§1234b Measure of recovery

Summary

When a school or program used federal education money wrong or failed to keep proper records, it must pay back an amount that matches how much harm was done to the federal program. The payback can be smaller if something outside the recipient’s control helped cause the mistake. “Harm to the federal program” covers things like serving only eligible students, giving only allowed services, following spending rules (for example set-asides, excess cost, maintenance of effort, comparability, supplement‑not‑supplant, and matching), keeping honest planning and records, and showing where the money went. If a State or local educational agency (like a state education department or a school district) claims special reasons for the mistake, a judge must reduce the payback in proportion to those reasons, and can even cancel recovery if the agency proves it. The agency must prove the reasons. Special reasons include relying on wrong written guidance from the Education Department, asking the Department in writing for guidance and getting no answer within 90 days, or relying on a court order. Sending the written request by certified mail proves the Department got it. If the Department answers after 90 days, the agency must follow that guidance as soon as it can. The written request must describe the issue, include necessary facts, and have the state chief legal officer say they thought it was allowed. The Education Department will share important answers and will review requests to see if new guidance is needed.