GAB Decision 275
March 31, 1982 New Hampshire Department of Health and Welfare; Docket
No. 81-163-NH-CS Ford,Cecilia; Teitz,Alexander Garrett, Donald
The New Hampshire Department of Health and Welfare (State) appealed a
decision by the Director, Office of Child Support Enforcement (Agency),
upholding two disallowances issued by the Regional Representative. The
total of $9,784 represents claims for federal financial participation
(FFP) in training costs indirectly allocated by the State's Division of
Welfare to its Child Support Enforcement program (Title IV-D of the
Social Security Act). The claims were made on Quarterly Statements of
Expenditures for the quarters that ended December 31, 1977 through
December 31, 1980. The Agency's position was that under 45 CFR
304.23(d), FFP is not available for "(education) and training programs
and educational services except direct cost of short term training
provided to IV-D agency staff . . . ." The Agency determined that the
costs in question were unallowable because they were allocated based on
a percentage distribution and not directly charged or identified by
program.
Based on the record in this appeal (which includes a telephone
conference at the end of which both parties stated that they did not
wish to present any additional briefing or evidence), we uphold the
disallowance.
Discussion
The costs claimed were for the salaries, fringe benefits, and travel
of the Staff Development and Training Unit, which included a Chief, an
Assistant Chief, two trainers and a secretary. The Unit is a component
of the Division of Welfare. The costs were part of the Division's
administrative costs, were indirectly allocated to the IV-D program, and
were claimed as training costs. The State admitted that it did not
directly charge training costs to its IV-D grant. During the
conference, the State's representative made a rough guess that this Unit
spent approximately only 20% of its time doing training for the Division
of Welfare. This training consisted of three types: general
orientation, case technician training and social worker training. The
rest of the Unit's time was spent "planning, developing and coordinating
personnel resources." (Statement of State's representative during
conference)
(2) There is no disagreement that administrative costs are generally
allowable and reimbursable on an indirect basis under 45 CFR 304.20.
The substance of the State's argument was that because of the small size
of the Unit and the IV-D program as well as the costs involved, it was
neither cost beneficial nor administratively feasible to attempt to
break out training from administrative costs and charge the former
directly.
The Agency's position was that the regulations explicitly prohibit
payment of FFP for training programs unless they are direct costs of
short term training. The use of cost allocation methods did not assure
that only those costs attributable to short term training would be
charged to the IV-D program.
We agree with the Agency. Some of the costs that the State sought to
charge indirectly to its IV-D program were training costs; the training
costs were unallowable as indirect costs, and the State has refused to
direct charge them. There is a validly promulgated, relevant
regulation, which the State admitted that it was not following. The
State may be correct that it was not cost beneficial to directly charge
training costs, but it has been the Board's position that if a grantee's
action was contrary to a binding federal regulation, then the Board will
not excuse the action because of equitable arguments. See, e.g.,
American Foundation for Negro Affairs, Decision No. 73, December 28,
1979
Conclusion
For the reasons stated above, we uphold the disallowance of $9,784.
OCTOBER 22, 1983