS CHECK IN THE AMOUNT OF $46,256.74 MADE PAYABLE TO THE TREASURER OF THE UNITED STATES TO COVER THE REPORTED OVERPAYMENTS OR THAT ADVICE BE FURNISHED ARRANGING FOR THE REQUIRED ADJUSTMENT. IN THE EVENT WORD IS NOT RECEIVED FROM YOU WITHIN THE NEXT 30 DAYS, THE MATTER WILL BE TRANSMITTED TO THE ATTORNEY GENERAL OF THE UNITED STATES FOR CONSIDERATION AND APPROPRIATE ACTION.

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