[Federal Register: September 4, 2001 (Volume 66, Number 171)]
[Page 46267-46268]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]



Office of Elementary and Secondary Education; Intent to Repay to 
the State of Maine Department of Education Funds Recovered as a Result 
of a Final Audit Determination

AGENCY: Department of Education.

ACTION: Notice of intent to award grantback funds.


SUMMARY: Under section 459 of the General Education Provisions Act 
(GEPA) (20 U.S.C. 1234h), the Secretary of Education (Secretary) 
intends to repay to the State of Maine Department of Education (MDE), 
the State educational agency (SEA), an amount equal to 75 percent of 
the principal amount of funds returned to the U.S. Department of 
Education (Department) as the result of final audit determinations. The 
Department's recovery of funds followed an audit disallowance issued by 
the Office of Elementary and Secondary Education under Chapter 1 of 
Title I of the Elementary and Secondary Education Act (ESEA) for the 
period July 1, 1991 through June 30, 1992. The MDE returned $14,476 to 
the Department in settlement of the 1992 audit exception. This notice 
describes the MDE's plan for use of the repaid funds and the terms and 
conditions under which the Secretary intends to make those funds 
available. The notice invites comments on the proposed grantback.

DATES: All comments must be received on or before October 4, 2001.

ADDRESSES: All written comments should be addressed to Dr. Joseph F. 
Johnson, Jr., Director, Compensatory Education Programs, Office of 
Elementary and Secondary Education, U.S. Department of Education, 400 
Maryland Avenue, SW., FOB-6, Room 3W220, Washington, DC 20202-6132.

FOR FURTHER INFORMATION CONTACT: S. Colene Nelson, Compensatory 
Education Programs, Office of Elementary and Secondary Education, U.S. 
Department of Education, 400 Maryland Avenue, SW., FOB-6, Room 3E335, 
Washington, DC 20202-6132. Telephone: (202) 260-0979. Individuals who 
use a telecommunications device for the deaf (TDD) may call the Federal 
Information Relay Service (FIRS) at 1-800-877-8339. Internet address: 
    Individuals with disabilities may obtain this document in an 
alternate format (e.g. Braille, large print, audiotape, or computer 
disk) on request to the contact persons listed in the preceding 


A. Background

    The Department has recovered $14,476 from the MDE in settlement of 
a 1992 audit disallowance under Chapter 1 of Title I of the Elementary 
and Secondary Education Act (Chapter 1) (20 U.S.C. 2701 et seq. 
(1988)). Under Chapter 1, funds were awarded, through SEAs, to local 
educational agencies to improve the achievement of educationally 
deprived children attending high-poverty schools.
    The auditors found that, during the year ending June 30, 1992, the 
salaries of two employees of the MDE's Division of Finance's grants 
management accounting staff were charged in full to the Chapter 1 
program, but they did not spend their entire time on activities 
directly benefiting the Chapter 1

[[Page 46268]]

program. The auditors noted that provisions in the Office of Management 
and Budget (OMB) Circular A-87, Attachment B, section 10(b), required 
the salaries and wages of employees chargeable to more than one grant 
program or other cost objective to be supported by appropriate time 
distribution records. This resulted in questioned costs of $29,484 to 
Chapter 1. The Department upheld the auditors' finding and required the 
MDE to repay the amount of $29,484. The MDE appealed the determination 
and that appeal resulted in an agreement among the parties dated March 
27, 1998 that reduced the questioned costs to $14,476. The State of 
Maine has repaid this amount to the Department.

B. Authority for Awarding a Grantback

    Section 459(a) of GEPA (20 U.S.C. 1234h) provides that, whenever 
the Secretary has recovered program funds following a final audit 
determination, the Secretary may consider those funds to be additional 
funds available for the program and may arrange to repay to the SEA or 
LEA affected by that determination an amount not to exceed 75 percent 
of the recovered funds. The Secretary may enter into this grantback 
arrangement if the Secretary determines that--
    (1) The practices or procedures of the SEA or LEA that resulted in 
the audit determination have been corrected, and the SEA or LEA is, in 
all other respects, in compliance with the requirements of the 
applicable program;
    (2) The SEA has submitted to the Secretary a plan for the use of 
the funds to be awarded under the grantback arrangement that meets the 
requirements of the program, and, to the extent possible, benefits the 
population that was affected by the failure to comply or by the 
misexpenditures that resulted in the audit exception; and
    (3) Use of funds to be awarded under the grantback arrangement in 
accordance with the SEA's plan would serve to achieve the purposes of 
the program under which the funds were originally granted.

C. Plan for Use of Funds Awarded Under a Grantback Arrangement

    Pursuant to section 459(a)(2) of GEPA, the MDE has applied for a 
grantback of $10,857--75 percent of the principal amount recovered by 
the Department--and has submitted a plan for use of the grantback funds 
to meet the special educational needs of educationally deprived 
children in programs administered under Title I, Part A, of ESEA, the 
successor program to Chapter 1.
    According to the plan, the MDE will use the grantback funds under 
Title I to arrange for technical assistance in early literacy 
strategies to staff in schools designated as priority schools or 
schools identified as needing improvement. Specifically, the MDE will 
contract with the Gorham School Department for the purpose of providing 
a distinguished educator to provide the following services to 
identified schools in the State: (1) Presentations on best practices in 
literacy; (2) sessions to facilitate priority school staff as they 
develop plans for school reform in literacy; and (3) training sessions 
on topics related to parent involvement. In addition, the distinguished 
educator will conduct sessions to assist MDE staff in developing 
strategies to implement the Maine Learning Results. The $10,857 in 
grantback funds will be used to fund one-fifth of the distinguished 
educator's salary ($9,500) and travel expenses for site visits 

D. The Secretary's Determination

    The Secretary has carefully reviewed the plan submitted by the MDE. 
Based upon that review, the Secretary has determined that the 
conditions under section 459 of GEPA have been met. These 
determinations are based upon the best information available to the 
Secretary at the present time. If this information is not accurate or 
complete, the Secretary may take appropriate administrative action. In 
finding that the conditions of section 459 of GEPA have been met, the 
Secretary makes no determination concerning any pending audit 
recommendations or final audit determinations.

E. Notice of the Secretary's Intent to Enter Into a Grantback 

    Section 459(d) of GEPA requires that, at least 30 days before 
entering into an arrangement to award funds under a grantback, the 
Secretary must publish in the Federal Register a notice of intent to do 
so, and the terms and conditions under which payment will be made.
    In accordance with section 459(d) of GEPA, notice is hereby given 
that the Secretary intends to make funds available to the MDE under a 
grantback arrangement. The grantback award would be in the amount of 

F. Terms and Conditions Under Which Payments Under a Grantback 
Arrangement Would Be Made

    The MDE agrees to comply with the following terms and conditions 
under which payment under a grantback arrangement would be made:
    (1) The funds awarded under the grantback must be spent in 
accordance with--
    (a) All applicable statutory and regulatory requirements;
    (b) The plan that the MDE submitted and any amendments to that plan 
that are approved in advance by the Secretary, and
    (c) The budget that was submitted with the plan and any amendments 
to the budget that are approved in advance by the Secretary.
    (2) All funds received under the grantback arrangement must be 
obligated by September 30, 2001, in accordance with section 459(c) of 
GEPA and the MDE's plan.
    (3) The MDE will, not later than December 31, 2001, submit a report 
to the Secretary that--
    (a) Indicates that the funds awarded under the grantback have been 
spent in accordance with the proposed plan and approved budget; and
    (b) Describes the results and effectiveness of the project for 
which the funds were spent.
    (4) Separate accounting records must be maintained documenting the 
expenditure of funds awarded under the grantback arrangement.

Electronic Access to this Document

    You may review this document, as well as other Department of 
Education documents published in the Federal Register, in text or 
Portable Document Format (PDF) on the World Wide Web at the following 
site: http://www.ed.gov/legislation/FedRegister 
    To use the PDF you must first have the Adobe Acrobat Reader Program 
with Search, which is available free at the previous site. If you have 
any questions about using the PDF, call the U.S. Government Printing 
Office, toll free, at 1-888-293-6498; or in the Washington, DC area at 
(202) 512-1530.

(Catalog of Federal Domestic Assistance Number 84.012, Educationally 
Deprived Children--State Administration).
    Dated: August 29, 2001.
Susan B. Neuman,
Assistant Secretary for Elementary and Secondary Education.
[FR Doc. 01-22189 Filed 8-31-01; 8:45 am]