§1234b — Title 20 Education | U.S. Code

Summary

If a recipient spent federal program money they were not allowed to use, they must pay back the amount that matches how much harm their mistake caused to the federal interest in the program. That payback can be lowered if there were mitigating circumstances that also caused the problem. An “identifiable Federal interest” means things like serving only eligible people, giving only authorized services, following spending and matching rules, keeping proper records and reports, and protecting program integrity. When a State or local school agency is involved, a judge must reduce the payback if those mitigating circumstances partly caused the error, and can cancel recovery entirely if the circumstances justify it. The agency must prove the mitigating circumstances. They count only if the agency actually and reasonably relied on wrong written guidance from the Department, or if the agency sent a written request for guidance and the Department did not reply within 90 days, or if the agency relied on a court order. A certified-mail request proves the Department got it. If the Department answers after 90 days, the agency must follow that guidance as soon as possible. The Department will share significant written responses and will review requests to see if new or extra guidance is needed.

Title 20, §1234b

Education — Source: USLM XML via OLRC

(a)(1)A recipient determined to have made an unallowable expenditure, or to have otherwise failed to discharge its responsibility to account properly for funds, shall be required to return funds in an amount that is proportionate to the extent of the harm its violation caused to an identifiable Federal interest associated with the program under which the recipient received the award. Such amount shall be reduced in whole or in part by an amount that is proportionate to the extent the mitigating circumstances caused the violation.

(2)For the purpose of paragraph (1), an identifiable Federal interest includes, but is not limited to, serving only eligible beneficiaries; providing only authorized services or benefits; complying with expenditure requirements and conditions (such as set-aside, excess cost, maintenance of effort, comparability, supplement-not-supplant, and matching requirements); preserving the integrity of planning, application, recordkeeping, and reporting requirements; and maintaining accountability for the use of funds.

(b)(1)When a State or local educational agency is determined to have made an unallowable expenditure, or to have otherwise failed to discharge its responsibility to account properly for funds, and mitigating circumstances exist, as described in paragraph (2), the judge shall reduce such amount by an amount that is proportionate to the extent the mitigating circumstances caused the violation. Furthermore, the judge is authorized to determine that no recovery is justified when mitigating circumstances warrant. The burden of demonstrating the existence of mitigating circumstances shall be upon the State or local educational agency.

(2)For the purpose of paragraph (1), mitigating circumstances exist only when it would be unjust to compel the recovery of funds because the State or local educational agency—

(A)actually and reasonably relied upon erroneous written guidance provided by the Department;

(B)made an expenditure or engaged in a practice after—

(i)the State or local educational agency submitted to the Secretary, in good faith, a written request for guidance with respect to the expenditure or practice at issue, and

(ii)a Department official did not respond within 90 days of receipt by the Department of such request; or

(C)actually and reasonably relied upon a judicial decree issued to the recipient.

(3)A written request for guidance as described in paragraph (2) sent by certified mail (return receipt requested) shall be conclusive proof of receipt by the Department.

(4)If the Secretary responds to a written request for guidance described in paragraph (2)(B) more than 90 days after its receipt, the State or local educational agency that submitted the request shall comply with the guidance received at the earliest practicable time.

(5)In order to demonstrate the existence of the mitigating circumstances described in paragraph (2)(B), the State or local educational agency shall demonstrate that—

(A)the written request for guidance accurately described the proposed expenditure or practice and included the facts necessary for a determination of its legality; and

(B)the written request for guidance contained a certification by the chief legal officer of the State educational agency that such officer had examined the proposed expenditure or practice and believed the proposed expenditure or practice was permissible under then applicable State and Federal law; and

(C)the State or local educational agency reasonably believed that the proposed expenditure or practice was permissible under then applicable State and Federal law.

(6)The Secretary shall disseminate to State educational agencies responses to written requests for guidance, described in paragraph (5), that reflect significant interpretations of applicable law or policy.

(c)The Secretary shall periodically review the written requests for guidance submitted under this section to determine the need for new or supplementary regulatory or other guidance under applicable programs.

Notes & Related Subsidiaries

Editorial Notes

Amendments

1988—Pub. L. 100–297 amended section generally, substituting provisions relating to measure of recovery for provisions relating to withholdings. See section 1234d of this title.

Statutory Notes and Related Subsidiaries

Effective Date

of 1988 AmendmentAmendment 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.

§1234b Measure of Recovery