GAB Decision 129
Docket No. 80-76-OR-HD
October 31, 1980
Oregon Department of Human Resources;
Coster, Clarence; Settle, Norval Przybylinski, Donald
The Oregon Department of Human Resources (State) requested
reconsideration of the determination of the Office of Human Development
Services (Agency) issued on March 26, 1980, disallowing $25,489 claimed
by the State as reimbursement for training costs under Title XX of the
Social Security Act. The Agency found that the training programs
conducted by the State did not satisfy the regulatory requirements for
Federal financial participation in travel and per diem costs during the
period beginning October 1, 1977 and ending March 31, 1978.
A number of other cases before the Board present the same issue. The
findings and conclusions in the Board's first decision concerning that
issue, Montana Department of Social and Rehabilitation Services,
Decision No. 119, September 30, 1980, are incorporated herein as
pertinent to the specific facts in this case.
Background
Title XX of the Act provides at Section 2002(a)(1) that the states
shall be entitled to FFP for services provided to achieve the goals
enumerated in the enabling legislation. Services for which
reimbursement is available include expenditures for personnel training
and retraining. Section 2002(a)(2) of the Act further provides that no
payment may be made for expenditures, other than personnel training or
retraining, which exceed a state's pro rata share of the appropriations
authorized for Title XX expenditures during the fiscal year. Thus, the
question of whether an expenditure is an allowable training cost may
have a significant effect on the FFP available to a state.
The regulations governing expenditures for training and retraining,
45 CFR 228 Subpart H, were amended on January 31, 1977 (42 FR 5848).
The amendment resulted in changes in the organization and terminology of
45 CFR 228.84 -- "Activities and costs matchable as training
expenditures." The earlier version of the section had been published on
June 27, 1975 (40 FR 27354) and, as pertinent to this case read as
follows:
Costs matchable as training expenditures include:
(c) Payment of travel, per diem and educational expenses of employees
while they are attending training programs for less than eight
consecutive work weeks;
(d) Payment of educational expenses (tuition, books, supplies) for
employees on part-time educational leave (part of the working week,
evenings, mornings).
As pertinent, the regulations were amended in 1977 as follows:
Costs matchable as training expenditures include:
(a) State agency employees.
(2) For State agency employees in full-time training programs of less
than eight consecutive work weeks: per diem, travel and educational
costs;
(3) For State agency employees in part-time training programs (part
of work week, evenings, mornings): Education costs.
The Agency, in disallowing the amounts in dispute, relied upon 45 CFR
228.84(a)(3) (1977). The Agency found that the disallowed training
costs represented expenditures for travel and per diem for employees
attending training programs of less than five full days. Inasmuch as
the training programs lasted only "part of (a) work week" (45 CFR
228.84(a)(3)), the Agency determined that the regulations did not allow
reimbursement for such costs.
The Agency noted that the audit report on which the disallowance was
based recommended that $106,309 in training costs be disallowed for the
period from July 1, 1976 through March 31, 1978. The Agency determined,
however, that inasmuch as the Agency publication which specifically
stated that "part-time training programs" included programs which
lasted
less than five full days was not issued until September 1977, it would
only disallow the travel and per diem costs claimed for the period from
October 1, 1977 to March 31, 1978. The Agency publication was an
official response to a policy interpretation question (PIQ). The
response was designated PIQ 77-88 and was issued on September 14, 1977
to all of the Agency's regional offices.
In its request for reconsideration, the State argued that the
Agency's interpretation of part-time training programs as programs
lasting less than five full days was contrary to the former Agency
practice of allowing FFP in travel and per diem costs for short-term
training programs. It argued that since there was no mention of a
policy change during the rulemaking which resulted in the 1977
amendments of 45 CFR 228.84, it assumed that Section 228.84(a)(3) (1977)
was parallel to Section 228.84(d) (1975), and that, in accordance with
the Agency's past practice, the new section did not preclude FFP in
travel and per diem costs for training programs lasting less than five
full days. The State further argued that if the Agency should be
sustained in its interpretation of the regulations, October 1, 1977, was
not the appropriate date from which to compute the disallowance. The
State alleged that, according to its records, December 1978 was the
earliest date that it was apprised of the existence of PIQ 77-88.
Issues
Interpretation of the Regulations
An Agency's interpretation of a statute or the regulations
promulgated to implement a program the Agency is charged with
administering is entitled to great deference. Udall v. Tallman, 380 U.
S. 1, 17 (1965). In this case, the Board notes that the statutory
language which exempts training costs from the ceiling imposed on
state's expenditures for services under Title XX of the Act is extremely
broad and requires further definition. In everyday usage, the concept
of "training" includes activities ranging from informal on-the-job
instruction given by a supervisor to intense classroom instruction given
at an institution for higher education. The Agency must make
distinctions as to those activities which properly constitute "personnel
training or retraining directly related to the provision of (Title XX)
services." In this respect, the Board takes notice of the fact that the
Agency, through its day-to-day dealings with the states and its
evaluations of state program operations, is in a position to determine
which activities constitute effective training. The regulations and PIQ
77-88 represent a valid definition of those training costs eligible for
Federal sharing.
Viewed on its face, the term "part-time training programs" in 45
CFR
228.84(a)(3) seems clearly to include training programs lasting less
than five full days. In Decision No. 119, noted above, however, the
Board found that even though the Agency's central office may have always
had a policy which, consistent with this interpretation of Section
228.84(a)(3), precluded FFP in travel and per diem costs for training
programs lasting less than five full days, the Agency's field components
followed a different practice. (Decision No. 119, p. 5.) Apparently
because of the confusion generated by the Region's prior practice of
allowing FFP in these costs, the Agency determined in the instant case
to allow FFP claimed for costs incurred prior to the time the State
received actual notice of PIQ 77-88. We do not find any basis, however,
for allowing FFP in costs incurred after that time.
Effective Date of PIQ 77-88
The Agency has alleged that the State was furnished a copy of PIQ
77-88 in September 1977. James Gualtney, a Social Services Specialist
employed in the Region X office of the Administration for Public
Services, stated in an affidavit dated August 7, 1980, that to the best
of his knowledge he hand-delivered a copy of PIQ 77-88 when he visited
the State agency from September 20 - 24, 1977 (Response of the Office of
Human Development Services, August 7, 1980, Exh. 2). The Agency further
alleged that the State was first put on notice of the Agency's official
position with respect to the required duration of training programs in
July 1977. In support of this assertion, the Agency submitted a copy of
a letter to the State dated July 6, 1977 which stated, as pertinent:
A verbal definition from our central office is that "part of work
week" as stated in 45 CFR 228.84(a)(3) means up to 4 days but less than
5 working days.
(Response of the Office of Human Development Services, August 7,
1980, Exh. 1).
The State alleged in its request for reconsideration that according
to available records it was not apprised of the existence of PIQ 77-88
until December 1978. The State reaffirmed this contention on September
22, 1980 in reply to a request from the Board that it submit comments,
briefing and documentation to support its request for reconsideration.
In neither instance was the allegation supported by statements from
responsible State officials or other documentation, or an explanation of
circumstances which would tend to substantiate it.
Upon consideration of the evidence of record, the Board finds that
the Agency did furnish the State a copy of PIQ 77-88 in September 1977.
The State was given ample opportunity to furnish evidence in rebuttal to
the sworn statement of the Agency official and in support of its
allegation, but it failed to do so. Under these circumstances, the
weight of the evidence favors the Agency.
The Board found in Decision No. 119 that in accordance with
Information Memorandum HDS-IM-79-10 (APS) issued on August 23, 1979 (see
Response of the Office of Human Development Services, August 7, 1980,
Exh. 3), it was Agency policy not to hold a state accountable for the
interpretation contained in PIQ 77-88 until such time as the state
received actual notice of the interpretation. In the instant case, the
Board finds that the State received actual notice of the Agency's
official policy with respect to Federal sharing in per diem and travel
costs incurred for training programs lasting less than a five full days
when it received a copy of PIQ 77-88 in September 1977.
Conclusion
The Board sustains the Agency's disallowance of $25,489 in training
expenditures incurred for the period from October 1, 1977 through March
31, 1978.
OCTOBER 04, 1983