DEPARTMENTAL GRANT APPEALS BOARD
Department of Health and Human Services
SUBJECT: Gila River Indian Community
Docket No. 88-41
Audit Control No. A-09-87-05510
Decision No. 954
DATE: May 11, 1988
DECISION
Gila River Indian Community (Grantee) appealed a determination by
the
Office of Human Development Services (OHDS) disallowing $110,557
with
respect to Grantee's Headstart program for the year ended September
30,
1986. OHDS found that Grantee was in violation of 45 C.F.R.
1305.4
(1978), which requires that at least 90% of children enrolled in
a
Headstart program be from low-income families. The
disallowance
represents the amount allocable to ineligible children beyond
the 10%
allowed to participate in the program.
Similar disallowances for three earlier program years were appealed
by
Grantee. The Board sustained the disallowance in each case.
Gila River
Indian Community, DGAB No. 937, (1988); Gila River Indian
Community,
DGAB No. 339 (1982); Gila River Indian Community, DGAB No. 264
(1982).
The Board concluded that 45 C.F.R. 1305.4 justified the
disallowance,
and that Grantee should have known that a disallowance could be
taken
for failure to comply with the regulation. The Board further
concluded
that ineligible children were properly allocated a proportionate
share
of the program costs since all children benefitted equally in
an
accounting sense from the costs. The Board also found that fixed
costs
were properly allocated to ineligible children, even if such costs
would
have been incurred regardless of the number of children participating
in
the program. In addition, the Board rejected Grantee's argument
that
the disallowance should be offset by the amount of its cash and
in-kind
contributions. The Board found that since such contributions
did not
reduce the amount of federal funds used by Grantee, they could not
be
used to offset the disallowance. In DGAB No. 937, however, the
Board
noted that Grantee's contributions may have covered costs which
could
have been paid for with federal funds, and that OHDS had stated that
it
was willing to pay allowable costs which Grantee did not charge to
the
grant up to the amount of the award from funding made available by
the
disallowance.
The parties agreed that, in view of the disposition of the prior
appeals,
it would be appropriate for the Board to issue a summary
decision in this
appeal which sustained the disallowance. Accordingly,
based on the
reasoning in the prior appeals, we sustain the disallowance
in the amount of
$110,557. OHDS's willingness in DGAB No. 937 to allow
additional costs
not previously charged to the grant would presumably
extend to this case as
well.
______________________ Cecilia Sparks Ford
______________________ Norval D. (John)
Settle
_____________________ Donald F. Garrett Presiding
Board