GAB Decision 142
January 21, 1981 South Dakota Department of Social Services; Docket No.
78-72-SD-HD Ford, Cecilia; Garrett, Donald Settle, Norval
The South Dakota Department of Social Services (State) appealed by
letter dated July 24, 1978 from the June 8, 1978 determination of the
Acting Regional Program Director, Region VIII, Public Services Division,
Office of Human Development Services (Agency), disallowing Federal
financial participation (FFP) in expenditures claimed by the State as
training costs under Title XX of the Social Security Act for the quarter
ended March 31, 1978. The items appealed were: (1) $2,757 claimed for
travel and per diem costs which the Agency found were incurred in
connection with training lasting less than five full days; and (2)
$561.93 claimed for payments to two individuals hired to provide
training at rates which exceeded their rates of pay in their regular
employment. A third item, $300 claimed for supplies purchased by the
Communication Service for the Deaf under a contract with the State
agency to provide training, was disallowed but not appealed. The two
items appealed are discussed separately below.
The record on which this decision is based consists of the State's
applicaton for review, the Agency's response to the appeal, the parties'
responses to an Order to Develop Record issued by the Board Chairman,
and documentation subsequently submitted by the State at the Board's
request. The Agency declined an invitation to respond to the State's
last submission.
Travel and Per Diem Costs
The Agency found that the State had claimed travel and per diem costs
incurred for attendance at training programs which lasted less than five
full work days and disallowed those costs on the ground that 45 CFR
228.84 (1977) allows only education costs for attendance at such
training programs. That section provides, in pertinent part, that --
"(cost) matchable as training expenditures include:
(a)(2) For State agency employees in full-time training programs of
less than eight consecutive work weeks: per diem, travel and
educational costs;
(a)(3) For State agency employees in part-time training programs
(part of work week, evenings, mornings): Education costs."
In its application for review, the State asserted that it was not
advised that the Agency interpreted part-time training as including any
training lasting less than five full days until some fifteen months
after the final 1977 regulation was published, and that it was therefore
unfair for the Agency to take a disallowance based on this
interpretation. Since the regulation was issued in January 1977, the
State's contention is that it did not have notice of the Agency's
interpretation until after the end of the quarter during which the costs
were incurred.
The Agency responded that Section 228.84(a)(3) clearly indicates by
the phrase "part of work week" that "part-time" means less
than five
full days. In support of its position it cited PIQ 77-88, a memorandum
from the Acting Commissioner, Administration for Public Services, to the
Regional Program Director, Region IV, Administration for Public
Services, dated September 14, 1977, which responds to a request by the
latter for clarification of certain portions of the 1977 regulation.
Part-time training is defined in PIQ 77-88 as training which lasts "less
than a full day even though on a recurring basis or less than a full
week, even though including one or more full days."
The State also argued that the Agency's interpretation was unfair in
its application to the State of South Dakota. It noted in particular
"distances involved and travel time," that many State agency offices
are
small and cannot afford to have staff absent for periods as long as five
full days, and that it is difficult to obtain qualified trainers for
that length of time. It also indicated that a shorter training program
might be more effective than one lasting five full days.
The State also contended that the costs claimed in Voucher #148390
($15.00) were not incurred for travel and per diem but rather for
tuition and thus were allowable as an education cost under 45 CFR
228.84(a)(3). It further stated that the costs claimed in Voucher
#144899 ($113.80) were in fact for training lasting five days. It also
argued that a training program which it identified as "Regulatory
Administration & Licensing" in connection with which travel and per
diem
costs were claimed, (amount not identified), lasted five full days,
although the individuals who incurred the travel and per diem costs did
not attend the entire program.
The issue of the allowability of travel and per diem costs for
training lasting less than five full days has been addressed in several
prior Board decisions. Montana Department of Social and Rehabilitation
Services, Decision No. 119, September 29, 1980; Alabama Department of
Pensions and Security, Decision No. 128, October 31, 1980; Oregon
Department of Human Resources, Decision No. 129, October 31, 1980; and
Utah Department of Social Services, Decision No. 130, October 31, 1980
(copies enclosed). In those decisions, the Board found that the
practice of the Agency's regional offices had been to allow travel and
per diem costs incurred with respect to such training, and further, that
it was Agency policy not to hold states to the Agency's interpretation
of "part-time training" as training lasting less than five full days
until the states received actual notice of the interpretation. The
Board found in addition that the Agency's interpretation was clearly
articulated in PIQ 77-88, and sustained the disallowances in those cases
to the extent that they covered periods after each state received actual
notice of PIQ 77-88 or its contents.
In the Order to Develop Record issued in this case, the Agency was
asked to provide documentation showing when and in what manner PIQ 77-88
was communicated to the State, if it was. The Agency responded that
"(while) respondent's regional office in Denver sent all PIQ's to the
states within its jurisdiction as soon as they were received as a matter
of practice, there is no documentation available in the regional office
that will document that fact." (Respondent's Reply to the Board's Order
to Develop Record, p. 1.) This response does not constitute a sufficient
showing that South Dakota received PIQ 77-88 before March 31, 1978, the
close of the quarter in question, however. Accordingly, since there is
no evidence in the record that the State was otherwise informed of the
interpretation prior to March 31, 1978, we reverse the disallowance of
travel and per diem costs in full. In view of this conclusion, we need
not address either the State's contention that certain of the travel and
per diem costs were allowable even if the Board were to determine that
the State was bound by the Agency's interpretation during the period in
question, or its contention that the State was not bound by the Agency's
interpretation on other grounds.
Trainers' Salaries
The State paid to a Mr. Gull and a Mr. Stewart $675 each for four
days of training, or $168.75 per day. The Agency stated that in their
regular positions as college teachers, these individuals were paid
$76.62 and $73.47 per day, respectively, and disallowed the difference
between the daily rate paid by the State and the daily rate normally
earned by each individual, for a total disallowance of $749.24 or
$561.93 FFP. The notification of disallowance cited in support of the
disallowance 45 CFR 228.84(c)(1), which allows FFP in salaries, fringe
benefits, travel and per diem costs incurred by experts outside the
State agency engaged to develop or conduct special programs, but did not
indicate specifically how this regulation governed the rates at which
salaries could be paid.
In its response to the appeal, the Agency did not contend that
Section 228.84(c)(1) specifically limits salaries paid to outside
experts to the salaries paid in their regular employment. It argued,
however, that the services performed by the trainers for the State were
"commensurate with their regular employment," and that common sense
therefore dictated that the salaries received by them in their regular
employment should be determinative of the amount chargeable to Title XX
for training provided by them. It asserted that in the absence of
specific information regarding the duties performed by the individuals
as Title XX training, it could only conclude that payments which were
double their regular rates of pay were unreasonable. The Board's Order
to Develop Record noted that some support for the Agency's approach
might be found in 45 CFR Part 74, Subpart Q, Appendix C, Part II,
Section B.10.a. (made applicable to this grant by 45 CFR 201.5(e)),
which provides that compensation for personal services "will be
considered reasonable to the extent that it is consistent with that paid
for similar work in other activities of the State or local government."
The basis for the State's objection to the disallowance of the
trainers' salaries was not clear in its application for review. In
response to the Order, the State indicated that it agreed that the
trainers' rates of compensation for Title XX training should be limited
to the rates at which they were paid in their regular employment. The
State asserted, however, that the Agency did not but should have
considered the time spent by the trainers in preparing and developing
the training session in determining the rate at which they were paid for
the training. The State noted that 45 CFR 228.84(c)(1) explicitly
refers to "development" of training programs. The Agency, on the other
hand, offered the "suggestion" in its response to the appeal that
"preparation time is also reflected in the daily salary of (a college)
instructor," so that "no additional money would be necessary to
compensate for this time." (Response to appeal, p. 8.) This suggestion
lacks substantial merit, however, since the academic year for which a
college instructor is paid includes nonteaching days which may be
devoted to course development. We therefore agree with the State that
preparation and development time is properly considered, and proceed to
consider the evidence submitted by the State in support of its position.
The State's submission includes a memorandum from the State's former
training specialist which states that the training course in question,
called "Investigative Interviewing," was designed by Mr. Gull and
Mr.
Stewart specifically for State employees. According to the memorandum,
the trainers met several times with the training specialist to identify
training needs and then developed appropriate course materials. The
memorandum further indicates that the amount paid to the two trainers
also covered the cost of reproducing course materials, including the
cost of some clerical support. A letter from one of the trainers states
that "9.75 days were used to develop the workshop" presented by the
trainers.
As noted previously, the total amount paid to each trainer was
divided by the number of days of training (four) to determine the rate
at which he was paid. If the divisor is changed to include an
additional 9.75 days for course development, then the rate of pay would
clearly fall below the daily rate earned by each individual as a college
instructor. Furthermore, if the cost of the course materials themselves
is deducted from the amount paid to each trainer, the rate of pay
becomes lower still.
We note that the information provided by the State consists of
personal recollections of a somewhat general nature unsupported by any
contemporaneous documentation.Although the Board has in the past found
similar evidence unacceptable (see Head Start of New Hanover County,
Inc., DGAB Decision No. 65, Docket No. 78-94, September 26, 1979,), we
accept it here since it appears credible under the circumstances of the
case and the Agency has not challenged it.
Conclusion
For the reasons specified above, we reverse the disallowance appealed
from.
OCTOBER 04, 1983