[Code of Federal Regulations]
[Title 34, Volume 1]
[Revised as of January 1, 2008]
From the U.S. Government Printing Office via GPO Access
[CITE: 34CFR222.18]

[Page 513-514]
 
                           TITLE 34--EDUCATION
 
              SECONDARY EDUCATION, DEPARTMENT OF EDUCATION
 
PART 222_IMPACT AID PROGRAMS--Table of Contents
 
                            Subpart A_General
 
Sec. 222.18  What amount does the Secretary forgive?

    For an LEA that meets the requirements of Sec. 222.14(a) (timely 
filed forgiveness request) and Sec. 222.14(b) (timely filed information 
and documentation), the Secretary forgives an eligible overpayment as 
follows:
    (a) Forgiveness in whole. The Secretary forgives the eligible 
overpayment in whole if the Secretary determines that the LEA meets--
    (1) The requirements of Sec. 222.17 (undue financial hardship), and 
the

[[Page 514]]

LEA's current expenditure closing balance for the LEA's fiscal year 
immediately preceding the date of its forgiveness request (``preceding 
fiscal year'') is ten percent or less of its total current expenditures 
(TCE) for that year; or
    (2) The manifestly unjust repayment exception in Sec. 222.14(c)(2).
    (b) Forgiveness in part. (1) The Secretary forgives the eligible 
overpayment in part if the Secretary determines that the LEA meets the 
requirements of Sec. 222.17 (undue financial hardship), and the LEA's 
preceding fiscal year's current expenditure closing balance is more than 
ten percent of its TCE for that year.
    (2) For an eligible overpayment that is forgiven in part, the 
Secretary--
    (i) Requires the LEA to repay the amount by which the LEA's 
preceding fiscal year's current expenditure closing balance exceeded ten 
percent of its preceding fiscal year's TCE (``calculated repayment 
amount''); and
    (ii) Forgives the difference between the calculated repayment amount 
and the LEA's total overpayments.
    (3) For the purposes of this section, ``current expenditure closing 
balance'' means an LEA's closing balance before any revocable transfers 
to non-current expenditure accounts, such as capital outlay or debt 
service accounts.

    Example: An LEA that timely requests forgiveness has two 
overpayments of which portions remain owing on the date of its request--
one of $200,000 and one of $300,000. Its preceding fiscal year's closing 
balance is $250,000 (before a revocable transfer to a capital outlay or 
debt service account); and 10 percent of its TCE for the preceding 
fiscal year is $150,000.
    The Secretary calculates the amount that the LEA must repay by 
determining the amount by which the preceding fiscal year's closing 
balance exceeds 10 percent of the preceding year's TCE. This calculation 
is made by subtracting 10 percent of the LEA's TCE ($150,000) from the 
closing balance ($250,000), resulting in a difference of $100,000 that 
the LEA must repay. The Secretary then totals the eligible overpayment 
amounts ($200,000 + $300,000), resulting in a total amount of $500,000. 
The Secretary subtracts the calculated repayment amount ($100,000) from 
the total of the two overpayment balances ($500,000), resulting in 
$400,000 that the Secretary forgives.

(Authority: 20 U.S.C. 7712)

[62 FR 35414, July 1, 1997]