[Federal Register: March 31, 2011 (Volume 76, Number 62)]
[Page 17843-17844]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]

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Intent To Compromise Claim Against the District of Columbia 
Public Schools

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 District of Columbia Public Schools 
(DCPS) now pending before the Office of Administrative Law Judges 
(OALJ), Docket No. 07-42-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.

DATES: We must receive your comments on the proposed action on or 
before May 16, 2011.

ADDRESSES: Address all comments concerning the proposed action to 
Ronald B. Petracca, Office of the General Counsel, U.S. Department of 
Education, 400 Maryland Avenue, SW., room 6C111, Washington, DC 20202-

FOR FURTHER INFORMATION CONTACT: Ronald B. Petracca. Telephone: (202) 
401-6008. If you use a telecommunications device for the deaf (TDD), 
call the Federal Relay Service (FRS), toll free, at 1-800-877-8339. 
Individuals with disabilities can obtain this document in an accessible 
format (e.g., braille, large print, audio tape, or computer diskette) 
on request to the contact person listed under FOR FURTHER INFORMATION 


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 about this notice in room 6E312, FB-6, 400 Maryland Avenue, 
SW., Washington, DC, between the hours of 8:30 a.m. and 4:00 p.m., 
Washington, DC time, Monday through Friday of each week except Federal 

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 


    On July 12, 2007, the Assistant Secretary for Elementary and 
Secondary Education and the Assistant Secretary for Special Education 
and Rehabilitative Services (collectively, the Assistant Secretaries) 
jointly issued a program determination letter (PDL) seeking to recover 
from DCPS $1,354,679 in funds under Title I, Part A (Title I) of the 
Elementary and Secondary Education Act of 1965 (ESEA), Title I, Part B, 
Subpart 1 of the ESEA (Reading First), Title II, Part A of the ESEA 
(Improving Teacher Quality or ITQ), and Part B of the Individuals with 
Disabilities Education Act (IDEA-B). These funds, based on findings in 
a single audit of DCPS (Audit Control Number 03-04-68025), were 
determined by the Assistant Secretaries to have been expended, during 
fiscal year 2003, in violation of Title I, Reading First, ITQ, and 
IDEA-B. Specifically, the Assistant Secretaries found that DCPS had: 
Failed to maintain appropriate documentation supporting payroll costs 
for Title I, ITQ, and IDEA-B; failed to provide proof of payment for 
various accrued expenses billed to Title I, ITQ, and IDEA-B; failed to 
maintain appropriate documentation for expenditures under ITQ and IDEA-
B; failed to maintain source documentation to support journal entries 
for costs attributed to Title I, ITQ, and IDEA-B; failed to maintain 
adequate documentation to support the acquisition and disposition of 
property obtained with Reading First and Title I funds; and lacked 
adequate supporting documentation for items charged to IDEA-B.
    DCPS filed an Application for Review of this PDL with the Office of 
Administrative Law Judges (OALJ) on September 10, 2007. On October 24, 
2007, the OALJ granted the parties' Joint Motion to Conduct Voluntary 
Discovery, Engage in Settlement Negotiations, and Suspend the 
Procedural Schedule (Joint Motion). Since this Joint Motion was 
granted, DCPS \1\ has presented the Department with extensive 
documentation, not available to the Department at the time the PDL was 
issued, to support the withdrawal from this claim of $571,978 in 
questioned costs. In particular, DCPS provided copies of purchase 
orders, printouts from DCPS' accounting system with transaction detail, 
and copies of corresponding checks to support $556,033 in accrued 
expenses billed to Title I, ITQ, and IDEA-B. In addition, DCPS provided 
printouts from its accounting system with transaction detail and copies 
of corresponding checks demonstrating that expenditures under ITQ and 
IDEA-B totaling $15,945 were, in fact, made. After conducting a 
thorough review of this documentation, the Assistant Secretaries have 
decided to accept DCPS' documentation, thereby reducing the claim to 

    \1\ Since DCPS filed its application for review, the Office of 
the State Superintendent of Education (OSSE) was established as the 
District of Columbia's State educational agency (SEA). Although OSSE 
has been involved in settlement discussions and would necessarily 
have a role in any compromise, for ease of reference and consistent 
with the pleadings before the OALJ, this notice refers to DCPS as 
the relevant party.

    The Department proposes to compromise this remaining claim to 
$675,000. Based on litigation risks, the high percentage of funds being 
recovered (86 percent of the remaining claim), 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 
making this determination, the Department recognizes that DCPS has 
entered into a High Risk Corrective Action Plan (HRCAP) with the 
Department, which includes a plan to address weaknesses in financial 
management, procurement, and property management, among other issues. 
Since entering into the HRCAP, the Department has worked closely with 
DCPS to support DCPS in resolving the issues addressed in the HRCAP, 
including the practices or procedures that gave rise to the 
disallowances in the PDL. Therefore, the Department does

[[Page 17844]]

not anticipate recurrence of violations that gave rise to this PDL. As 
a result, under the authority in 20 U.S.C. 1234a(j), the Department has 
determined that compromise of this claim to $675,000 is appropriate. 
The public is invited to comment on the Department's intent to 
compromise this claim. Additional information may be obtained by 
contacting the person listed under FOR FURTHER INFORMATION CONTACT.
    Electronic Access to This Document: You can view this document, as 
well as all other documents of this Department published in the Federal 
Register, in text or Adobe Portable Document Format (PDF) on the 
Internet at the following site: http://www.ed.gov/news/fedregister. To 
use PDF you must have Adobe Acrobat Reader, which is available free at 
this site.

    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: 

    Program Authority:  20 U.S.C. 1234a(j).

    Delegation of Authority: The Secretary of Education has delegated 
authority to Thomas Skelly, Director, Budget Service, to perform the 
functions and duties of the Chief Financial Officer of the Department 
of Education.

    Dated: March 28, 2011.
Thomas Skelly,
Director, Budget Service.
[FR Doc. 2011-7638 Filed 3-30-11; 8:45 am]