20 U.S.C. § 1234 — Office of Administrative Law Judges

Page 918 TITLE 20—EDUCATION § 1234 § 212(a)(2), Oct. 20, 1994, 108 Stat. 3913. See note set out under section 1232j of this title. § 1234. Office of Administrative Law Judges (a) Establishment; duties The Secretary shall establish in the Depart- ment of Education an Office of Administrative Law Judges (hereinafter in this subchapter re- ferred to as the ‘‘Office’’) which shall conduct— (1) recovery of funds hearings pursuant to section 1234a of this title, (2) withholding hearings pursuant to section 1234d of this title, (3) cease and desist hearings pursuant to sec- tion 1234e of this title, and (4) other proceedings designated by the Sec- retary. (b) Appointment The administrative law judges (hereinafter ‘‘judges’’) of the Office shall be appointed by the Secretary in accordance with section 3105 of title 5. (c) Employment requirements; chief judge The judges shall be officers or employees of the Department. The judges shall meet the re- quirements imposed for administrative law judges pursuant to section 3105 of title 5. In choosing among equally qualified candidates for such positions the Secretary shall give favorable consideration to the candidates’ experience in State or local educational agencies and their knowledge of the workings of Federal education programs in such agencies. The Secretary shall designate one of the judges of the Office to be the chief judge. (d) Assignment of judges For the purposes of conducting hearings de- scribed in subsection (a), the chief judge shall assign a judge to each case or class of cases. A judge shall be disqualified in any case in which the judge has a substantial interest, has been of counsel, is or has been a material witness, or is so related to or connected with any party or the party’s attorney as to make it improper for the judge to be assigned to the case. (e) Review and evidentiary functions The judge shall review and may require that evidence be taken on the sufficiency of the pre- liminary departmental determination as set forth in section 1234a of this title. (f) Conduct of proceedings; costs and fees of par- ties (1) The proceedings of the Office shall be con- ducted according to such rules as the Secretary shall prescribe by regulation in conformance with the rules relating to hearings in title 5, sections 554, 556, and 557. (2) The provisions of title 5, section 504, relat- ing to costs and fees of parties, shall apply to the proceedings before the Department. (g) Discovery; scope, time, etc.; issue and en- forcement of subpoenas (1) In order to secure a fair, expeditious, and economical resolution of cases and where the judge determines that the discovered informa- tion is likely to elicit relevant information with respect to an issue in the case, is not sought pri- marily for the purposes of delay or harassment, and would serve the ends of justice, the judge may order a party to— (A) produce relevant documents; (B) answer written interrogatories that in- quire into relevant matters; and (C) have depositions taken. The judge shall set a time limit of 90 days on the discovery period. The judge may extend this pe- riod for good cause shown. At the request of any party, the judge may establish a specific sched- ule for the conduct of discovery. (2) In order to carry out the provisions of sub- sections (f)(1) and (g)(1), the judge is authorized to issue subpoenas and apply to the appropriate court of the United States for enforcement of a subpoena. The court may enforce the subpoena as if it pertained to a proceeding before that court. (h) Mediation of disputes The Secretary shall establish a process for the voluntary mediation of disputes pending before the Office. The mediator shall be agreed to by all parties involved in mediation and shall be independent of the parties to the dispute. In the mediation of disputes the Secretary shall con- sider mitigating circumstances and proportion of harm pursuant to section 1234b of this title. In accordance with rule 408 of the Federal Rules of Evidence, evidence of conduct or statements made in compromise negotiations shall not be admissible in proceedings before the Office. Me- diation shall be limited to 120 days, except that the mediator may grant extensions of such pe- riod. (i) Professional personnel; employment, assign- ment, or transfer The Secretary shall employ, assign, or trans- fer sufficient professional personnel, including judges of the Office, to ensure that all matters brought before the Office may be dealt with in a timely manner. (Pub. L. 90–247, title IV, § 451, as added Pub. L. 95–561, title XII, § 1232, Nov. 1, 1978, 92 Stat. 2346; amended Pub. L. 100–297, title III, § 3501(a), Apr. 28, 1988, 102 Stat. 349.) Editorial Notes REFERENCES IN TEXT The Federal Rules of Evidence, referred to in subsec. (h), are set out in the Appendix to Title 28, Judiciary and Judicial Procedure. AMENDMENTS 1988—Pub. L. 100–297 amended section generally, sub- stituting provisions relating to Office of Administra- tive Law Judges for provisions relating to Education Appeal Board. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1988 AMENDMENT Pub. L. 100–297, title III, § 3501(b), Apr. 28, 1988, 102 Stat. 357, provided that: ‘‘(1) Except as provided in paragraph (2), the amend- ments made by this section [enacting sections 1234f to 1234i of this title and amending this section and sec- tions 1232d and 1234a to 1234e of this title] shall be effec- tive 180 days after the date of enactment of this Act [Apr. 28, 1988]. Page 919 TITLE 20—EDUCATION § 1234a ‘‘(2) The amendments made by this part [part D (§ 3501) of title III of Pub. L. 100–297, enacting sections 1234f to 1234i of this title and amending this section and sections 1232d and 1234a to 1234e of this title] shall not apply to any case in which the recipient, prior to the effective date of this part, received a written notice that such recipient must return funds to the Depart- ment.’’ EFFECTIVE DATE Subchapter effective 120 days after Nov. 1, 1978, see section 1261 of Pub. L. 95–561, set out as a note under section 1232c of this title. § 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 coopera- tive agreement, the Secretary shall give the re- cipient written notice of a preliminary depart- mental decision and notify the recipient of its right to have that decision reviewed by the Of- fice 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, in- cluding an analysis reflecting the value of the program services actually obtained in a deter- mination of harm to the Federal interest. The facts to serve as the basis of the preliminary de- partmental decision may come from an audit re- port, an investigative report, a monitoring re- port, 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 no- tice of a preliminary departmental decision and that desires to have such decision reviewed by the Office shall submit to the Office an applica- tion for review not later than 60 days after re- ceipt of notice of the preliminary departmental decision. The application shall be in the form and contain the information specified by the Of- fice. As expeditiously as possible, the Office shall return to the Secretary for such action as the Secretary considers appropriate any prelimi- nary departmental decision which the Office de- termines does not meet the requirements of sub- section (a)(2). (2) In cases where the preliminary depart- mental decision requests a recovery of funds from a State recipient, that State recipient may not recover funds from an affected local edu- cational agency unless that State recipient has— (A) transmitted a copy of the preliminary departmental decision to any affected sub- recipient within 10 days of the date that the State recipient in a State administered pro- gram 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 recipi- ent to demonstrate that it should not be re- quired to return the amount of funds for which recovery is sought in the preliminary depart- mental decision under subsection (a). (c) Time for hearing A hearing shall be set 90 days after receipt of a request for review of a preliminary depart- mental decision by the Office, except that such 90-day requirement may be waived at the discre- tion of the judge for good cause. (d) Review of findings of fact in preliminary de- cision; conclusiveness; remand; new or modi- fied 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 De- partment or the recipient. (e) Time for filing petition for review of prelimi- nary decision Parties to the proceeding shall have 30 days to file a petition for review of a decision of the ad- ministrative 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 deci- sion, the Secretary shall take no collection ac- tion until the decision of the Office upholding the preliminary Department decision in whole or in part becomes final agency action under subsection (g). (2) If a recipient files a timely petition for ju- dicial 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 re- view under paragraph (2) shall not affect the au- thority of the Secretary to take any other ad- verse 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 be- come final agency action 60 days after the re-