[Federal Register: October 17, 2002 (Volume 67, Number 201)]
[Page 64102-64103]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]



Intent To Compromise Claim Against the State of Louisiana State 
Department of Education

AGENCY: Department of Education.

ACTION: Notice of intent to compromise claim with request for comments.


SUMMARY: The United States Department of Education (Department) intends 
to compromise a claim against the Louisiana State Department of 
Education (LSDE) now pending before the Office of Administrative Law 
Judges (OALJ), Docket No. 01-24-R. Before compromising a claim, the 
Department must publish its intent to do so in the Federal Register and 
provide the public an opportunity to comment on that action (20 U.S.C. 

DATES: We must receive your comments on the proposed action on or 
before December 2, 2002.

ADDRESSES: Address all comments concerning the proposed action to 
Jeffrey C. Morhardt, Esq., Office of the General Counsel, U.S. 
Department of Education, 400 Maryland Avenue, SW., room 6E312, 
Washington, DC 20202-2110.

FOR FURTHER INFORMATION CONTACT: Jeffrey C. Morhardt, Esq. Telephone: 
(202) 401-6700. If you use a telecommunications device for the deaf 
(TDD), you may call the Federal Information Relay Service (FIRS) at 1-
    Individuals with disabilities may obtain this document in an 
alternative format (e.g., Braille, large print, audio tape, or computer 
diskette) on request to the contact person listed under FOR FURTHER 


Invitation to Comment

    We invite you to submit comments regarding this proposed action. 
During and after the comment period, you may inspect all public 
comments in room 6E312, FB-6, 400 Maryland Avenue, SW., Washington, DC, 
between the hours of 8:30 a.m. and 4 p.m., Eastern time, Monday through 
Friday of each week except Federal holidays.

Assistance to Individuals With Disabilities in Reviewing Comments

    On request, we will supply an appropriate aid, such as a reader or 
print magnifier, to an individual with a disability who needs 
assistance to review the comments. If you want to schedule an 
appointment for this type of aid, please contact the person listed 


    The claim in question arose when the Chief of the Department's 
Indirect Cost Group, Office of the Chief Financial Officer (Chief) 
issued a program determination letter (PDL) on June 28, 2001. The PDL 
demanded a refund of $3,171,296 of funds provided to the LSDE for 
fiscal years 1992-98 under various Department programs. Specifically, 
the Chief found that the LSDE had failed to carry out its 
administrative responsibilities to ensure that the New Orleans Parish 
School Board (NOPS) complied with applicable Federal statutes and 
regulations regarding proper accounting for Federal education funds. 
More specifically, the Chief found that NOPS charged Federal funds for 
unemployment compensation insurance premiums disproportionately and 
therefore overcharged Federal funds in relation to the benefits 
received. Accordingly, the Chief disallowed the percent of the total 
premium costs for 1992-98 in excess of the amount that should have been 
paid using Federal funds based upon the percentage of Federal funds and 
State and local funds.
    During settlement discussions, the LSDE submitted substantial 
documentation to demonstrate that the actual amount of excess 
unemployment compensation premiums that NOPS charged to Federal 
programs during fiscal years 1997 and 1998 was $664,990.67, rather than 
$906,084, as stated in the PDL. The LSDE also submitted documentation 
to demonstrate that $2,650,010.13 in disallowed costs for fiscal years 
1992-96 and part of fiscal year 1997 were barred from recovery by the 
statute of limitations of the General Education Provisions Act (GEPA). 
20 U.S.C. 1234a(k). After conducting a thorough review of this 
documentation, the Chief has decided to accept the LSDE's 
documentation, thereby reducing the claim to $280,192.54 for the 
remainder of fiscal years 1997 and 1998.
    The Department proposes to compromise this remaining claim to 
$250,192.54. Based on litigation risks and the costs of proceeding 
through the administrative and, possibly, court process for this 
appeal, the Department has determined that it would not be practical or 
in the public interest to continue this proceeding. In addition, in 
light of NOPS' corrective action performed in 1998, there is little or 
no likelihood of a recurrence of this problem. As a result, under the 
authority in 20 U.S.C. 1234a(j), the Department has determined that 
compromise of this claim for $250,192.54 is appropriate. The public

[[Page 64103]]

is invited to comment on the Department's intent to compromise this 
claim. Additional information may be obtained by calling or writing to 
Jeffrey C. Morhardt, Esq. at the telephone number and address listed at 
the beginning of this notice.

Electronic Access to This Document

    You may view this document, as well as all other Department of 
Education documents published in the Federal Register, in text or Adobe 
Portable Document Format (PDF) on the Internet at the following site: 
    To use PDF, you must have Adobe Acrobat Reader, which is available 
free at this site. If you have questions about using PDF, call the U.S. 
Government Printing Office (GPO), toll free, at 1-888-293-6498; or in 
the Washington, DC, area at (202) 512-1530.

    Note: The official version of this document is the document 
published in the Federal Register. Free Internet access to the 
official edition of the Federal Register and the Code of Federal 
Regulations is available on GPO Access at: http://frwebgate.access.gpo.gov/cgi-bin/leaving.cgi?from=leavingFR.html&log=linklog&to=http://www.access.gop.gov/nara/index.html

    Program Authority: 20 U.S.C. 1234a(j).
    Dated: October 10, 2002.
Jack Martin,
Chief Financial Officer.
[FR Doc. 02-26398 Filed 10-16-02; 8:45 am]