§ 1234a. — Recovery of funds.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 20USC1234a]
TITLE 20--EDUCATION
CHAPTER 31--GENERAL PROVISIONS CONCERNING EDUCATION
SUBCHAPTER IV--ENFORCEMENT
Sec. 1234a. Recovery of funds
(a) Preliminary departmental decision; grounds of determination; notice
requirements; prima facie case; amount of funds recoverable
(1) Whenever the Secretary determines that a recipient of a grant or
cooperative agreement under an applicable program must return funds
because the recipient has made an expenditure of funds that is not
allowable under that grant or cooperative agreement, or has otherwise
failed to discharge its obligation to account properly for funds under
the grant or cooperative agreement, the Secretary shall give the
recipient written notice of a preliminary departmental decision and
notify the recipient of its right to have that decision reviewed by the
Office and of its right to request mediation.
(2) In a preliminary departmental decision, the Secretary shall have
the burden of establishing a prima facie case for the recovery of funds,
including an analysis reflecting the value of the program services
actually obtained in a determination of harm to the Federal interest.
The facts to serve as the basis of the preliminary departmental decision
may come from an audit report, an investigative report, a monitoring
report, or other evidence. The amount of funds to be recovered shall be
determined on the basis of section 1234b of this title.
(3) For the purpose of paragraph (2), failure by a recipient to
maintain records required by law, or to allow the Secretary access to
such records, shall constitute a prima facie case.
(b) Review of preliminary departmental decision; form and contents of
application for review; inadequate preliminary decisions; duties
of recipient to subrecipients after preliminary decision; burden
of proof
(1) A recipient that has received written notice of a preliminary
departmental decision and that desires to have such decision reviewed by
the Office shall submit to the Office an application for review not
later than 60 days after receipt of notice of the preliminary
departmental decision. The application shall be in the form and contain
the information specified by the Office. As expeditiously as possible,
the Office shall return to the Secretary for such action as the
Secretary considers appropriate any preliminary departmental decision
which the Office determines does not meet the requirements of subsection
(a)(2) of this section.
(2) In cases where the preliminary departmental decision requests a
recovery of funds from a State recipient, that State recipient may not
recover funds from an affected local educational agency unless that
State recipient has--
(A) transmitted a copy of the preliminary departmental decision
to any affected subrecipient within 10 days of the date that the
State recipient in a State administered program received such
written notice; and
(B) consulted with each affected subrecipient to determine
whether the State recipient should submit an application for review
under paragraph (1).
(3) In any proceeding before the Office under this section, the
burden shall be upon the recipient to demonstrate that it should not be
required to return the amount of funds for which recovery is sought in
the preliminary departmental decision under subsection (a) of this
section.
(c) Time for hearing
A hearing shall be set 90 days after receipt of a request for review
of a preliminary departmental decision by the Office, except that such
90-day requirement may be waived at the discretion of the judge for good
cause.
(d) Review of findings of fact in preliminary decision; conclusiveness;
remand; new or modified findings
(1) Upon review of a decision of the Office by the Secretary, the
findings of fact by the Office, if supported by substantial evidence,
shall be conclusive. However, the Secretary, for good cause shown, may
remand the case to the Office to take further evidence, and the Office
may thereupon make new or modified findings of fact and may modify its
previous action. Such new or modified findings of fact shall likewise be
conclusive if supported by substantial evidence.
(2) During the conduct of such review, there shall not be any ex
parte contact between the Secretary and individuals representing the
Department or the recipient.
(e) Time for filing petition for review of preliminary decision
Parties to the proceeding shall have 30 days to file a petition for
review of a decision of the administrative law judges with the Office of
the Secretary.
(f) Stay of collection or other adverse action by Secretary against
recipient
(1) If a recipient submits a timely application for review of a
preliminary departmental decision, the Secretary shall take no
collection action until the decision of the Office upholding the
preliminary Department decision in whole or in part becomes final agency
action under subsection (g) of this section.
(2) If a recipient files a timely petition for judicial review under
section 1234g of this title, the Secretary shall take no collection
action until judicial review is completed.
(3) The filing of an application for review under paragraph (1) or a
petition for judicial review under paragraph (2) shall not affect the
authority of the Secretary to take any other adverse action under this
subchapter against the recipient.
(g) Preliminary decision as final agency action
A decision of the Office regarding the review of a preliminary
departmental decision shall become final agency action 60 days after the
recipient receives written notice of the decision unless the Secretary
either--
(1) modifies or sets aside the decision, in whole or in part, in
which case the decision of the Secretary shall become final agency
action when the recipient receives written notice of the Secretary's
action, or
(2) remands the decision to the Office.
(h) Publication of decisions as final agency actions
The Secretary shall publish decisions that have become final agency
action under subsection (g) of this section in the Federal Register or
in another appropriate publication within 60 days.
(i) Collection amounts and procedures
The amount of a preliminary departmental decision under subsection
(a) of this section for which review has not been requested in
accordance with subsection (b) of this section, and the amount sustained
by a decision of the Office or the Secretary which becomes final agency
action under subsection (g) of this section, may be collected by the
Secretary in accordance with chapter 37 of title 31.
(j) Compromise of preliminary departmental decisions; preconditions;
notice requirements
(1) Notwithstanding any other provision of law, the Secretary may,
subject to the notice requirements of paragraph (2), compromise any
preliminary departmental decision under this section which does not
exceed the amount agreed to be returned by more than $200,000, if the
Secretary determines that (A) the collection of any or all or the amount
thereof would not be practical or in the public interest, and (B) the
practice which resulted in the preliminary departmental decision has
been corrected and will not recur.
(2) Not less than 45 days prior to the exercise of the authority to
compromise a preliminary departmental decision pursuant to paragraph
(1), the Secretary shall publish in the Federal Register a notice of
intention to do so. The notice shall provide interested persons an
opportunity to comment on any proposed action under this subsection
through the submission of written data, views, or arguments.
(k) Limitation period respecting return of funds
No recipient under an applicable program shall be liable to return
funds which were expended in a manner not authorized by law more than 5
years before the recipient received written notice of a preliminary
departmental decision.
(l) Foregoing of interest during period of administrative review
No interest shall be charged arising from a claim during the
administrative review of the preliminary departmental decision.
(Pub. L. 90-247, title IV, Sec. 452, as added Pub. L. 95-561, title XII,
Sec. 1232, Nov. 1, 1978, 92 Stat. 2347; amended Pub. L. 100-297, title
III, Sec. 3501(a), Apr. 28, 1988, 102 Stat. 350; Pub. L. 103-382, title
II, Sec. 250(a), Oct. 20, 1994, 108 Stat. 3926.)
Amendments
1994--Subsec. (a)(2). Pub. L. 103-382, Sec. 250(a)(1), substituted
``establishing a prima facie case for the recovery of funds, including
an analysis reflecting the value of the program services actually
obtained in a determination of harm to the Federal interest.'' for
``stating a prima facie case for the recovery of funds.''
Subsec. (b)(1). Pub. L. 103-382, Sec. 250(a)(2), substituted ``60
days'' for ``30 days''.
Subsec. (d). Pub. L. 103-382, Sec. 250(a)(3), designated existing
provisions as par. (1) and added par. (2).
1988--Pub. L. 100-297 amended section generally, substituting
provisions relating to recovery of funds for provisions relating to
audit determinations.
Effective Date of 1988 Amendment
Amendment by Pub. L. 100-297 effective 180 days after Apr. 28, 1988,
but not applicable to recipients receiving written notice to return
funds prior to that date, see section 3501(b) of Pub. L. 100-297, set
out as a note under section 1234 of this title.
Section Referred to in Other Sections
This section is referred to in sections 1234, 1234c, 1234g, 1234h,
7223h of this title.
