DAB Decision 90
April 28, 1980 Anderson-Oconee Headstart Project, Inc., Anderson, South
Carolina; Docket No. 79-80; Decision No. 90 Coster, Clarence M.; Kelly,
Bernard E. Dell'Acqua, Frank
(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 from a determination by the Acting Director, Grants
Administration Division, Office of Human Development Services, Region
IV, disallowing $38,850 expended in excess of the authorized budget for
its Head Start grant. The Board denied the appeal on the grounds that it
had no authority to direct that unexpended funds in the Handicapped
account be set off against the over-expenditure or to authorize the use
of possible future under-expenditure to offset the over-expenditure
because the Board will not engage in grant administration. The Board
also stated that it had no authority to forgive the over-expenditure
which would be tantamount to the awarding of a supplemental award.
DECISION
By letter dated March 28, 1979, the Acting Director, Grants
Administration Division, Office of Human Development Services (OHDS),
Region IV, notified Anderson-Oconee Headstart Project, Inc. (AOHP) that
there had been an over-expenditure of federal funds of $38,350 in its
Head Start program account and that these "costs in excess of (the)
approved budget (are) not allowable" and would have to be "paid with
cash from non-Federal sources."
AOHP filed a timely application for review by letter dated April 25,
1979. On May 15, 1979, the Executive Secretary acknowledged receipt of
the application and requested copies of the relevant notice of grant
award (3080-I) and audit report (04-66264). These two documents were
provided on May 23, 1979. An Order to Develop the Record was issued by
the Board Chairman on February 14, 1980. The grantee responded to the
Order on March 10, 1980; the Agency was not required to respond and did
not do so.
Statement of the Case
The notification of disallowance itself does not set forth the reasons
for the disallowance in detail hut merely refers the grantee to the
audit report. The audit report states that AOHP operates full-year Head
Start and Handicapped programs in Anderson and Oconee Counties, South
Carolina. For the budget year ended March 31, 1978, according to the
audit report, AOHP was budgeted to receive $643,230 in program funds
from the Office of Child Development (OCD), OHDS, for the Head Start
Full Year/Part Day program. The grantee was budgeted to contribute
$323,560.
The "Statement of Revenues, Expenditures and Changes in Funds Balance"
contained in the audit report shows, under OCD's share of direct costs
of Head Start expenses, that the grantee spent $23,590 more than the
amount of federal funds budgeted in the "fringe benefit" category,
$15,441 in the "food" category, $16,110 in the "other supplies"
category
and $19,401 in the "other" category for a total of $74,542 in
over-expenditures. There is no indication that any of the costs were
otherwise unallowable. The grantee spent $35,692 less than the amount of
federal funds budgeted in four other categories. According to the audit
report,
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there was, therefore, a net of $38,850 in over-expenditures. The audit
report further shows that the grantee contributed and spent $338,106 of
its own funds, thus exceeding the amount originally budgeted for the
non-federal share. The grantee has stated that the non-federal share was
completely composed of in-kind contributions.
It was noted in the Order that the audit report of the Head Start
Handicapped program shows the grantee spent less than the authorized OCD
share of direct costs in the actual budget by $16,206. AOHP stated in
response to the Order that it never requested permission to use excess
funds in its Handicapped program to offset over-expenditures in the Head
Start program.
Grantee's Argument
The grantee admits that there was an "overexpenditure of HEW funds,"
but
blames it on the "ever-increasing costs of running our program, namely
fringe benefits, utilities and food costs." It notes that it budgeted
and received more non-federal matching funds than was required, which it
claims indicates an effort to reduce HEW's burden. AOHP also states
that it is making positive efforts to avoid further over-expenditures.
AOHP claims that it requested additional funds during the year but did
not receive a response frost the regional office. It has not supplied
any documentation to support its claim.
Finally, AOHP states that if "these overexpenditures are sustained,"
it
has no non-federal funds with which to repay the deficit. It has asked
that it be allowed to "use under expenditures from future and prior
years plus any balances remaining in our Handicap account for the year
ended march 31, 1960." AOHP believes that it "could make up this deficit
within five years of the 1979 year-end."
Discussion
AOHP's arguments do not furnish the Board with any substantial reason
upon which to base a decision in its favor. The amount of federal funds
to be made available to the grantee for the budget year in question is
clearly set forth in the notice of grant award issued by the Agency. We
are aware of nothing in the notice of grant award or elsewhere which
could reasonably have led the grantee to believe that any additional
funds would be made available. Program materials issued by the Agency
clearly indicate that the contrary would be the case:
OHD assumes no liability for project costs which exceed the total
amount of Federal funds authorized on the notice of Grant awarded
for that budget period. OHD Grant Administration dual (January 1,
1977), Chapter 1-1-4.
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Even if this Board found in favor of the grantee, there is no relief
that could be granted. This Board has previously stated that it "will
not engage in grant administration by transferrring authorizations from
one account to another, at least in the absence of a showing that the
administering officials arbitrarily refused to make such a transfer."
(Community Action Agency of Memphis and Shelby County, DGAB Docket No.
.76-9, Decision No. 38, July 5, 1977.) Accordingly we would not direct
that the unexpended funds in the Handicapped account be set off against
the over-expenditures in question. It would also be an inappropriate
exercise in grant administration for the Board to authorize the use of
possible future under-expenditures to offset the over-expenditures.
Further, even if the grantee had specifically identified the unexpended
balances from prior Head Start Full Year/Part Day grants which it
requested be used to offset the over-expenditures, it is not clear that
the application of such funds to a subsequent grant project would be
permissible. (Pinellas Opportunity Council, Inc., DGAB Docket No.
79-58, Decision No. 80, February 6, 1980.) In addition, we note that
grantee's contribution in excess of the budgeted non-federal share would
not be available since it was made in-kind. (Yakima Public Schools, DGAB
Docket No. 79-3, Decision No. 81, February 6, 1980.) Finally,
forgiveness of the over-expenditure is not a form of relief within the
Board's authority. The forgiveness of an over-expenditure would be
tantamount to the awarding of a supplemental award. The Board is not
vested with the authority to make an award of grant funds. (Pinellas
opportunity Council, Inc., cited supra.)
Conclusion
For the reasons stated above, the appeal is denied. D11 May 21, 1992