DAB Decision 91
April 28, 1980 California State University, Chico; Docket No. 78-6;
Decision No. 91 Coster, Clarence M.; Kelly, Bernard E. Dell'Acqua,
Frank
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.)
The Office of Education (OE) Regional Commissioner, as HEW Action
Official, made disallowances pertaining to grants funded by the
Department of Housing and Urban Development, the Department of
Agriculture, and the Office of Education, as well as contracts funded by
the Office of Human Development and the Health Resources Administration.
The Board stated it did not have jurisdiction over disputes relating to
non-HEW grants or these HEW contracts. The Board also stated that
although the definition of "grant" at 45 CFF 16.3(k) includes "financial
assistance when provided by contract," there was no showing that the
contracts in question fell within that definition. The Board found that
the Office of Education had not sufficiently supported the basis for a
$960 disallowance on an OE grant; OE had failed to supply the Board
with the audit report, the date of the grant award, the period of the
grant, grant award documents, grant identification number, or specific
description of the services disallowed.
DECISION
This appeal concerns disallowances, dated December 29, 1977, made by the
Office of Education pertaining to several grants and contracts, awarded
to California State University, Chico, funded by the Department of
Housing and Urban Development, the Department of Agriculture, the Office
of Human Development, the Health Resources Administration, and the
Office of Education. A disallowance, pertaining to an Alcohol, Drug
Abuse and Mental Health Administration grant, included in the original
disallowance letter, was resolved in favor of the grantee by the Office
of Education Regional Commissioner, as HEW Action Official, by letter
dated March 13, 1978, upon receipt of a copy of a September 15, 1977
letter from the agency. The September 15, 1977 letter, enclosed with
the copy of the appeal sent by the grantee to the Office of Education,
indicated that ADAMHA had accepted grantee's justification of the
disallowed expenditure.
Neither the original appeal nor the disallowance letter accompanying it
identified which of the disallowances were related to grants and which
were related to contracts. The disallowances were identified only by
granting entity, grant or contract number, and amount, as follows: (1)
HRA 70-4079--$1,741, (2) USDA 21-79--$1,267, (3) OHD OS-71-10--$1,130,
(4) OE-Critical Language Program -- $960, and (5) HUD CD-69-614--$470.
Prior to requesting a response to the appeal from the agency, the Board
issued a letter to the parties, dated April 24, 1978, asking the parties
to comment on whether the Board had jurisdiction over the appeal of the
disallowances relating to the grants funded by the Departments of
Housing and Urban Development (CD-69-614) and Agriculture (USDA 21-79)
in light of the jurisdiction of the Board as limited by 45 CFR 16.2 to
certain disputes involving "grants awarded by a constituent agency of
the Department of Health, Education, and Welfare" (HEW).
As neither party could persuasively establish authority for the Board
taking jurisdiction of these two grants, the agency was informed that it
did not have to respond to the appeal as it pertained to the non-HEW
grants.
The agency's response to the appeal indicated that HRA 70-4079 and OHD
OS-71-10 were contracts and stated, with respect to the OE-Critical
Language Program grant disallowance, that due to "(t)he fact that our
San Francisco office is no longer in existence and there is no grant
number, we could not locate the files and are in no position to make any
determination."
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An Order to Show Cause, dated July 2, 1979, was issued to the parties
directing the grantee to show cause why the appeal should not be
dismissed with respect to the disputes pertaining to the grants funded
by the Departments of Housing and Urban Development (CD-69-614) and
Agriculture (USDA 21-79) and the contracts funded by the Health
Resources Administration (HRA 70-40-79) and the Office of Human
Development (OHD 05-71-10). The agency was directed to show cause why
the grantee's appeal should not be granted with respect to the $960
disallowance relating to the OE-Critical Language Program because the
agency could provide no justification for the disallowance.
The grantee stated, in its response to the Order, that the part of the
appeal relating to the non-HEW grants should not be rejected until the
grantee heard from the grantor agencies regarding additional
justifications (relating to the substantive issues of the case) that
were submitted to the Office of Education.
The agency stated, in its response to the Order, that the $960 relating
to the Critical Language Program grant was for consultant services,
'disallowed due to the lack of documentation because the Grantee did not
adhere to the Cost Principles and Departmental procedures set forth on
Pages 35 and 36 of the audit report." However, apparently because of its
inability to locate the files, the agency has not provided the Board
with the Audit Report, the date of grant award, the period of the grant,
grant award documents, grant identification number, or specific
description of the services disallowed. Accordingly, the agency has not
sufficiently supported the basis for the disallowance.
Conclusions
The appeal is granted with respect to the $960 disallowed in the
01-Critical Language Program grant.
With respect to the contracts funded by HEW (HRA 70-40-79 and OHD
OS-71-10), and the non-HEW grants (USDA 21-79 and CD-69-614), the
jurisdictional mandate of this Board is circumscribed precisely by the
Board's regulations. 45 CFR 16.2 limits the Board's jurisdiction to
disputes relating to grants funded by constituent agencies of HEN.
Although 45 CFR 16.3(k) provides that the term "grant" includes
"financial assistance when provided by contract," there has been no
showing that the contracts involved here fall
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within this provision. The appeal, therefore, is dismissed without
reaching the merits with respect to these contracts and non-HEW grants.
D11 May 21, 1992