DAB Decision 54
March 29, 1979 Florida Educational Research and Development Council,
Inc.; Docket No. 77-3; Decision No. 54 Kelly, Bernard; Malone, Thomas
Wilner, Irving
SUMMARY
(The following summary is prepared on the responsibility of the
Executive Secretary of the Board as a convenience to the interested
public. It is not an official part of the decision and has not been
reviewed by the Panel. Similar official summaries of earlier cases
appear in 45 CFR Part 16 Appendix.)
Grantee appealed an Office of Education determination disallowing
$26,523 charged to a Follow-Through project grant for salary and wage
payments during the period of March 1972 through December 1974. Grantee
entered into cooperative agreements with the University of Florida,
resulting in the program being to a large degree under the effective
control of the University. University personnel used the questioned
grant funds to pay salary and wages to members of the University faculty
and to graduate students for the routine classroom instruction of
undergraduates, an activity unrelated to the Follow-Through program.
Grantee contended that it had detailed nine of the university's
professors to serve as Liaison Officers to the grant project, and
instead of paying the Liaison Officers' salaries from the grant budget
the University continued to pay them their full salaries out of its own
resources. Grantee then paid from grant funds substitutes who had
undertaken the Liaison Officers' normal teaching assignments. The record
indicated that the Liaison Officers had also received consultant fees
from the grant without any corresponding reduction in their normal
salaries. The Board concluded that grantee had failed in its burden of
going forward with reliable evidence to demonstrate facts in
justification for paying the university's faculty members for time
released to and paid for by the grant. The Board ruled that in the
absence of proof that would explain and justify grantee's actions a
decision to sustain the payment would countenance the burdening of the
grant with a double payment.
DECISION
The Florida Educational Research and Development Council, Inc.
("grantee") appeals from a determination of the Chief, International
Equal Education and Compensatory Education Branch, Grant and Procurement
Management Division, Office of Education ("OE") disallowing $26,523
charged to grant number OEG-O-8-522394-3991 for salary and wage payments
during the period of March 1972 through December 1974.
Grantee was organized as a private nonprofit organization for the
purpose of assisting public schools in the State of Florida to improve
their educational programs and, in this connection, to conduct studies
as well as major research and testing projects, and to disseminate the
results thereof to the schools of the member counties.
The controversy under consideration originates in a Follow-Through
project grant sponsored by grantee but to a large degree under the
effective control of the University of Florida. The record shows that
while grantee was generally authorized under the Terms and Conditions of
the grant to enter into cooperative agreements with individuals or other
entities for the effectuation of the legitimate purposes of the grant,
it suffered its relationship with the University of Florida with which
it had cooperative agreements to become overly informal. Because grantee
was without professional staff of its own, its location on University
premises, and the substantial representation of the University on
grantee's Council, the routine activities and administration of the
latter were in practical charge of the University. However, it is clear
that through delegation of authority to carry out functions under a
grant, a grantee may not divest itself of responsibility and
accountability for Federal funds entrusted to it.
It was University personnel which used the $26,523 of Follow-Through
funds transferred to it by the grantee to pay salary and wages to
members of the University faculty and to graduate students. Some
preliminary equivocation apart, it is now undisputed that the payment
was to compensate for routine classroom instruction of undergraduates
and that the recipients of this fund rendered no service to the
Follow-Through program.
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Grantee s appeal from the determination of this disallowance rests on
the contention that the University had detailed nine of its professors
to serve as Liaison Officers to the grant project, as authorized by the
grant terms; that this assignment required that the Liaison Officers be
relieved of their teaching obligation to the University on a part time
basis; that the grant budget provided stipulated salaries to the
Liaison Officers but that they did not, in fact, receive such salaries,
and that the University continued during the relevant period to pay
these Liaison Officers their full salaries out of its own resources.
Grantee maintains that the recipients of the amount which is the subject
of the disallowance had acted as substitutes for the Liaison Officers,
and that the payment was in lieu of the salaries to which the Liaison
Officers were entitled under the Follow-Through grant, and which they
did not receive.
This account of the facts surrounding the use of the amount disallowed
raises some questions. Invited by the Board to explain why the
University chose to pay the Liaison Officers their regular salaries
undiminished for the time periods that they were engaged in serving the
grant, and why they were not paid their budgeted salaries as provided in
the grant, grantee offered nothing to shed light on the matter. We have
no way of ascertaining whether the sum disallowed ($26,523) was equal
to, greater, or less than the aggregate of the salaries budgeted for the
Liaison Officers. Equally, we are without knowledge whether the amount
claimed by grantee as a set-off represents the reasonable value of the
teaching services of the substitutes in terms of time devoted to
teaching or relative professional competence.
On the basic question whether the Liaison Officers were paid their
stipulated salaries in accordance with the Follow-Through budget we are
not inclined to accept literally the statement by OE in its Response to
the Supplemental Order to Develop Record that "Liaison Officers were
compensated as a direct cost of the project on a salary basis." The
Exhibit cited on this proposition merely sets forth the budgeted
salaries for these officers, and does not purport to relate to the
question of actual payment of these salaries. Further, this statement
is not in harmony with the main trend of OE's position. Additional
clarification on this particular might perhaps be called for if such
were essential to decision but we think that an alternate and more
satisfactory ground exists for the resolution of this appeal.
It appears that in addition to authorizing salary payments for Liaison
Officers, the grant documents also provide for the employment of
consultants for what grantee refers to as out-of-town services to the
project communities, at a fixed daily fee. There is no full agreement
between the parties concerning the degree of identity of function of
consultants and Liaison Officers. Two important facts must, however, be
viewed as established: one, that the same members of the University
faculty detailed as Liaison Officers accounted for nearly 80% of the
consultant force in terms of man-days spent in this capacity; two, that
the compensation
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actually received by the consultants for their services during one year
out of a total relevant period of two years and nine months amounted to
$18,000. There is no basis in the appeal file for calculating the
aggregate amount of consulting fees paid to the University professors
who were assigned as Liaison Officers during the remaining period of one
year and nine months with any degree of exactitude. There is on the
other hand, nothing in the file to show that the practice of employing
and compensating consultants during the time interval preceding or
following the 1973-4 grant year for which information is available was
at variance in any respect. It should also be observed that along the
consultants who had functioned as Liaison Officers there were three who,
in addition, had also served-and received compensation-as Project
Director, Evaluation Coordinator, and Field Service Coordinator. Two of
the latter are also listed in the budget as employed under the heading
of Research and Development. That the amounts derived by these
University personnel from Follow-Through sources were indeed
considerable is seen from a tabulation introduced into the record by OE
which indicates that during the relevant period the nine consultants
received as compensation an amount exceeding $75,000. Grantee countered
that the amount includes receipts from "other projects," without in
any
way identifying those projects.
We note that in one of grantee's documents in support of its appeal the
claim is made that during the period under consideration "Some $50,650
of the time of University personnel were utilized by the Follow-Through
program." This assertion, stated in general terms, may or may not be
accurate. It is certainly of no probative value unaccompanied as it is
by any allegation concerning payment for the time indicated.
The significance of these facts derives from the circumstance that
nothing in grantee's presentation suggests that the University has
deducted from the normal salaries payable to these members of its
faculty an amount equal to the value of their time of duty during which
they were employed by the Follow-Through grant and for which they have
been paid from grant sources, or any lesser amounts. It is obvious that
had such deductions been made, the amounts thus saved would, and should,
have been used as a fund from which to compensate substitutes. Failure
to do so, if such was indeed the case, would deprive grantee's theory of
reimbursement or setoff for the amount disallowed of any plausibility.
We are persuaded that at no time during the relevant period did the
University make adjustments downward in the salaries paid its faculty
personnel on account of compensation they received from the grant for
employment during released time. On December 28, 1976, OE requested
grantee to submit documentation that would substantiate the fact that
University professors paid as consultants by grantee were not paid by
the University for the same periods of time. The file does not indicate
that such documentation was supplied. Likewise, on February 18, 1977, OE
advised grantee of the Region IV audit recommendation of disallowance.
It referred to the consultant payments, and to grantee s attempted
justification of the expenditure as proper
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compensation for substitutes, and expressed the conclusion that "the
substitute time should have been paid by the University with those
monies released because the consultants should not have been paid their
regular salaries." Grantee did not choose to address these position
statements. In fact, grantee's responses to our Order to Develop the
Record are consistent only with the notion that during the period here
involved, University professors who devoted part of their academic time
to the Follow-Through program continued to receive their contract
salaries based on the "salary schedule in force."
In conclusion it is our opinion that in view of the admitted fact that
the recipients of the disallowed amount did not render any service to
the Follow Through project, the burden of proof, at least the burden of
going forward with reliable evidence, is that of the grantee to
demonstrate facts in justification. Grantee does not discharge this
burden by vague suggestions that University personnel had worked long
periods for the benefit of the grant or that consulting fees paid to
them were in part attributable to "other projects" without further
elaboration. In the absence of proof that would adequately explain and
justify the failure of the University of Florida to deny payment to its
faculty members for time released to and paid for by the Follow-Through
grant,a decision that would sustain the payment in controversy as proper
payment for substitutes would amount to our countenancing the burdening
of the grant with double payment for one service.
Accordingly, we deny the appeal and affirm the determination of
disallowance and refund in the sum of $26,523. D11 May 15, 1992