20 U.S.C. § 1234b — Measure of recovery

Page 920 TITLE 20—EDUCATION § 1234b cipient 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 ac- tion when the recipient receives written no- tice of the Secretary’s action, or (2) remands the decision to the Office. (h) Publication of decisions as final agency ac- tions The Secretary shall publish decisions that have become final agency action under sub- section (g) in the Federal Register or in another appropriate publication within 60 days. (i) Collection amounts and procedures The amount of a preliminary departmental de- cision under subsection (a) for which review has not been requested in accordance with sub- section (b), and the amount sustained by a deci- sion of the Office or the Secretary which be- comes final agency action under subsection (g), may be collected by the Secretary in accordance with chapter 37 of title 31. (j) Compromise of preliminary departmental de- cisions; preconditions; notice requirements (1) Notwithstanding any other provision of law, the Secretary may, subject to the notice re- quirements 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 de- partmental 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 no- tice shall provide interested persons an oppor- tunity 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 ex- pended in a manner not authorized by law more than 5 years before the recipient received writ- ten notice of a preliminary departmental deci- sion. (l) Foregoing of interest during period of admin- istrative 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, § 452, as added Pub. L. 95–561, title XII, § 1232, Nov. 1, 1978, 92 Stat. 2347; amended Pub. L. 100–297, title III, § 3501(a), Apr. 28, 1988, 102 Stat. 350; Pub. L. 103–382, title II, § 250(a), Oct. 20, 1994, 108 Stat. 3926.) Editorial Notes AMENDMENTS 1994—Subsec. (a)(2). Pub. L. 103–382, § 250(a)(1), sub- stituted ‘‘establishing a prima facie case for the recov- ery of funds, including an analysis reflecting the value of the program services actually obtained in a deter- mination of harm to the Federal interest.’’ for ‘‘stating a prima facie case for the recovery of funds.’’ Subsec. (b)(1). Pub. L. 103–382, § 250(a)(2), substituted ‘‘60 days’’ for ‘‘30 days’’. Subsec. (d). Pub. L. 103–382, § 250(a)(3), designated ex- isting provisions as par. (1) and added par. (2). 1988—Pub. L. 100–297 amended section generally, sub- stituting provisions relating to recovery of funds for provisions relating to audit determinations. Statutory Notes and Related Subsidiaries 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. § 1234b. Measure of recovery (a) Amount returned proportionate to extent of harm violation caused to an identifiable Fed- eral interest; reduction; determination of identifiable Federal interest (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 identi- fiable Federal interest includes, but is not lim- ited to, serving only eligible beneficiaries; pro- viding only authorized services or benefits; com- plying with expenditure requirements and condi- tions (such as set-aside, excess cost, mainte- nance of effort, comparability, supplement-not- supplant, and matching requirements); pre- serving the integrity of planning, application, recordkeeping, and reporting requirements; and maintaining accountability for the use of funds. (b) Reduction or waiver of amount based on mitigating circumstances; burden of proof; determination of mitigating circumstances; weight, etc., of written request for guidance (1) When a State or local educational agency is determined to have made an unallowable ex- penditure, or to have otherwise failed to dis- charge its responsibility to account properly for funds, and mitigating circumstances exist, as described in paragraph (2), the judge shall re- duce such amount by an amount that is propor- tionate to the extent the mitigating cir- cumstances caused the violation. Furthermore, the judge is authorized to determine that no re- covery is justified when mitigating cir- cumstances warrant. The burden of dem- onstrating the existence of mitigating cir- cumstances shall be upon the State or local edu- cational agency. (2) For the purpose of paragraph (1), miti- gating circumstances exist only when it would be unjust to compel the recovery of funds be- cause the State or local educational agency— Page 921 TITLE 20—EDUCATION § 1234d (A) actually and reasonably relied upon erro- neous written guidance provided by the De- partment; (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 ju- dicial 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 re- quest for guidance described in paragraph (2)(B) more than 90 days after its receipt, the State or local educational agency that submitted the re- quest shall comply with the guidance received at the earliest practicable time. (5) In order to demonstrate the existence of the mitigating circumstances described in para- graph (2)(B), the State or local educational agency shall demonstrate that— (A) the written request for guidance accu- rately described the proposed expenditure or practice and included the facts necessary for a determination of its legality; and (B) the written request for guidance con- tained a certification by the chief legal officer of the State educational agency that such offi- cer had examined the proposed expenditure or practice and believed the proposed expenditure or practice was permissible under then appli- cable State and Federal law; and (C) the State or local educational agency reasonably believed that the proposed expendi- ture or practice was permissible under then applicable State and Federal law. (6) The Secretary shall disseminate to State educational agencies responses to written re- quests for guidance, described in paragraph (5), that reflect significant interpretations of appli- cable law or policy. (c) Review of written requests for guidance on periodic basis 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. (Pub. L. 90–247, title IV, § 453, as added Pub. L. 95–561, title XII, § 1232, Nov. 1, 1978, 92 Stat. 2349; amended Pub. L. 100–297, title III, § 3501(a), Apr. 28, 1988, 102 Stat. 353.) Editorial Notes AMENDMENTS 1988—Pub. L. 100–297 amended section generally, sub- stituting 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 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. § 1234c. Remedies for existing violations (a) Whenever the Secretary has reason to be- lieve that any recipient of funds under any ap- plicable program is failing to comply substan- tially with any requirement of law applicable to such funds, the Secretary may— (1) withhold further payments under that program, as authorized by section 1234d of this title; (2) issue a complaint to compel compliance through a cease and desist order of the Office, as authorized by section 1234e of this title; (3) enter into a compliance agreement with a recipient to bring it into compliance, as au- thorized by section 1234f of this title; or (4) take any other action authorized by law with respect to the recipient. (b) Any action, or failure to take action, by the Secretary under this section shall not pre- clude the Secretary from seeking a recovery of funds under section 1234a of this title. (Pub. L. 90–247, title IV, § 454, as added Pub. L. 95–561, title XII, § 1232, Nov. 1, 1978, 92 Stat. 2349; amended Pub. L. 100–297, title III, § 3501(a), Apr. 28, 1988, 102 Stat. 354.) Editorial Notes AMENDMENTS 1988—Pub. L. 100–297 amended section generally, sub- stituting provisions relating to remedies for existing violations for provisions relating to cease and desist or- ders. See section 1234e of this title. Statutory Notes and Related Subsidiaries 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. § 1234d. Withholding (a) Discretionary authority over further pay- ments under applicable program In accordance with section 1234c of this title, the Secretary may withhold from a recipient, in whole or in part, further payments (including payments for administrative costs) under an ap- plicable program. (b) Notice requirements Before withholding payments, the Secretary shall notify the recipient, in writing, of— (1) the intent to withhold payments; (2) the factual and legal basis for the Sec- retary’s belief that the recipient has failed to comply substantially with a requirement of law; and (3) an opportunity for a hearing to be held on a date at least 30 days after the notification has been sent to the recipient.