Both Midwest and Respondent, the Department of Labor, filed exceptions to the ALJ's decision. We asserted jurisdiction in an Order issued October 23, 1998. We find that the ALJ's decision is moot, vacate it, and dismiss the complaints.

1. Regulatory Scheme

   Competitions for grants under JTPA Section 402, providing funds for training migrant and seasonal workers, are conducted every two years. 29 U.S.C. §1672(c)(2). The applicable regulations are found at 20 C.F.R. §633.201 through §633.205.

   Not all geographic areas are open to competition every two years. The JTPA provides, at 29 U.S.C. §1672(c)(2):

The competition for grants under this section shall be conducted every two years, except that if a recipient of such a grant has performed satisfactorily under the terms of the existing grant agreement, the Secretary may waive the requirement for such competition upon receipt from the recipient of a satisfactory two-year program plan for the succeeding two-year grant period.

Thus, at the discretion of the Secretary, an incumbent grantee with a successful record of performance may be eligible for a new grant without making a competitive application.

   Applicants who intend to apply for the grant must file a Preapplication for Federal Assistance pursuant to 20 C.F.R. §633.202(b). The Department conducts a "responsibility review" to determine whether the applicant has established overall responsibility to administer federal funds. 20 C.F.R. §633.204.

   The Department also reviews the applications under the criteria listed at 20 C.F.R. §633.203, one of which is "a familiarity with the area to be served." 20 C.F.R. §633.203(b). The reviewers recommend to the Grant Officer which applicant should be awarded the grant. The Grant Officer reviews the recommendations and makes an independent determination that the recommendations are correct. Grants are awarded only to applicants that have been found to be financially responsible. 20 C.F.R. §633.204(b).

   The Grant Officer notifies unsuccessful applicants in writing. 20 C.F.R. §633.205(c). An unsuccessful applicant may request an administrative review before an ALJ for a determination "with respect to whether there is a basis in the record to support the Department's decision." 20 C.F.R. §633.205(e). However, the review does not interfere with the funding of the selected applicant. Id. Under such review, the only remedy that may be awarded to a successful complainant is "the right to be designated [grantee] in the future rather than a retroactive or immediately effective selection status." Id. The regulation goes on to state that toward the end of the funding period there will not be such a future designation:

Therefore, in the event the ALJ rules that the organization should have been selected and the organization continues to meet the requirements of this part, the Department will select and fund the organization within 90 days of the ALJ's decision unless the end of the 90 day period is within 6 months of the end of the funding period.

20 C.F.R. §633.205(e) (emphasis added).

2. These Cases

   Midwest was the long term incumbent grantee of JTPA Section 402 training funds for the three states, including the time the grants were competed in 1997. Beginning in 1995, the Department received reports from Midwest employees of personnel abuses, including coercion to make donations. Transcript of Hearing (T.) at 26. The Department's Office of Inspector General (OIG) investigated the allegations. D&O at 4. Notwithstanding the Department's earlier notification to Midwest that coerced fund-raising was not allowed under the JTPA, the practice had persisted. Department Exhibit (DOLX) 18. According to Midwest's Executive Director, Roberto Reyna, Midwest finally ceased raising funds from employees after a June 1996 notice from the Department. T. 429.

   Several Midwest employees sent letters to the Department requesting assistance in obtaining refunds of the forced contributions. In November 1996 the Department directed Midwest to reimburse the employees. DOLX 4. The next month, the OIG alerted the Department that Midwest had discharged some employees allegedly because of their cooperation with OIG's ongoing audit of the organization. DOLX 5; see also DOLX 12. When the Department objected to the firings, Midwest reinstated the employees. DOLX 14.

of personnel abuses were not true. Midwest argued that the employees had not been required to follow existing complaint procedures that would have afforded it procedural protections. Finally, Midwest objected that the Department improperly had acted as an advocate for the complaining employees. Complainant's Brief (Comp. Br.) at 2-7, attached to Midwest Exceptions. Midwest asserted that it had performed satisfactorily and therefore should have had the benefit of a waiver of competition for the 1997-1998 program years.

   Midwest also assailed the "prejudicial altering of the point totals available under the SGA," arguing that the alteration had harmed its chances of winning the grant. Comp. Br. at 7; see also n. 4, supra. It also contended that Charles Kane, the Director of the Division of Migrant and Seasonal Farmworker Programs at the Department, had an improperly close relationship with Motivation's Director, Frank Acosta, who had sent gifts of foodstuffs to Kane's home. Comp. Br. at 8. Although Motivation was not a party to the proceeding, Acosta submitted to the ALJ a written defense of Kane's conduct. See August 3, 1998 letter from Frank Acosta to the ALJ. Midwest argued that Acosta's letter documented further incidences showing the improperly close social relationship between Kane and Acosta. Comp. Br. at 8-9.

   Finally, Midwest noted that a Motivation employee, Sammy Ibarra, had embezzled JTPA funds. Midwest argued that because of the embezzlement, Motivation was not a "responsible" entity within the meaning of the JTPA and could not lawfully receive a grant.

3. The ALJ's Decision

   The ALJ found that the Department's decision not to waive competition, which caused Midwest to have to reapply for grants for the three states, was reasonable. D&O at 11. The ALJ relied upon evidence that 28 Midwest employees had provided information on abusive personnel practices, failure to pay overtime wages, and coerced contributions. Id. at 7. He also cited credible evidence of retaliatory discharge of Midwest employees who had given information to the OIG. Id.

   The ALJ next turned to the evidence concerning Kane's relationship with Frank Acosta, the Director of Motivation. The ALJ agreed with Midwest's argument that Acosta's letter defending Kane's behavior "demonstrates that [the letter] was in fact solicited by Mr. Kane following his testimony." D&O at 10. The ALJ also found other evidence of an improper relationship between the Department and Motivation. He credited the testimony of a Midwest employee that Motivation offered her a job prior to the award of the grants to Motivation, and that someone at the Department of Labor told Motivation in advance that it would receive the grants. Id. at 10-11.

   The ALJ examined evidence of financial wrongdoing on the part of Motivation. The ALJ found that the embezzlement of federal funds by Ibarra, who had been the manager of Motivation's office in Eagle Pass, Texas, was not an isolated incident. D&O at 11. The ALJ also stated that there was no evidence that the embezzled funds had been returned. Id.

   The ALJ found that "a prudent grant officer" with knowledge of Kane's activities, Acosta's gifts, and Ibarra's embezzlement would terminate the grants to Motivation. D&O at 11. The ALJ further found that the reduction in point value for the criterion "familiarity with service area" compromised the grantee selection process. Id.

   The ALJ found that the reviewing panel had formed an unbiased opinion of the strengths and weaknesses of the grant applications. D&O at 12. He also absolved Grant Officer DeLuca, who selected Motivation, of any knowledge of Acosta's gifts to Kane. Id. at 11-12. Nevertheless, the ALJ found that DeLuca had been given unspecified information by Kane, who had not disclosed to DeLuca his relationship with Acosta. Id.

   Ultimately, the ALJ concluded that the selection of Motivation violated "ethical, statutory, and regulatory requirements" and overturned the grants to Motivation for training in Minnesota and North Dakota. D&O at 12. Although the ALJ acknowledged that there was no evidence that Proteus (the grantee for South Dakota) had engaged in any improper conduct, the ALJ nevertheless also overturned the grant to Proteus because Midwest "was not given a fair opportunity to compete." Id. As remedies, the ALJ ordered the Department to recompete the 1997-1998 Section 402 grants for the three states and to reimburse Midwest for its expenses related to the grant application and hearing. D&O at 13. The ALJ also found that Midwest was entitled to attorney fees and afforded it the opportunity to submit an application for such fees. Id. at 12.

   The Department argues that the case is moot because the limited remedy under the applicable regulation, 20 C.F.R. §633.205(e), is no longer available, and because the ALJ erred in failing to order that Midwest should be the grantee for the 1998 program year. We agree.

   The regulation governing administrative review of JTPA grant challenges contains a provision designed to avoid undue disruption of service to program participants within the two year grant period. Where an ALJ rules that a non-selected applicant should have been selected, the Department selects and funds that applicant so long as the 90-day transition period for the transfer of the grant will not end within six months of the end of the funding period. 20 C.F.R. §633.205(e). This regulation represents the Department's judgment that it would be too disruptive to change the grantee within nine months of the time that the grant funds expire. Significantly, transfer of the grant to the applicant not originally selected is the sole remedy available under the regulation. Id.

   Both the Secretary and a court have rejected Midwest's argument. In Illinois Migrant Council, supra, slip op. at 10-11, the Secretary found that where the funding year had expired, a non-selected applicant's case did not come within the recognized exception of mootness for cases "capable of repetition, yet evading review." The same analysis would apply near the end of the funding year.

   There simply is no reason to assume that the same alleged intentional delay would arise in reviewing challenges by non-selectees in future years, as the Sixth Circuit found in Lake Cumberland, 1991 WL 34905 at **2 ("Petitioner contends that the Department of Labor intentionally delayed the review of its denial of the grant so as to deprive petitioner of any relief. Petitioner, however, cannot make a reasonable showing that it will again be subject to similar conduct by the Department of Labor."). Moreover, in view of Kane's prominence in the ALJ's reasoning in these cases and the fact that Kane has retired, there is no reasonable basis to believe that Midwest would again be subjected to the conduct which Midwest alleges was prejudicial.

   We recognize that the result that we reach, i.e., dismissal, may seem harsh in these cases since "the availability of [the] remedy depends on the speedy processing of [the petitioner's] appeal by the Department." Campesinos, 803 F.2d at 1069. The petitioner in Campesinos encountered "inexcusable" delays in obtaining a final decision from the Grant Officer and an adjudication of its claims within the agency, but the Ninth Circuit nevertheless found that "it is an injustice that we could not remedy without doing a greater injustice." 803 F.2d at 1071. This reasoning applies with equal force in this matter.

       PAUL GREENBERG
       Chair

       E. COOPER BROWN
       Member

       CYNTHIA L. ATTWOOD
       Member