Commonwealth of Massachusetts, 85-JTP-1 (Sec'y Nov. 26, 1985)
DATE: November 26, 1985
Case No.: 85-JTP-1
In the Matter of:
The Commonwealth of Massachusetts
FINAL DECISION AND ORDER OF THE SECRETARY
Background
The issue in this case is whether a state may retain, for
administration and monitoring, five percent of the funds allotted
to it for Summer Youth Employment and Training Programs (SYETP)
under Title II-B of the Job Training Partnership Act of 1982
(JTPA or the Act), 29 U.S.C. §§ 1501-1781 (1982)[1],
or whether 100% of the Title II-B funds must be allocated to its
service delivery areas (SDA's).
JTPA has five titles, but only the first two are relevant
here. Title I, "Job Training Partnership," provides, among other
things, for the establishment in each state of "service delivery
areas" which are comprised of units of local government and which
serve as the primary vehicle for delivery of job training
services. 29 U.S.C. § 1517. Title II, "Training Services
for the Disadvantaged" has two parts. Part A, "Adult and Youth
Programs", provides for the delivery of a wide range of job
training, counseling, remedial and basic skills education, and
similar services to prepare disadvantaged young people and adults
for, and assist them in securing, permanent employment. 29
U.S.C. §§ 1601-1605. Part B, "Summer Youth Employment
and Training Programs," is a summer jobs program for economically
disadvantaged young people, providing counseling and training
services as well. 29 U.S.C. §§ 1631-1634.
Funds appropriated for Title II programs are allotted among
states on the basis of a formula which is applicable to both Part
A and Part B. 29 U.S.C. §§ 1601(b), 1631(b). The Act
also establishes formulae for the allocation of funds in each
state among SDAs and for the operation of certain programs at the
state level. 29 U.S.C. §§ 1602-1631(b). It is the
proper interpretation of the statutory language establishing the
formula for Title II-B which is at issue in this case.
The facts and procedural history of the case are not in
dispute and are well summarized at pages 1-4 of the
Administrative Law Judge's decision.[2] The crucial facts are
that the Governor of Massachusetts received over $20 million for
SYETP for the summer of 1984. He allocated some $19 million to
the
[PAGE 2]
SDAs and retained five percent, just over million, for state
administration and monitoring. Massachusetts takes the position
that the Act permits the Governor to retain that amount of funds
for those purposes, and that the legislative history of JTPA
supports that interpretation. The state also asserts that the
position of the Deputy Assistant Secretary[3] (DAS), if
followed, would force the state to violate both the Single Audit
Act of 1984, 31 U.S.C.A. §§ 7501-7507 (West Supp.
1985), and Office of Management and Budget (OMB) Circular A-87
(A-87) on Cost Principles for State and Local Governments. 46
Fed. Reg. 9,548, Jan. 28, 1981. The DAS argues that the language
of the statute itself is clear that 100 percent of a state's
Title II-B allotment must be allocated among the SDA's, and that
nothing in the legislative history suggests any other
interpretation. This interpretation creates no conflict with
either the Single Audit Act or A-87, but if it did, the DAS
argues, the more specific language of JTPA would govern.
STATUTORY CONSTRUCTION
The starting point here, of course, as in any case of
statutory construction, is the language of the statute itself.
As the Supreme Court has emphasized repeatedly "it should be
generally assumed that Congress expresses its purposes through
the ordinary meaning of the words it uses [so that]... '[a]bsent
a clearly expressed legislative intention to the contrary,
[statutory] language must ordinarily be regarded as conclusive.'
North Dakota v. United States, __ U.S. __ , 103 S.Ct.
1095, 1102-1103, 75 L. Ed. 2d 77 (1983) (quoting Consumer
Product Safety Commission v. GTE, 447 U.S. 102, 108, 100 S.
Ct. 2051, 2056, 64 L. Ed. 2d 766 (1980).)" Escondido Mutual
Water Co. v. La Jolla, 104 S. Ct. 2105, 2110, (1984).
Section 251(b) of JTPA provides that "sums appropriated [for
SYETP]... shall be allotted among States in accordance with
section 201(b) and allocated among service delivery areas within
States in accordance with section [sic] 202(a)(2) and (3)."
Sections 202(a)(2) and (3) provide for allocation of the total
amount in three shares of one third each, based on various ratios
for unemployed and economically disadvantaged individuals in the
state and its SDAs. On its face, the statute's simple division
of the SYETP pie into three pieces leaves no share for any other
purpose.
Massachusetts argues, however, that the introductory phrase
in section 202(a)(2), "[o]f the amount allocated under this
subsection" refers back to section 202(a)(1). That section
requires that only 78 percent of the state's allotment be
allocated under the formula of thirds in section 202(a)(2),
leaving 22 percent for other purposes, one of which is a five
percent share for auditing, administration and monitoring, as
[PAGE 3]
provided in section 202(b)(4).
Many problems of logic and draftsmanship are raised by the
state's argument. First, it does not explain what happens to the
remaining 17 percent of the state's SYETP allotment. It is clear
that it cannot be used for the purposes in section 202(b)(1),
(2), and (3) which provide, respectively, for state education
programs, for training older individuals, and for incentive
grants to the SDA's. SYETP is exclusively a youth jobs program.
Massachusetts would tie down this loose end by passing the 17
percent on to the SDA's. But I find it highly doubtful that
Congress would leave 17 percent unallocated, entrusting to the
unfettered discretion of each state whether these funds would be
made available to the SDA's. Moreover, this construction would
leave unresolved the question whether the state could keep the 17
percent if it chose. When Congress carefully and explicitly
divided the Title II-B funds by referring to sections 202(b)(2)
and (3), I find it highly unlikely that Congress intended to
leave so significant a portion of the funds in limbo.
Moreover, Congress demonstrated in section 251(b) that, when
it chose to do so, it knew how to pick out specific portions of
the statute from one part for use in another. It is much more
logical to assume Congress simply would have referred to section
202(b)(4) in section 251(b), if it had wanted to carve out five
percent for administration and monitoring by the state under
Title II-B. That approach would have left no uncertainty about
the fate of the remaining 17 percent. A much more logical and
consistent interpretation of the introductory phrase in section
202(a)(2) is that it is to be read, along with the rest of that
section and paragraph (3), as part of section 251(b). "Of the
amount allocated under this subsection" means that of the amount
of Title II-B money allotted to the state under section 251(b),
that money is to be allocated according to the terms of section
202(a)(2) in thirds totaling 100 percent.
Massachusetts also argues that section 254 of JTPA supports
its interpretation that five percent may be retained by the
Governor for administration and monitoring. Section 254 provides
that Governors shall have the same authority, duties, "and
responsibilities with respect to planning and administration of
funds available under this part as...Governors have for funds
available under part A of title II." Massachusetts contends this
language incorporates section 202(b)(4), which makes five percent
available for auditing and administration. But this argument
confuses allocation of funds (which makes them "available"
as that term is used in section 254) with planning and
administration of funds. Section 254 makes clear that
Governors have the same role, i.e., the same duties and
responsibilities, and the same relationship with the other
planning and
[PAGE 4]
administering bodies designated in the statute (e.g. private
industry councils) for carrying out Title II-B as they do under
Title II-A. But just as section 202 allocates funds for Title
II-A purposes, only section 251 allocates funds for Title II-B.
If Congress had intended to allocate some Title II-B funds
for administration and monitoring it would have said so
explicitly in Title II-B, or made a specific reference to section
202(b)(4).
LEGISLATIVE HISTORY
Massachusetts' main point drawn from the legislative history
of JTPA is based on a statement in the Conference Report, H.R.
Rep. No. 889, 97th Cong., 2d sess. 84, reprinted in 1982
U.S. Code Cong. & Ad. News 2705, 2706, on the bill which became
JTPA. The report said:
The Senate bill provides that 5 percent of the amount
appropriated for Titles I to III and the Job Corps shall be
allotted among the States and be available to the Governor
for costs of auditing and administration of Statewide
programs. The House amendment provides that 10 percent of
the funds appropriated for Title II shall be available for
the Governor's coordination and special services plan, for
the State employment and training coordinating council, and
for coordinating employment related education and training
programs. The House recedes with an amendment to conform
to the fund allocations in the bill.
H.R. Rep. No. 889, 97th Cong., 2d sess. 84. Massachusetts'
reliance on this portion of the report is misplaced. The
provisions establishing SYETP were contained in Title VII of the
Senate bill. Titles I, II, and III in the Senate bill (S. 2036)
were "Title I - State Job Training Program", "Title II - National
Job Training Programs", and "Title III - Administrative
Provisions". Thus the statement quoted above did not apply to
funds appropriated for the SYETP program.
The "fund allocations in the bill" (S. 2036) to which the
House of Representatives was agreeing did not provide for
retention of five percent of SYETP funds by the State for
administration and monitoring. By following the course of the
provision which became section 202(b)(4) through numbering
changes, title shifts, and amendments, the intent of Congress to
provide funds for administration and monitoring only out of funds
appropriated for Title II-A of the Act becomes clear. In the
original Senate bill, S. 2036, 97th Cong., 2nd Sess., 1982, 128
Cong. Rec. S247 (daily ed. Feb. 2, 1982), Title I established
the "State Job Training Program" which did not include a Summer
Youth Program. There was no Summer Youth Program at all in the
original bill. Section 101(a) of S. 2036 allotted seven percent
[PAGE 5]
of the amount appropriated for Titles I, II, and III (Title II
was National Job Training Programs, and Title III was
Administrative and General Provisions) to the states for use by
the Governor. Only 10 percent of that amount (i.e., 0.7 percent
of the amount appropriated for titles I, II, and III) could be
used for auditing and statewide administrative activities.
The Senate bill as reported, 128 Cong. Rec. S7808 (daily
ed. July 1, 1982), permitted the use of 0.75 percent (15 percent
of five percent) for auditing and administrative activities out
of money appropriated for Titles I, II, and III. A Summer Youth
Program had been added to the bill as Title VII, and it required
that all the funds appropriated for that Title (with the
exception of an amount not relevant here) be "suballocated among
service delivery areas within states in accordance with section
101(c)(1)." 128 Cong. Rec. S7819 (daily ed. July 1, 1982). At
this point in the legislative process section 101(c)(1), which
was the predecessor of section 202(a) of JTPA, required that 84
percent of the state's allotment for Titles I, II, and III be
allocated among service delivery areas (according to a specified
ratio). The remaining 16 percent of Title I, II and III money
was to be used for various specified programs, with no portion
set aside for administration and auditing.
Since none of the programs specified in that 16 percent
could be part of a summer youth program (e.g. job training for
older persons), the illogic of Massachusetts' argument as to
section 202(a)(1) of JTPA becomes apparent. To read the Senate
bill (as reported) the way Massachusetts would read JTPA would
mean the Senate intended Title VII (Summer Youth) money to be
divided into two portions of 84 percent and 16 percent. The 84
percent would be allocated immediately to the SDAs; the 16
percent would be retained by the Governor, but upon discovery
that there was nothing he could permissibly do with the money, he
would then allocate it to the SDAs as well. Obviously this would
have been a meaningless procedure which the Senate never intended
occur. Thus, review of the history of the fund allotment and
allocation provisions of JTPA affords no support for
Massachusetts' contention that Congress intended the Governor
first to retain 22 percent of SYETP funds, retain five percent
and then transfer 17 percent to the SDAs.
In fact, the provision which became JTPA section 202(b)(4)
was added to the Senate bill on the floor in an amendment offered
by Senators Kennedy and Quayle. The stated purpose of their
amendment was to respond to comments received from Governors that
the bill as reported did not provide enough resources for
monitoring and oversight. The amendment, therefore, struck the
15 percent of five percent limitation, and made the full five
percent available for auditing and administration. 128 Cong. Rec.
[PAGE 6]
S7827, S7664-65 (daily ed. July 1, 1982). It is significant
that when this change was made, SYETP was still in Title VII.
The five percent the Kennedy-Quayle amendment made available for
auditing and administration was to come from "the amount
appropriated pursuant to section 301(a)" which authorized
appropriations only for Titles I, II, and III.[4]
THE SINGLE AUDIT ACT AND OMB
CIRCULARS A-87 and A-102
Massachusetts asserts that generally accepted accounting
principles incorporated in the Single Audit Act of 1984, 31
U.S.C.A. §§ 7501-7507 (West Supp. 1985), and Office of
Management and Budget (OMB) Circulars A-87, 46 Fed. Reg. 9,548
(1981), and A-102, 49 Fed. Reg. 50,134, (1984), prohibit the
shifting of the cost of administration and monitoring of Title
II-B to Title II-A. Although not required to do so,
Massachusetts adopted the principles and procedures of A-87 and
A-102 in reliance on the assurance provided in the preamble to
the JTPA implementing regulations that "[r]ecipients...electing
to adopt...A-87 and A-102...would be considered in compliance
with their accountability obligations under [JTPA]." 48 Fed.
Reg. 11,078 (1983).
The Single Audit Act was passed "to establish uniform
requirements for audits of Federal financial assistance provided
to State and local governments." 31 U.S.C.A. § 7501 note
(West Supp. 1985). It delegated authority to the Director of OMB
to issue implementing guidelines. 31 U.S.C.A. § 7505(a).
Pursuant to his authority under the Single Audit Act, the
Director of OMB issued Circular A-128, "Audits of State and Local
Governments."[5] 50 Fed. Reg. 19,114 (1985). He also issued OMB
Circular A-87 "Cost Principles for State and Local Governments",
which provides "principles for determining allowable costs of
programs administered by State [and] local...governments under
grants from and contracts with the Federal Government." 46 Fed.
Reg. 9,548 (1981). Circular A-87 is cross-referenced in Circular
A-128.
The Single Audit Act prohibits any recipient required to
conduct an audit "from charging to any such program [of
Federal financial assistance]...more than a reasonably
proportionate share of the cost of any such audit ..." 31
U.S.C.A. § 7505(b)(1) (emphasis added). Circular A-128
provides:
"16. Audit Costs. The cost of audits made in
accordance with the provisions of this Circular are
allowable charges to Federal assistance
programs.
a. The charges may be...determined in accordance
with...Circular A-87 ..."
50 Fed. Reg. 19,119 (1985) (emphasis added). Circular A-87
[PAGE 7]
provides:
"C.2. Allocable costs.
a. A cost is allowable to a particular cost
objective to the extent of benefits received
by such objective.
b. Any cost allocable to a particular grant
or cost objective...may not be shifted to
other Federal grant programs..."
46 Fed. Reg. 9,549 (1981) (emphasis added).
The crucial question, therefore, is what constitutes a
"program." In other words, does JTPA constitute one "program"
or are each title and subtitle separate programs. "Program",
"grant", and "cost objective" seem to be used interchangeably.
Circular A-87 defines "Grant" as "an agreement between the
Federal Government and a State...whereby the Federal Government
provides funds...to carry out specified programs, services or
activities." 46 Fed. Reg. 9,549, Paragraph B.7 (1981). The
record here reveals only one agreement between Massachusetts and
the Federal Government and it covers all of the provisions of
JTPA. Administrative File, Tab E.
The only further guidance on what constitutes a "program" is
a reference in the section of OMB Circular A-128 on the required
contents of audit reports, to "Federal assistance
programs...identified in the Catalogue of Federal Domestic
Assistance." 50 Fed. Reg. 19,118, Paragraph 13.a.(l) (1985).
The Catalogue of Federal Domestic Assistance 1985 lists all of
Titles I, II and V of JTPA together under one catalogue number,
and describes SYETP as simply one among several "Uses and Use
Restrictions" of Title II. I conclude, therefore, that the
services provided by the states under JTPA constitute one program
and that it would not violate either the Single Audit Act or the
principles of OMB Circulars A-87 and A-128 to pay for the costs
of auditing, monitoring and administration of Title II-B of JTPA
out of funds made available under section 202(b)(4) of that Act.
It is incongruous that Massachusetts raises as a defense
this potential violation of the Single Audit Act and the OMB
Circulars. The agency responsible for resolution of audit
findings of questioned costs under JTPA, the Department of Labor,
31 U.S.C.A. § 7502(g) and A-128, Paragraph 14. Audit
Resolution, has stated clearly that the use of Title II-A
funds for monitoring and administering Title II-B is not a
violation of either JTPA or the Single Audit Act. If an
independent auditor engaged by Massachusetts to meet its
obligations under the Single Audit Act questioned such use of
Title II-A funds, Massachusetts
[PAGE 8]
would submit a corrective action plan to the Department of Labor,
which would then determine the proper action under the procedures
provided for in JTPA and its implementing regulations. The House
Report on the bill which became the Single Audit Act made clear
that "the provisions [of 31 U.S.C.A. § 7502(g)] are not
intended to replace Federal agencies' current audit resolution
policies and procedures; they are intended to complement agen-
cies' existing systems." H.R. Rep. No. 708, 98th Cong., 2d Sess.
12, reprinted in 1984 U.S. Code Cong. & Ad. News 3955,
3966. Obviously, the Department of Labor would not pursue any
such finding or require any corrective action. Massachusetts'
concern that it would be in violation of the Single Audit Act and
OMB Circulars therefore is unfounded and cannot form the basis of
a defense to the Deputy Assistant Secretary's charge.
SANCTIONS
The ALJ found that Massachusetts' refusal to allocate all
Title II-B funds to its SDA's after a number of requests by
Department of Labor officials to do so was a willful disregard of
the requirements of the Act. Under JTPA section 164(e), he
ordered the repayment, with interest, of the misspent funds from
funds other than those received under JTPA. Massachusetts takes
exception to this order, arguing that the ALJ applied the wrong
standard of "willfulness."
In addition, Massachusetts maintains that there is no
authority in the Act or any other statute for the assessment of
interest, and that the Debt Collection Act of 1982, 31 U.S.C.
§§ 3701-3717 (1982), prohibits charging state and local
governments interest on debts due to the United States. I do not
find Massachusetts' arguments persuasive and I affirm the order
of the ALJ.
Massachusetts cites a Supreme Court decision interpreting
"willfulness" under a criminal provision of the tax code,
United States v. Pomponio, 429 U.S. 101 (1976), as
establishing the standard which should be applied under section
164(e) of JTPA. I do not think the standard of "willfulness"
applicable in proving the commission of a felony is the standard
to be followed under the noncriminal repayment provisions of
section 164(e).[6] In Laffey v. Northwest Airlines, 567
F.2d 429, (D.C. Cir. 1977), for example, the court distinguished
between "willfulness" for purposes of the criminal provisions of
the Fair Labor Standards Act (FLSA), 29 U.S.C. § 216(a)
(1982), and "willfulness" as that term is used in section 6(a) of
the Portal-to-Portal Act of 1947, as amended, 29 U.S.C. §
255 (1982), which establishes a three year statute of limitations
for recovery of back wages.
In Laffey the Court of Appeals for the District of
Columbia Circuit rejected the claim that "willful" simply means
"[d]id the employer know the [statute] was in the picture?" The
court said:
[PAGE 9]
[T]he employer's noncompliance is 'willful' when he is
cognizant of an appreciable possibility that he may be
subject to the statutory requirements and fails to take
steps reasonably calculated to resolve the doubt. [An
employer acts willfully] when he consciously and voluntarily
charts a course which turns out to be wrong."
567 F.2d at 461-462 (footnotes omitted).
Laffey was a challenge under the Equal Pay Act, 29
U.S.C. § 206(d)(1982), to differences in pay between male
pursers and female stewardesses which Northwest Airlines (NWA)
defended as justified by differences in job duties. The court
noted that NWA knew about the Equal Pay Act, had reviewed its
policies in light of the Act, and had concluded there were
differences in the jobs which supported differences in pay. The
court found that action willful, saying "the company consciously
though erroneously concluded that its treatment of pursers and
stewardesses was unaffected by the Act. We deem that sufficient
to comprise willfulness..." 567 F.2d at 463. See also
Marshall v. Union Pacific Motor Freiqht Co., 650 F.2d
1085, 1092-1093 (9th Cir. 1981).
There is no doubt Massachusetts was aware of the provisions
of JTPA, and at least as of November 10, 1983, it (as well as all
other states) was specifically notified that "100% of Title II-B
funds must be allocated to SDA's within a state." (Administrative
File, Tab C-8.) Thereafter, throughout 1984, Massachusetts was
repeatedly notified, by telegrams, letters, and in face-to-face
meetings, that the Department of Labor considered the state's
position on use of Title II-B funds erroneous. (See
Administrative File, Tabs A, B-3, B-6, B-7, C-3 and C-5.)
Massachusetts' reliance on the vagueness of the statute and
arguably implicit approval of its practices in a report by the
Department of Labor Inspector General (Administrative File, Tab
C-9, p.17) cannot withstand these explicit, repeated notices by
the responsible officials of the Department of Labor that
Massachusetts was violating JTPA.[7] (See discussion above pp.
13-14.) In any event, as the court said in Marshall v. Union
Pacific Motor Freight Co., supra, "[u]ncertainty is no
defense to an allegation of 'willfulness'." 650 F.2d at 1093.
Massachusetts withheld funds for administering and monitoring in
violation of JTPA section 164(e)(1) and those funds must be
repaid.
The ALJ ordered Massachusetts to repay the ,013,382.00
withheld with interest. As a general rule, interest is awarded
on monetary obligations to compensate for the lost use or time
value of the money. Massachusetts claims that because there is
[PAGE 10]
no explicit authority in JTPA for the Secretary to award
interest, that I may not do so. However, In Rodgers v.
U.S., 332 U.S. 371 (1947), the Supreme Court noted that:
[t]he failure to mention interest in statutes which create
obligations has not been interpreted by this Court as
manifesting an unequivocal congressional purpose that the
obligation shall not bear interest. (citation omitted.) For
in the absence of an unequivocal prohibition of interest on
such obligations, this Court has fashioned rules which
granted or denied interest on particular statutory
obligations by an appraisal of the congressional purpose in
imposing them and in light of general principals deemed
relevant by the Court. (citations omitted.)
332 U.S. at 373. See also Hodgson v. American Can Co.,
440 F.2d 916 (8th Cir. 1971). Thus I do not believe that the
absence in JTPA of explicit authority to award interest is an
absolute bar.
The Debt Collection Act of 1982 made it mandatory for
Federal agencies to charge interest on outstanding debts at the
minimum rate specified. 31 U.S.C. 9 3717 (1982). State and
local governments were excluded from that requirement. 31 U.S.C.
§ 3701(c). But the Debt Collection Act does not prohibit an
award of interest on an obligation of a State to the Federal
government. It simply requires that Federal agencies
charge at least the minimum rate of interest specified on
obligations which are covered by the Act. This legislation
leaves to the discretion of agency heads the question of charging
interest on obligations of State and local governments. The
legislative history of the Debt Collection Act reflects Congress'
concern over the failure of many agencies to collect debts at
all, and their practice of charging interest below market rates
if it was assessed at all. S. Rep. No. 378, 97th Cong., 2d
Sess., 3-4, reprinted in 1982 U.S. Code Cong. & Ad. News
3377, 3379-80. There was no statement of intention to relieve
states entirely from the payment of interest.
This interpretation of the Debt Collection Act accords with
that of the Department of Justice and the General Accounting
Office in their regulations implementing the Act. 4 C.F.R.
§ 102.13(i)(2) (1985). See also 29 C.F.R. §
20.51(b) (1985). Those agencies rejected the argument that the
Debt Collection Act totally preempts the common law and that the
Act's exemptions therefore amount to prohibitions. 49 Fed. Reg.
8,891 (1984). They said "the common law right to charge interest
continues to exist [but] the limits, procedures, and other
requirements of the Debt Collection Act do not apply to those
debts that are exempt from the interest provisions of the act..."
Id., at 8,894.[8] See
[PAGE 11]
also Decision of the Comptroller General B-212222, Aug. 23,
1983, __ Comp. Gen.__ .
Here, Massachusetts has had the use of money which should
have been allocated to the service delivery areas, the use which
Congress intended, or returned to the Treasury of the United
States where it would have earned interest. In these
circumstances, I think the ALJ's order assessing simple interest
at nine percent a year was reasonable and I adopt it.[9]
For the reasons discussed above, I adopt the ALJ's Decision
and order in its entirety.
WILLIAM E. BROCK
Secretary of Labor
[ENDNOTES]
[1] All JTPA citations are to the 1982 bound volume of the United
States Code.
[2] Decision and order of Administrative Law Judge (ALJ) David R.
DiNardi, issued April 19, 1985.
[3] Deputy Assistant Secretary of Labor for Employment and
Training.
[4] At the time this amendment was introduced and passed Senator
Kennedy had printed in the Congressional Record comments from the
Department of Manpower Development of the Commonwealth of
Massachusetts. While pointing out the need for more resources to
carry out the Governor's responsibilities, Massachusetts did not
mention the SYETP program or the fact that the reported bill made
no separate provision for funds for administration and monitoring
of that program. 128 Cong. Rec. S7827 (daily ed. July 1, 1982).
[5] Circular A-128 is the final version of the circular referred
to in Massachusetts' briefs as A-102. A-102 was published in the
Federal Register on Dec. 26, 1984 for notice and comment.
[6] The legislative history of JTPA is silent on what Congress
meant by "willful" in section 164(e).
[7] I find circular Massachusetts' argument that I should
consider as an "equitable factor" that the activities performed
by the Commonwealth with Title II-B funds, i.e. administration
and monitoring, were only activities required by JTPA and were
not unnecessary, unreasonable or frivolous. Whether any Title
II-B funds may be used for administration and monitoring is
precisely the issue in this case, and I have found they cannot.
[8] Erie Railroad Co. v. Thompkins, 304 U.S. 64 (1938)
cited by Massachusetts is inapposite. It only established a rule
that there is no federal common law in actions in federal court
based on diversity of citizenship. U.S. Const., art. III, §
2, cl. 7.
[9] I would note that 9 percent is the rate established by the
Comptroller of the Department of Labor for assessing interest
charges on debts due the Government and has been the rate in
effect during the entire period of this dispute. It is based on
the current value of funds to the Department of Treasury
announced each calendar quarter in Treasury Fiscal Requirements
Manual bulletins.
