DAB Decision 62
July 3, 1979 Del Paso Heights School District, Sacramento, California;
Docket No. 77-22; Decision No. 62 Dukes, David V.; Kelly, Bernard E.
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.)
Costs of $7,640 were incurred for a field trip from Sacramento to New
York City for 15-16 pupils accompanied by 5-8 parents and school staff.
The grantee was operating a pilot project under Title VII of the
Emergency School Aid Act, and one component of the grant permitted an
expenditure for "group trips to community resources". The total travel
budget for the component was $5000. The grantee contended that the trip
was in harmony with the stated purposes and policy of the statute which
authorized the grant and that the cost was neither unnecessary nor
unreasonable.
Without ruling on whether the cost was unnecessary or unreasonable as a
matter of law, the Board found the trip sufficiently questionable to
deny the applicability of the budget flexibility provisions in 45 CFR
100a.29, and the Board denied the appeal on the grounds that the grantee
's failure to comply with the Order of the Board requiring it to state
the total costs incurred for travel under the grant warranted an
assumption that the grantee had exhausted the budgeted amount for trips
other than the trip to New York City.
DECISION
On December 2, 1977, the Contracting Officer, DHEW Regional Office IX,
communicated to the Del Paso Heights School District, Sacramento,
California (grantee), a determination of disallowance of costs in the
amount of $7,640 in affirmance of a recommendation in the audit report
for the 1974-5 grant year, and a demand for refund. Grantee appeals.
Grantee school district consists of five schools with an enrollment of
approximately 1,100 pupils, 90 percent black. It was awarded a grant
for the period commencing July 1, 1974, through June 30, 1975, for a
pilot project under Title VII of the Emergency School Aid Act (P.L.
92-318), 20 U.S.C. 1601, eta. The amount disallowed represents costs
incurred by grantee for a field trip from Sacramento to New York City in
April 1975 for 15-16 of its pupils from grades 4, 5, and 6, accompanied
by 5-8 parents and school staff. Component IV of the 1974-5 budget
which grantee considered as authorizing the orientation trip to New
York, permitted the expenditure of $5000.00 for
"multi-cultural/multi-racial inservice workshops for staff, group trips
to community resources."
In support of the determination of disallowance, the regional office
urges that the trip to New York was outside the scope of the grant
activities for the reason that the grant authorized trips only to the
grantee's immediate community. It contends, further, that even if we
should disagree with this position, the cost item of $7,640 must be
disallowed as neither necessary nor reasonable within the meaning of the
implementing regulations.
Grantee bases its appeal on the contention that the activity which
generated the expenditure in controversy was fully in harmony with the
stated purposes and policy of the statute which furnished the authority
for the grant, and that the cost was neither unnecessary nor
unreasonable.
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A consideration of this appeal on its merits would require discussion of
several issues relating to the necessity and reasonableness of the cost
incurred - 45 CFR Part 100, Appendix B (C)(l)(a) - and to the scope of
activities fairly within the framework of the grant. These issues
would, in turn, require an analysis of the relative weight to be
accorded to the exercise of discretion in grant management as between a
grantee and the Agency concerned in order to give effect to the
principle of coordination between federal selection of ultimate goal and
local initiative or autonomy as to means. See Malcolm S. Mason, Current
Developments in Grant Law, Vol. 14, No. 2, Jan. 1979, Public Contract
Newsletter, A.B.A., pp. 15, 18.
Special considerations affecting this appeal preclude us, however, from
resolving it entirely on its merits.
While we cannot say that the cost disallowed in the amount of $7,640 was
unnecessary or unreasonable as a matter of law, enough appears to render
the New York trip questionable in light of these criteria so as to deny
applicability thereto of the budget flexibility provisions in 45 CFR
100a.29.
Insofar as the amount of $5000 budgeted for travel under Component IV is
concerned, we have requested the grantee in our Order to Develop Record
(February 21, 1979) to inform us what costs, if any, other than those
claimed for the New York trip, were charged to Component IV of the grant
during the relevant period. After the lapse of the 30 day period
allowed for response we have, at grantee's request, allowed an
additional ten days for reply. Due to non-compliance by the grantee
with the explicit mailing directions furnished to it pursuant to 45 CFR
16.53(a), its response did not reach us in a timely manner. Moreover,
the response of the grantee, while giving detailed information
indicating that it had undertaken no fewer than 108 trips to various
localities for groups of pupils under its jurisdiction and that the
number of students participating in such trips was considerably in
excess of 5,000, failed to inform us what costs, if any, were charged to
the grant for the relevant period, in connection with those trips.
It is no more than a truism to state that in appealing to us to set
aside a determination of disallowance, grantee assumed a burden of
persuasion at least to the extent of supplying this Board - at its
specific request with facts peculiarly within its knowledge, and
pertinent to decision. The rules of this Board, 45 CFR 16.61,
contemplate such consequence. In the circumstances shown, assuming that
the travel cost per pupil for each of the trips was no more than one
dollar, it would follow that the total cost must have been equal to, or
in excess of, the amount of $5000 budgeted for travel under Component IV
of the grant.
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In view of grantee's failure and refusal to comply with the lawful Order
of this Board requiring it to state the total costs incurred for travel
pursuant to Component IV and it appearing that grantee has exhausted the
amount of $5000 for trips other than the trip to New York City, the
instant appeal is hereby ordered dismissed. D11 May 15, 1992