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than five years before the recipient re (1) The identity of the initial deciceived the notice of the disallowance sion for which review is sought; and decision.
(2) A statement of the reasons as(Authority: 20 U.S.C. 1221e-3, 1234(1)(1),
serted by the party for affirming, modi1234a(b)(3), 1234b(b)(1), and 3474(a))
fying, setting aside, or remanding the
initial decision in whole or in part. [54 FR 19512, May 5, 1989. Redesignated and
(f)(1) A party may respond to a petiamended at 58 FR 43473, Aug. 16, 1993)
tion for review of an initial decision by $81.41 Initial decision.
filing a statement of its views on the
issues raised in the petition with the (a) The ALJ makes an initial deci Secretary, as provided for in this secsion based on the record.
tion, not later than 15 days after the (b) The initial decision includes the date it receives the petition. ALJ's findings of fact, conclusions of (2) A party shall serve a copy of its law, and reasoning on all material statement of views on the other party issues.
by hand delivery or mail, and shall cer(c) The initial decision is transmitted tify that it has done so pursuant to the to the Secretary by hand-delivery or provisions of paragraph (d) of this secDepartment mail, and to the parties by tion. If agreed upon by the parties, certified mail, return receipt re- service of a copy of the statement of quested, by the Office of Administra views may be made upon the other tive Law Judges.
party by facsimile transmission. (d) For the purpose of this part, "ini (g)(1) The filing date for written subtial decision" includes an ALJ's modi missions under this section is the date fied decision after the Secretary's re the document ismand of a case.
(i) Hand delivered; (Authority: 5 U.S.C. 557(c); 20 U.S.C 1221e-3,
(ii) Mailed; or 1234(f)(1), and 3474(a))
(iii) Sent by facsimile transmission.
(2) If a scheduled filing date falls on (54 FR 19512, May 5, 1989. Redesignated and
a Saturday, Sunday or a Federal holiamended at 58 FR 43473, 43474, Aug. 16, 1993)
day, the filing deadline is the next $81.42 Petition for review of initial de
business day. cision.
(Authority: 20 U.S.C. 1221e-3, 1234(1)(1), (a) If a party seeks to obtain the Sec
1234a(e), and 3474(a)) retary's review of the initial decision [58 FR 43474, Aug. 16, 1993) of an ALJ, the party shall file a petition for review with the Office of Hear 881.43 Review by the Secretary. ings and Appeals, which immediately (a)(1) The Secretary's review of an forwards the petition to the Office of initial decision is based on the record the Secretary
of the case, the initial decision, and (b) A party shall file a petition for re any proper submissions of the parties view not later than 30 days after the or other participants in the case. date it receives the initial decision. (2) During the Secretary's review of
(c) If a party files a petition for re the initial decision there shall not be view, the party shall serve a copy of any ex parte contact between the Secthe petition on the other party on the retary and individuals representing the filing date by hand delivery or by Department or the recipient. "overnight or express” mail. If agreed (b) The ALJ's findings of fact, if supupon by the parties, service of a copy ported by substantial evidence, are of the petition may be made upon the conclusive. other party by facsimile transmission. (c) The Secretary may affirm, mod
(d) Any written submission to the ify, set aside, or remand the ALJ's iniSecretary under this section must be tial decision. accompanied by a statement certifying (1) If the Secretary modifies, sets the date that the filed material was aside, or remands an initial decision, in served on the other party.
whole or in part, the Secretary's deci(e) A petition for review of an initial sion includes a statement of reasons decision must contain
that supports the Secretary's decision.
(2)(i) The Secretary may remand the $81.45 Collection of claims. case to the ALJ with instructions to
(a) An authorized Departmental offimake additional findings of fact or
cial collects a claim established under conclusions of law, or both, based on
this subpart by using the standards and the evidence of record. The Secretary
procedures in 34 CFR part 30. may also remand the case to the ALJ
(b) A claim established under this for further briefing or for clarification
subpart may be collectedor revision of the initial decision.
(1) 30 days after a recipient receives (ii) If a case is remanded, the ALJ notice of a disallowance decision if the shall make new or modified findings of recipient fails to file an acceptable apfact or conclusions of law or otherwise plication for review under $81.37; or modify the initial decision in accord (2) On the date of the final decision of ance with the Secretary's remand the Department under $81.44 if the reorder.
cipient obtains review of a disallor(iii) A party may appeal a modified ance decision. decision of the ALJ under the provi
(c) The Department takes no collecsions of 88 81.42 through 81.45. However,
tion action pending judicial review of a upon that review, the ALJ's new or
final decision of the Department under modified findings, if supported by sub
section 458 of GEPA. stantial evidence, are conclusive.
(d) If a recipient obtains review of a (3) The Secretary, for good cause
disallowance decision under $81.38, the
Department does not collect interest shown, may remand the case to the
on the claim for the period between the ALJ to take further evidence, and the
date of the disallowance decision and ALJ may make new or modified find
the date of the final decision of the Deings of fact and may modify the initial decision based on that new evidence.
partment under $81.44. These new or modified findings of fact (Authority: 20 U.S.C. 1234(1)(1); 1234a()(1) and are likewise conclusive if supported by
(2), (i), and (1)) substantial evidence.
(54 FR 19512, May 5, 1989. Redesignated and
amended at 58 FR 43473, Aug. 16, 1993) (Authority: 5 U.S.C. 557(b); 20 U.S.C. 1221e3, 1234(f)(1), 1234a(d), and 3474(a))
APPENDIX TO PART 81—ILLUSTRATIONS (58 FR 43474, Aug. 16, 1993, as amended at 60'
OF PROPORTIONALITY FR 46494, Sept. 6, 1995)
(1) Ineligible beneficiaries. A State uses 15
percent of its grant to meet the special edu881.44 Final decision of the Depart
cational needs of children who were migrament.
tory, but who have not migrated for more (a) The ALJ's initial decision be
than five years as a Federal program statute comes the final decision of the Depart
requires for eligibility to participate in the
program. Result: Recovery of 15 percent of ment 60 days after the recipient re
the grant-all program funds spent for the ceives the ALJ's decision unless the
benefit of those children. Although the servSecretary modifies, sets aside, or re ices were authorized, the children were not mands the decision during the 60-day eligible to receive them. period.
(2) Ineligible beneficiaries. A Federal pro(b) If the Secretary modifies or sets
gram designed to meet the special edu
cational needs of gifted and talented chilaside the ALJ's initial decision, a copy
dren requires that at least 80 percent of the of the Secretary's decision is sent by
children served in any project must be identhe Office of Hearings and Appeals to tified as gifted or talented. A local eduthe parties by certified mail, return re cational agency (LEA) conducts a project in ceipt requested. The Secretary's deci- which 76 students are identified as gifted or sion becomes the final decision of the
talented and 24 are not. The project was de Department on the date the recipient
signed and implemented to meet the special
educational needs of gifted and talented stureceives the Secretary's decision.
dents. Result: The LEA must return five per(Authority: 20 U.S.C. 1221e-3, 1234(f)(1),
cent of the project costs. The LEA provided
authorized services for a project in which the 1234a(g), and 3474(a))
76 target students had to constitute at least (54 FR 19512, May 5, 1989. Redesignated and 80 percent of the total. Thus, the maximum amended at 58 FR 43473, 43474, Aug. 16, 1993) number of non-target students permitted
was 19. Project costs relating to the remaining five students must be returned.
(3) Ineligible beneficiaries. Same as the example in paragraph (2), except that only 15 percent of the children were identified as gifted or talented. On the basis of the low percentage of these children and other evidence, the authorized Departmental official finds that the project as a whole did not address their special educational needs and was outside the purpose of the statute. Result: The LEA must return its entire award. The difference between the required percentage of gifted and talented children and the percentage actually enrolled is so substantial that, if consistent with other evidence, the official may reasonably conclude the entire grant was misused.
(4) Ineligible beneficiaries. Same as the example in paragraph (2), except that 60 percent of the children were identified as gifted or talented, and it is not clear whether the project was designed or implemented to meet the special educational needs of these children. Result: If it is determined that the project was designed and implemented to serve their special educational needs, the LEA must return 25 percent of the project costs. A project that included 60 target children would meet the requirement that 80 percent of the children served be gifted and talented if it included no more than 15 other children. Thus, while the LEA provided authorized services, only 75 percent of the beneficiaries were authorized to participate in the project (60 target children and 15 others). If the authorized Departmental official, after examining all the relevant facts, determines that the project was not designed and implemented to serve the special educational needs of gifted or talented students, the LEA must return its entire award because it did not provide services authorized by the statute.
(5) Unauthorized activities. An LEA uses ten percent of its grant under a Federal program that authorizes activities only to meet the special educational needs of educationally deprived children to pay for health services that are available to all children in the LEA. All the children who use the Federally funded health services happen to be educationally deprived, and thus eligible to receive program services. Result: Recovery of ten percent of the grant-all program funds spent for the health services. Although the children were eligible to receive program services, the health services were unrelated to a special educational need and, therefore, not authorized by law.
(6) Set-aside requirement. A State uses 22 percent of its grant for one fiscal year under a Federal adult education program to provide programs of equivalency to a certificate of graduation from a secondary school. The adult education program statute restricts those programs to no more than 20 percent of
the State's grant. Result: Two percent of the State's grant must be returned. Although all 22 percent of the funds supported adult education, the State had no authority to spend more than 20 percent on secondary school equivalency programs.
(7) Set-aside requirement. A State uses eight percent of its basic State grant under a Federal vocational education program to pay for the excess cost of vocational education seryices and activities for handicapped individuals. The program statute requires a State to use ten percent of its basic State grant for this purpose. Result: The State must return two percent of its basic State grant, regardless of how it was used. Because the State was required to spend that two percent on services and activities for handicapped individuals and did not do so, it diverted those funds from their intended purposes, and the Federal interest was harmed to that extent.
(8) Excess cost requirement. An LEA uses funds reserved for the disadvantaged under a Federal vocational education program to pay for the cost of the same vocational education services it provides to non-disadvantaged individuals. The program statute requires that funds reserved for the disadvantaged must be used to pay only for the supplemental or additional costs of vocational education services that are not provided to other individuals and that are required for disadvantaged individuals to participate in vocational education. Result: All the funds spent on the disadvantaged must be returned. Although the funds were spent to serve the disadvantaged, the funds were available to pay for only the supplemental or additional costs of providing services to the disadvantaged.
(9) Maintenance-of-effort requirement. An LEA participates in a Federal program in fiscal year 1988 that requires it to maintain its expenditures from non-Federal sources for program purposes to receive its full allotment. The program statute requires that non-Federal funds expended in the first preceding fiscal year must be at least 90 percent of non-Federal funds expended in the second preceding fiscal year and provides for a reduction in grant amount proportional to the shortfall in expenditures. No waiver of the requirement is authorized. In fiscal year 1986 the LEA spent $100,000 from non-Federal sources for program purposes; in fiscal year 1987, only $87,000. Result: The LEA must return 1/30 of its fiscal year 1988 grant-the amount of its grant that equals the proportion of its shortfall ($3,000) to the required level of expenditures ($90,000). If, instead, the statute made maintenance of expenditures a clear condition of the LEA's eligibility to receive funds and did not provide for a proportional reduction in the grant award, the LEA would be required to return its entire grant.
(10) Supplanting prohibition. An LEA uses funds under a Federal drug education program to provide drug abuse prevention counseling to students in the eighth grade. The LEA is required to provide that same counseling under State law. Funds under the Federal program statute are subject to a supplement-not-supplant requirement. Result: All the funds used to provide the required counseling to the eighth-grade students must be returned. The Federal funds did not increase the total amount of spending for program purposes because the counseling would have been provided with non-Federal funds if the Federal funds were not available.
(11) Matching requirement. A State receives an allotment of $90,000 for fiscal year 1988 under a Federal adult education program. It expends its full allotment and $8,000 from its own resources for adult education. Under the Federal statute, the Federal share of expenditures for the State's program is 90 percent. Result: The State must return the unmatched Federal funds, or $18,000. Expenditure of a $90,000 Federal allotment required $10,000 in matching State expenditures, $2,000 more than the State's actual expenditures. At a ratio of one State dollar for every nine Federal dollars, $18,000 in Federal funds were unmatched.
(12) Application requirements. In order to receive funds under a Federal program that supports a wide range of activities designed to improve the quality of elementary and secondary education, an LEA submits an application to its State educational agency (SEA) for a subgrant to carry out schoollevel basic skills development programs. The LEA submits its application after conducting an assessment of the needs of its students in consultation with parents, teachers, community leaders, and interested members of the general public. The Federal program statute requires the application and consultation processes. The SEA reviews the LEA's application, determines that the proposed programs are sound and the application is in compliance with Federal law, and approves the application. After the LEA receives the subgrant, it unilaterally decides to use 20 percent of the funds for gifted and talented elementary school students-an authorized activity under the Federal statute. However, the LEA does not consult with interested parties and does not amend its application. Result: 20 percent of the LEA's subgrant must be returned. The LEA had no legal authority to use Federal funds for programs or activities other than those described in its approved application, and its actions with respect to 20 percent of the subgrant not only impaired the integrity of the application process, but caused significant harm to other Federal interests associated with the program as follows: the required planning process was circumvented because the LEA did not consult with the
specified local interests; program accountability was impaired because neither the SEA nor the various local interests that were to be consulted had an opportunity to review and comment on the merits of the gifted and talented program activities, and the LEA never had to justify those activities to them; and fiscal accountability was impaired because the SEA and those various local interests were, in effect, misled by the LEA's unamended application regarding the expenditure of Federal funds.
(13) Harmless violation. Under a Federal program, a grantee is required to establish a 15member advisory council of affected teachers, school administrators, parents, and students to assist in program design, monitoring, and evaluation. Although the law requires at least three student members of the council, a grantee's council contains only two. The project is carried out, and no damage to the project attributable to the lack of a third student member can be identified. Result: No financial recovery is required, although the grantee must take other appropriate steps to come into compliance with the law. The grantee's violation has not measurably harmed a Federal interest associated with the program. (Authority: 20 U.S.C. 1221e-3, 1234(f(1), 1234b(a), and 3474(a)) (54 FR 19512, May 5, 1989; 54 FR 21622, May 19, 1989)
PART 82-NEW RESTRICTIONS ON
Subpart B-Activities by Own Employees 82.200 Agency and legislative liaison. 82.205 Professional and technical services. 82.210 Reporting. Subpart C-Activities by Other Than Own
82.300 Professional and technical services.
Subpart D-Penalties and Enforcement
Subpart E-Exemptions 82.500 Secretary of Defense.
Subpart F-Agency Reports
providing for the United States to in82.600 Semi-annual compilation.
sure or guarantee a loan shall file with 82.605 Inspector General report.
that agency a statement, set forth in APPENDIX A TO PART 82-CERTIFICATION RE
appendix A, whether that person has
made or has agreed to make any payGARDING LOBBYING APPENDIX B TO PART 82-DISCLOSURE FORM
ment to influence or attempt to influTO REPORT LOBBYING
ence an officer or employee of any
agency, a Member of Congress, an offiAUTHORITY: Section 319, Pub. L. 101-121 (31 U.S.C. 1352); 20 U.S.C. 3474.
cer or employee of Congress, or an em
ployee of a Member of Congress in conCROSS REFERENCE: See also Office of Man
nection with that loan insurance or agement and Budget notice published at 54 FR 52306, December 20, 1989.
(e) Each person who requests or reSOURCE: 55 FR 6737, 6752, Feb. 26, 1990, un
ceives from an agency a commitment less otherwise noted.
providing for the United States to in
sure or guarantee a loan shall file with Subpart A-General
that agency a disclosure form, set forth
in appendix B, if that person has made 882.100 Conditions on use of funds.
or has agreed to make any payment to (a) No appropriated funds may be ex influence or attempt to influence an ofpended by the recipient of a Federal ficer or employee of any agency, a contract, grant, loan, or cooperative Member of Congress, an officer or emageement to pay any person for influ ployee of Congress, or an employee of a encing or attempting to influence an Member of Congress in connection with officer or employee of any agency, a that loan insurance or guarantee. Member of Congress, an officer or employee of Congress, or an employee of a
8 82.105 Definitions. Member of Congress in connection with
For purposes of this part: any of the following covered Federal
(a) Agency, as defined in 5 U.S.C. actions: the awarding of any Federal
552(f), includes Federal executive decontract, the making of any Federal
partments and agencies as well as indegrant, the making of any Federal loan,
pendent regulatory commissions and the entering into of any cooperative
Government corporations, as defined in agreement, and the extension, continu
31 U.S.C. 9101(1). ation, renewal, amendment, or modi
(b) Covered Federal action means any fication of any Federal contract, grant,
of the following Federal actions: loan, or cooperative agreement. (b) Each person who requests or re
(1) The awarding of any Federal con
tract; ceives from an agency a Federal contract, grant, loan, or cooperative
(2) The making of any Federal grant; agreement shall file with that agency a
(3) The making of any Federal loan; certification, set forth in appendix A,
(4) The entering into of any cooperathat the person has not made, and will
tive agreement; and, not make, any payment prohibited by
(5) The extension, continuation, reparagraph (a) of this section.
newal, amendment, or modification of (c) Each person who requests or re
any Federal contract, grant, loan, or ceives from an agency a Federal con cooperative agreement. tract, grant, loan, or a cooperative Covered Federal action does not inagreement shall file with that agency à clude receiving from an agency a comdisclosure form, set forth in appendix mitment providing for the United B, if such person has made or has States to insure or guarantee a loan. agreed to make any payment using Loan guarantees and loan insurance nonappropriated funds (to include prof are addressed independently within its from any covered Federal action), this part. which would be prohibited under para (c) Federal contract means an acquisigraph (a) of this section if paid for with tion contract awarded by an agency, appropriated funds.
including those subject to the Federal (d) Each person who requests or re- Acquisition Regulation (FAR), and any ceives from an agency a commitment other acquisition contract for real or