GAB Decision 131
October 31, 1980
Docket No. 79-26
Oglala Sioux Community College Pine Ridge, South Dakota; Coster, Clarence; Przybylinski, Donald Settle, Norval
The Oglala Sioux Community College (Grantee) appealed a decision by
the Public Health Service (PHS) Regional Grant Appeals Board,
disallowing $1,111.86 in costs claimed under Grantee's Nursing Special
Project Grant. An analysis of Grantee's application for review and the
PHS response was set forth in a draft decision, and the parties were
provided an opportunity to comment on the draft. The draft tentatively
concluded that the PHS Board position was correct. Neither party has
submitted any comments.
Accordingly, we have adopted a decision in substantially the same
form as the draft transmitted to the parties. We conclude, for the
reasons set forth below, that the disallowance should be upheld.
Background
Grantee received a Nursing Special Project Grant for the budget
period June 1, 1975 through May 31, 1976, later extended to November 30,
1976. The purpose of the grant was to establish a program to provide an
opportunity for persons who were unable to relocate to a higher
education facility to take courses leading to an associate of arts
degree in nursing.
On February 14, 1978, the PHS Office of Grants Management, Region
VIII (Region), disallowed expenditures claimed for training costs
(including travel) as follows: a) $815.86 for a trip to Hawaii; b)
$296 for a trip to Vail, Colorado; and c) $315.40 for a trip to
Albuquerque, New Mexico. The Region based the disallowance on the
ground that Grantee had failed to establish acceptable program
justification for these trips. A subsequent disallowance letter was
issued on March 27, 1978 by PHS.
On April 6, 1978, Grantee appealed to the PHS Board the disallowances
for the costs of the trips to Hawaii and Vail. The disallowance
concerning the trip to New Mexico was not contested. The PHS Board
upheld the disallowances in a letter dated July 18, 1978. Grantee
appealed to the Departmental Grant Appeals Board on August 10, 1978.
Trip to Hawaii
One of Grantee's program coordinators attended a conference from
February 21 to March 3, 1976 in Hawaii. This program coordinator states
in a February 23, 1978 memorandum to Grantee's Project Director that the
conference was titled "Advances in Patient Care" and that the curriculum
emphasized preparation for nursing in "low socioeconomic, culturally
deprived communities." She further states that attendance at the
conference helped to improve her expertise in administration and
teaching and gave her additional skills and knowledge for counseling in
family health. This memorandum, prepared two years after the
conference, is the only documentation submitted by Grantee in support of
its position that the conference was of benefit to the project.
In a letter dated June 19, 1978, the Regional Health Administrator
(RHA), Region VIII, who investigated the matter for PHS, states that the
conference was conducted by the Medical Computer Services Association
(MCSA) and was attended primarily by physicians. In addition, the RHA
states that conversation with MCSA revealed that the title of the
conference was "The Changing Health Care Team -- Improving Effectiveness
in Patient Care."
This conflicting evidence was pointed out to Grantee. Grantee has
neither denied the RHA's statements nor submitted any further evidence
to dispute them.
Trip to Vail, Colorado
An employee of the Indian Health Service, on detail to the Grantee,
attended a conference from July 25 through August 8, 1976, in Vail,
Colorado. According to the RHA, the conference was a series of intense
seminars sponsored by the Colorado Nurses Association. Each individual
seminar was geared to a specific area of interest. The RHA stated her
opinion that the content of these seminars was too specialized to be of
much value to someone attending the entire conference. Grantee has
submitted a copy of an April 14, 1978 letter to the Director, PHS
Division of Grants and Contracts, stating that the employee who made the
trip had a limited background and that Grantee desired to assist her in
developing her skills. Grantee did not, however, provide any
explanation concerning how attendance at this conference would, in fact,
enhance those skills.
In addition, the RHA pointed out that Grantee paid for eleven days of
seminar attendance but only paid per diem for seven days. Grantee has
failed to explain this discrepancy.
Discussion
Section 57.1912 of 42 CFR applies certain administrative requirements
and cost principles set forth in 45 CFR Part 74 to Nursing Special
Project Grants. Part 74, Subpart Q, Appendix D, paragraph C.2 states,
"The tests of allowability of costs under these principles are: (a) they
must be reasonable . . . ." The test of reasonableness set forth in
paragraph C.3 is normally whether "the nature of the goods or services
acquired or applied, and the amount involved therefor, reflect the
action that a prudent person would have taken under the circumstances
prevailing at the time the decision to incur the cost was made." We have
determined that these two trips were not reasonable charges to the grant
program.
Grantee has had at least three opportunities to make clear how these
conferences were to be of benefit to project goals and otherwise were
reasonable. The decision of the PHS Regional Grant Appeals Board points
out that no effort was made to relate specific subjects covered at the
seminars to the project goals. When appealing to this Board, Grantee
again failed to address this issue. Grantee made no effort in its
submission to this Board to discuss: 1) the advantages gained from the
conferences selected; 2) alternatives available; and 3) benefits to
the program. This defect was specifically pointed out to the Grantee in
our draft decision, but Grantee made no effort to correct it.
The Board has held that after-the-fact documentation, such as that
submitted in this case, will not necessarily be rejected, but must meet
a burden of persuasion of specificity and precision. Head Start of New
Hanover County, Inc., DGAB Docket No. 78-94, Decision No. 65, September
26, 1979. In this case, the documentation which purportedly relates the
purpose of the trips to project goals is vague and incomplete and does
not meet the test of specificity. Grantee has relied on unsupported and
conclusory statements about "developing skills" and "self-improvement,"
and this information falls far short of providing support for the
reasonableness of the costs.
Although the fact that both conferences were held in recreational
areas does not in itself mean that the costs should be disallowed, it
does require a stronger showing of reasonableness. In the circumstances
here, there has been no showing that the conferences bore any reasonable
relationship to the purposes of the federally assisted project.
Conclusion
For the reasons stated above, we uphold PHS's disallowance in the
amount of $1,111.86.
OCTOBER 04, 1983