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Intent To Compromise Claim Against the State of Louisiana State Department of Education

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Department of Education.


Notice of intent to compromise claim with request for comments.


The United States Department of Education (Department) intends to compromise a claim against the Louisiana State Department of Education (LSDE) now pending before the Office of Administrative Law Judges (OALJ), Docket No. 01-24-R. Before compromising a claim, the Department must publish its intent to do so in the Federal Register and provide the public an opportunity to comment on that action (20 U.S.C. 1234a(j)).


We must receive your comments on the proposed action on or before December 2, 2002.


Address all comments concerning the proposed action to Jeffrey C. Morhardt, Esq., Office of the General Counsel, U.S. Department of Education, 400 Maryland Avenue, SW., room 6E312, Washington, DC 20202-2110.

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Jeffrey C. Morhardt, Esq. Telephone: (202) 401-6700. If you use a telecommunications device for the deaf (TDD), you may call the Federal Information Relay Service (FIRS) at 1-800-877-8339.

Individuals with disabilities may obtain this document in an alternative format (e.g., Braille, large print, audio tape, or computer diskette) on request to the contact person listed under FOR FURTHER INFORMATION CONTACT.

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Invitation to Comment

We invite you to submit comments regarding this proposed action. During and after the comment period, you may inspect all public comments in room 6E312, FB-6, 400 Maryland Avenue, SW., Washington, DC, between the hours of 8:30 a.m. and 4 p.m., Eastern time, Monday through Friday of each week except Federal holidays.

Assistance to Individuals With Disabilities in Reviewing Comments

On request, we will supply an appropriate aid, such as a reader or print magnifier, to an individual with a disability who needs assistance to review the comments. If you want to schedule an appointment for this type of aid, please contact the person listed under FOR FURTHER INFORMATION CONTACT.


The claim in question arose when the Chief of the Department's Indirect Cost Group, Office of the Chief Financial Officer (Chief) issued a program determination letter (PDL) on June 28, 2001. The PDL demanded a refund of $3,171,296 of funds provided to the LSDE for fiscal years 1992-98 under various Department programs. Specifically, the Chief found that the LSDE had failed to carry out its administrative responsibilities to ensure that the New Orleans Parish School Board (NOPS) complied with applicable Federal statutes and regulations regarding proper accounting for Federal education funds. More specifically, the Chief found that NOPS charged Federal funds for unemployment compensation insurance premiums disproportionately and therefore overcharged Federal funds in relation to the benefits received. Accordingly, the Chief disallowed the percent of the total premium costs for 1992-98 in excess of the amount that should have been paid using Federal funds based upon the percentage of Federal funds and State and local funds.

During settlement discussions, the LSDE submitted substantial documentation to demonstrate that the actual amount of excess unemployment compensation premiums that NOPS charged to Federal programs during fiscal years 1997 and 1998 was $664,990.67, rather than $906,084, as stated in the PDL. The LSDE also submitted documentation to demonstrate that $2,650,010.13 in disallowed costs for fiscal years 1992-96 and part of fiscal year 1997 were barred from recovery by the statute of limitations of the General Education Provisions Act (GEPA). 20 U.S.C. 1234a(k). After conducting a thorough review of this documentation, the Chief has decided to accept the LSDE's documentation, thereby reducing the claim to $280,192.54 for the remainder of fiscal years 1997 and 1998.

The Department proposes to compromise this remaining claim to $250,192.54. Based on litigation risks and the costs of proceeding through the administrative and, possibly, court process for this appeal, the Department has determined that it would not be practical or in the public interest to continue this proceeding. In addition, in light of NOPS' corrective action performed in 1998, there is little or no likelihood of a recurrence of this problem. As a result, under the authority in 20 U.S.C. 1234a(j), the Department has determined that compromise of this claim for $250,192.54 is appropriate. The public Start Printed Page 64103is invited to comment on the Department's intent to compromise this claim. Additional information may be obtained by calling or writing to Jeffrey C. Morhardt, Esq. at the telephone number and address listed at the beginning of this notice.

Electronic Access to This Document

You may view this document, as well as all other Department of Education documents published in the Federal Register, in text or Adobe Portable Document Format (PDF) on the Internet at the following site:​legislation/​FedRegister

To use PDF, you must have Adobe Acrobat Reader, which is available free at this site. If you have questions about using PDF, call the U.S. Government Printing Office (GPO), toll free, at 1-888-293-6498; or in the Washington, DC, area at (202) 512-1530.


The official version of this document is the document published in the Federal Register. Free Internet access to the official edition of the Federal Register and the Code of Federal Regulations is available on GPO Access at:​nara/​index.html

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Program Authority: 20 U.S.C. 1234a(j).

Dated: October 10, 2002.

Jack Martin,

Chief Financial Officer.

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[FR Doc. 02-26398 Filed 10-16-02; 8:45 am]