UNITED STATES DEPARTMENT OF EDUCATION
WASHINGTON, D.C. 20202

APPLICATION OF

THE NEW YORK STATE
DEPARTMENT OF EDUCATION,

Applicant.

Docket No. 90-70-R

Recovery of Funds Proceeding

CN:02-83152

DECISION

Appearances:
Michael Brustein, Esq., and Kristin E. Hazlitt, Esq., Brustein & Manasevit, for the New York State Department of Education.

Lynette A. Charboneau, Esq., and Ronald Petracca, Esq., Office of the General Counsel, for the Assistant Secretary for Special Education and Rehabilitative Services and the Assistant Secretary for Vocational and Adult Education, U.S. Department of Education.

Before:
John F. Cook, Chief Administrative Law Judge

TABLE OF CONTENTS

I. PROCEDURAL BACKGROUND (4)

II. ISSUES (5)

III. LIST OF EXHIBITS (6)

A. THE ASSISTANT SECRETARIES' EXHIBITS (6)

B. NYSED'S EXHIBITS (7)

IV. FINDINGS OF FACT AND OPINION (11)

A. STIPULATIONS OF FACT (11)

B. FINDINGS OF FACT AS TO CERTAIN GENERAL ISSUES BASED ON THE PARTIES' PROPOSED FINDINGS AND RESPONSES (14)

C. OPINION AND ADDITIONAL FINDINGS OF FACT (23)

1. New York's PAR System and Time Distribution Records (23)

2. VEA and Perkins Funded Employees in Dispute (32)

a. Salaries of employees conceded by NYSED (33)

b. Salaries of employees attributed to PAR code 160 (34)

c. Salaries of employees attributed to PAR codes 106, 306, and 152 (38)

d. Salaries of employees attributed to PAR codes 400, 407, 416, and 417 (43)

e. Salaries of employees attributed to PAR code 000 (52)

f. Conclusions as to VEA funded employees in dispute (55)

3. EHA-B Funded Employees in Dispute (55)

a. Salaries of employees conceded by NYSED (56)

b. EHA-B and the Chapter 1 Handicapped program (57)

c. Employees in Division of Program Monitoring (61)

d. Ben Birdsell, Janice Pecora, Joseph Zabinski, Theresa Smith, Evelyn Vido, Ruth Strait, and Deborah Ames (69)

e. Doris Godfrey (74)

f. Christine Kuzmak (75)

g. Elwin McNamera (77)

h. James Harrison (80)

i.C onclusions as to EHA-B funded employees in dispute (81)

4. Equitable Offset (81)

a. VEA and Perkins Act (81)

b. EHA-B (111)

c. Conclusion (126)

V. CONCLUSIONS OFLAW (126)

VI. DETERMINATIONS AS TO THE PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW (127)

VII. ORDER (127)

APPENDIX A (128)

I. PROCEDURAL BACKGROUND.

On August 27, 1990, a notice of preliminary departmental decision (PDD) was issued by the Assistant Secretary for Vocational and Adult Education and the Assistant Secretary for Special Education and Rehabilitative Services (hereinafter, the "Assistant Secretaries") to the New York State Education Department (NYSED).

On September 25, 1990, an Application for Review was received from NYSED. On October 12, 1990, a Notice of Acceptance of Jurisdiction was issued by the tribunal. On October 22, 1990, NYSED filed a Motion for Waiver of the requirements of 20 U.S.C. 1234a(c) and 34 C.F.R. § 81.39 (1) as to the scheduling of the submission of evidence to occur within 90 days of the receipt of the Application for Review and a Request for Mediation. On October 23, 1990, the Assistant Secretaries filed a Response agreeing to the Waiver of the 90-Day Rule and to the request for Mediation.

The proceedings were stayed for mediation in November of 1990. About six months later the parties agreed to terminate the mediation process. An order was issued amending the briefing schedule.

Briefs, proposed exhibits, and a joint stipulation were filed by the parties. NYSED requested an evidentiary hearing; however, the Assistant Secretaries took the position that such a hearing was unnecessary. It was then necessary that the tribunal make a determination pursuant to § 81.6 as to whether an evidentiary hearing was needed to resolve a material factual issue in dispute. A Joint Statement as to Issues of Fact and Law was filed on April 13, 1992. NYSED submitted a Statement of Proposed Findings of Fact, on May 15, 1992, and filed an Amended Statement of Proposed Findings on June 16, 1992. On June 19, 1992, the parties filed a Stipulation as to the Authenticity and Admissibility of Exhibits. The Assistant Secretaries filed a response to NYSED's Amended Statement of Proposed Findings of Fact on July 16, 1992. A Statement of the Proposed Findings of Fact was filed by the Assistant Secretaries on July 20, 1992. On August 6, 1992, NYSED filed a response to the Assistant Secretaries' Proposed Findings of Fact.

After the Proposed Findings of Fact were filed by each party it became clear that a material factual dispute required an evidentiary hearing. In November of 1992, the tribunal suggested to the parties that a hearing be scheduled for January 1993; however, counsel for the parties were not available during that period. Thereafter, on January 4, 1993, the parties filed a Joint Scheduling Motion with the tribunal requesting that the hearing begin on Martb 9, 1993. The judge granted the motion on January 6, 1993.

An evidentiary hearing was held in Albany, New York, from March 9-10, 1993.

An oral argument was held in Washington, D.C., on August 18, 1993.

During the course of the oral argument, it became evident that some issues in regard to the application of the doctrine of equitable offset to the vocational education portion of this proceeding warranted supplemental research and discussion by the parties. Therefore, a procedural schedule was agreed upon. Thereafter, counsel for both parties requested extensions of time, and the last memorandum was filed by NYSED on December 30, 1993.

II. ISSUES.

A.Has NYSED met its burden of proof by proving the allowability of the disallowed Vocational Education Act (VEA) and Education of the Handicapped Act, Part B (EHA-B) personnel costs in dispute?

1. Is New York's Program Accountability Reporting (PAR) System an appropriate system of time and accounting for charging personnel costs to Federal Programs?

2. As to each individual disallowed personnel cost has :liere been adequate proof as to specific applicable PAR codes alone, or in combination with other PAR codes, or other external evidence sufficient to demonstrate that each disputed salary cost is allowable?

B. Does the doctrine of equitable offset apply in this instance?

1. Is NYSED correct in asserting that since the issue of New York's PAR system and the doctrine of equitable offset have been decided in prior, identical cases with the same parties, the doctrine of collateral estoppel applies here since NYSED claims that the Assistant Secretaries are relitigating the issue?

2. Can NYSED offset any of the disallowed vocational education costs by the amount of salaries previously paid from State funds for vocational education costs in order to reduce its audit liability? 3.How much of the offset which was allowed in the PDD should NYSED receive for EHA-B costs in view of the reduced period of time in dispute following the Stipulation of the Parties?

4. What additional costs, if any, may be used to offset the disallowed EHA-B costs?

III. LIST OF EXHIBITS.

A. THE ASSISTANT SECRETARIES' EXHIBITS. 2

Exhibit [Ex.] E-1. State of New York, Statewide Compliance Audit of Federal Programs Under Provisions of the Single Audit Act of 1984, For the Period of April 1, 1985 through March 31, 1986, issued March 2, 1987 (audit control number 02-83152).

Ex. E-2. Stipulation, Application of the New York State Department of Education, Dkt. No. 90-70-R, U.S. Dep't of Educ.) (July 22, 1991).

Ex. E-3. Computation of Amounts of EHA-B Funds Remaining in Dispute.

Ex. E-4. Application of Escambia Countv Board of Education, Dkt. No. 89-9-R, U.S. Dep't of Educ., (Dec. 29, 1989).

Ex. E-5. Appeal of Fort Valley State college, Dkt. No. 21- (196)-85, U.S. Dep't of Educ. (June 5, 1987).

Ex. E-6. Appeal of Government of Guam, Dkt. No. 30-(162)- 84, U.S. Dep't of Educ. (Decision of the Secretary), (Nov. 21, 1986).

Ex. E-7. Response of Thomas E. Sheldon, New York Executive Deputy Commissioner of Education, to the Assistant Secretaries' Request for More Information, May 7, 1990.

Ex. E-8. Grant Awards under the EHA-B Program and under the Chapter 1 Handicapped Program, to the New York State Education Department for Fiscal Years 1985 and 1986.

Ex. E-9. Summary of Questions and Answers, Appendix B to Notice of Final Rulemaking, Carl D. Perkins Vocational Education Act, 50 Fed. Reg. 33295 (Aug. 16, 1985).

Ex. E-10. Appeal of the State of Wyoming, Dkt. No. 16- (191)-85, U.S. Dep't of Educ. (Dec. 14, 1987), appeal filed, No. 88-1419 (10th Cir. Feb. 16, 1988).

Ex. E-11. Letter from Assistant Secretaries Betsy Brand and Robert Davila to Thomas Sobol of NYSED, dated April 9, 1990.

Ex. E-12. Letter from Thomas Sheldon of NYSED to Assistant Secretaries Betsy Brand and Robert Davila.

Ex. E-13. Appeal of the State of Wyoming, Dkt. No. 16-(191)- 85, U.S. Dep't of Educ. (Dec. 14, 1987), appeal filed, No. 88- 1419 (10th Cir. Feb. 16, 1988).

Ex. E-14. Appeals of State of West Virginia, Dkt. No. 13- (28)-76, U.S. Dep't of Health, Education and Welfare, Title I Audit Hearing Board (Decision) (Feb. 21, 1978); aff'd sub nom. West Virgina v. Commissioner of Education, No. 79-1338, slip op. at 3 (4th Cir. Nov. 4, 1980) (per curiam).

B. NYSED'S EXHIBITS.

Ex. A-1. Preliminary Departmental Decision dated August 27, 1990.

Ex. A-2. Appeal letter of the New York State Education Department dated September 24, 1990.

Ex. A-3. Appeal of New York Initial Decision, Dkt. No. 26- 226-86.

Ex. A-4. Appeal of New York Supplemental Decision After Remand, Dkt. No. 26-226-86.

Ex. A-5. PAR codes Manual (relevant year codes and complete 1981 manual).

Ex. A-6. Consolidated Appeals of the Florida Department of Education, Dkt. Nos. 29-293-88 and 33-297-88.

Ex. A-7. Program Accountability Reporting System Managers Handbook.

Ex. A-8. Employee Time Sheet.

Ex. A-9. Organizational Chart.

Ex. A-10. NYSED Vocational Education State Plan.

Ex. A-11. Affidavit of James Kadamus.

Ex. A-12. Performance Evaluation of Carolyn Barbuto.

Ex. A-13. Performance Evaluation of Virginia Kirby.

Ex. A-14. Performance Evaluation of Judith Corman.

Ex. A-15. Performance Evaluation of George Kawas.

Ex. A-16. Performance Evaluation of Robert DeFabio.

Ex. A-17. Performance Evaluation of Frances Collins.

Ex. A-18. Performance Evaluation of Corinne Wells.

Ex. A-19. Performance Evaluation of Iona Mirsky. Ex.A-20.Performance Evaluation of Doreen Jones Ryan.

Ex. A-21. Affidavit of Doreen Jones Ryan. Ex.A-22.Affidavit of James Stratton. Ex.A-23.Performance Evaluation of James Stratton. Ex. A-23a. Performance Evaluation of Suzanne Spear.

Ex. A-24. Performance Evaluation of Christine Brooks.

Ex. A-25. The New York State Plan - "Helping Children with Handicapping Conditions in New York State." Ex. A-26. Contemporaneous Memorandum from Ann Getman regarding use of PAR codes 203 and 054.

Ex. A-27. Affidavit of Gabriel Coppola.

Ex. A-28. Affidavit of Hannah Flegenheimer.

Ex. A-29. Affidavit of Lawrence Gloeckler.

Ex. A-30. Affidavit of Frank Hermon.

Ex. A-31. Affidavit of Carol Kendall.

Ex. A-32. Performance Evaluation of Gabriel Coppola.

Ex. A-33. Performance Evaluation of Theodore Kurtz.

Ex. A-34. Performance Evaluation of Peter Trippi.

Ex. A-35. Performance Evaluation of Jacquelyn King.

Ex. A-36. Performance Evaluation of Noel Rios.

Ex. A-37. Performance Evaluation of Kathryn Hargis.

Ex. A-38. Performance Evaluation of Mary Ess.

Ex. A-39. Performance Evaluation of Susan Scott.

Ex. A-40. Performance Evaluation of Frank Hermon.

Ex. A-41. Performance Evaluation of Carol Kendall.

Ex. A-42. Performance Evaluation of Janice Pecora.

Ex. A-43. Performance Evaluation of Joseph Zabinski.

Ex. A-44. Performance Evaluation of Evelyn Vido.

Ex. A-45. Performance Evaluation of Ruth Strait.

Ex. A-46. Affidavit and Performance Evaluation of Christine Kuzmak.

Ex. A-47. Performance Evaluation of Elwin McNamera.

Ex. A-48. Rate-setting Unit Payroll Registers and Summary.

Ex. A-49. Employees' Performance Evaluations far Rate- setting Unit.

Ex. A-50. Rome School for the Deaf Payroll Registers and Summary.

Ex. A-51. Employees' Performance Evaluations for the Rome School for the Deaf.

Ex. A-52. Batavia School tar the Blind Payroll Registers and Summary.

Ex. A-53. Employees' Performance Evaluations for the Batavia School far the Blind.

Ex. A-54. PAR Fund Source Report.

Ex. A-55. PAR Effort Report.

Ex. A-56. PAR Effort Report for Employees in Question Divided by Pay Period.

Ex. A-57. PAR Effort Report for Period Not Barred by the Statute of Limitations.

Ex. A-58. PAR Effort and Fund Source Report Limited to Employees Using Codes 180-190.

Ex. A-59. Letter of May 1, 1990 from Thomas B. Neveldine to William Tyrrell.

Ex. A-60. Response letter of June 15, 1990 from Judy A. Schrag to Thomas B. Neveldine.

Ex. A-61. Performance evaluation of Iona Mirsky.

Ex. A-62. Employee activity record form of Iona Mirsky.

Ex. A-63. Employee activity record form of Judith Corman.

Ex. A-64. Employee activity record form of Doreen Jones Ryan.

Ex. A-65. Appendix E, summarizing amount of effort allocable to VEA for non-VEA line item employees.

Ex. A-66. Appendix documenting amount of offset for individual NYSED employees.

Ex. A-67. Affidavit of Michael DiVirgilia with attachments.

Ex. A-68. Notification of Grant Award.

Ex. A-69. Financial Status Report.

IV. FINDINGS OF FACT AND OPINION.

A. STIPULATIONS OF FACT. 3

1. On August 27, 1990, the Assistant Secretaries issued a program determination letter (PDL), demanding repayment of $1,472,620 of funds awarded to the NYSED pursuant to Part B of the Education of the Handicapped Act, 20 U.S.C. §§ 1401, 1411- 1420 (1982) (hereinafter ("EHA-B"); the Vocational Education Act, 20 U.S.C. § 2301 et seq. (1982) (hereinafter "VEA") ; and the Carl D.Perkins Vocational Education Act, 20 U.S.C. § 2301 et seq. (1988) (hereinafter "Perkins Act").

2. The Assistant Secretaries' demand of $1,472,620 was based on the claim (Findings 5(a) and (b), Attachment A, of the audit report (audit control number 02-83152)] that the NYSED charged to the EHA-B, VEA, and Perkins Act grants unallowable salaries, benefits, and indirect costs of State employees (consisting of $943,716 of EHA-B funds, and $528,904 of VEA and Perkins Act funds). The $943,716 recovery sought for unallowable EHA-B charges reflected a credit of $218,705 for salaries of employees who worked on EHA-B activities during the period in dispute and whose effort reports were coded to the EHA-B program but whose salaries were not charged to the EHA-B grant.

3. Evidence submitted by the NYSED after the commencement of this appeal demonstrates that:

a. $292,298.15 of the claim for refund for EHA-B salary costs under Findings 5(a) and (b), plus $147,084.43 in fringe benefits and indirect costs, is barred from recovery by the statute of limitations set forth in section 452(k) of the General Education Provisions Act, as amended, 20 U.S.C. § 1234a(k) (1988) (GEPA). The salaries of Ralph Costanzo, Maurice Olsen, Rosalyn Reich, and Inderjit Barone are entirely removed from dispute by the application of the statute of limitations .

b. The disallowed salaries of the following employees charged to the EHA-B are allowable: Carol Weiss, Fred DeMay, Michael Plotzker, Ray L'Heureaux, Waverlyn Peters, Ralph Giordano, Laura Sahr, Marie Cianca.

c. The amount of EHA-B funds disallowed for the salary of William Brenton should be reduced from $57,925 to $1,708.

4. Evidence submitted by the NYSED after the commencement of this appeal demonstrates that:

a. $264,716.71 of the claim for refund of VEA and Perkins Act costs under Findings 5 (a) and (b), including salaries, indirect costs, and fringe benefits, is barred from recovery by the statute of limitations set forth in section 452(k) of the GEPA. The salaries of Marilyn Graham, Richard Haner, Linda Greenberg, and Suzanne Levin are entirely removed from dispute by the application of the statute of limitations.

b. The disallowed salary of Willard Daggett charged to the VEA and the Perkins Act grants ($24,339.13 after the application of the statute of limitations) is allowable, plus related benefits and indirect costs.

c. The amount of VEA and Perkins Act funds disallowed for the salary of Ruth Milczarek should be reduced from $9,578.80 (after application of the statute of limitations) to $852 (plus benefits and indirect costs) .

5. The Assistant Secretary for Vocational and Adult Education's claim for recovery is reduced to a new total of $214,482.51 of VEA and Perkins Act funds based on the application of the statute of limitations and the NYSED's documentation. The parties agree that the $214,482.51 remaining in dispute for VEA and Perkins Act funds is not barred from recovery by the statute of limitations.

6. The original claim for recovery by the Assistant Secretary for Special Education and Rehabilitative Services in the PDL was $943,716. Of this amount, $619,888.35 has been removed from dispute by application of the statute of limitations and NYSED's documentation. The parties agree that the amount remaining in dispute for EHA-B funds is not barred from recovery by the statute of limitations.

7. The appendices to this Stipulation indicate, employee by employee, the amount of EHA-B funds (Appendix A) and VEA and Perkins Act funds (Appendix B) remaining in dispute after the NYSED is given full credit for: 1) the salaries of those employees the Assistant Secretaries find were fully or partially allowable, and 2) the salaries barred from recovery by the statute of limitations, but before consideration of the offset credited in the PDL in reference to the EHA-B portion of the disallowance.

APPENDIX A

EHA-B Funds Remaining in Dispute.

APPENDIX B

VEA and Perkins Act Funds Remaining in Dispute

B. FINDINGS OF FACT AS TO CERTAIN GENERAL ISSUES BASED ON THE PARTIES' PROPOSED FINDINGS AND RESPONSES. 5

1. NYSED's Program Accountability Reporting (PAR) System produces an equitable distribution of time and effort in accordance with the EDGAR cost principles.

2. James Kadamus is the Assistant Commissioner for the Office at Occupational and Continuing Education.

3. Lawrence Gloeckler is the Assistant Commissioner for the Office for Education of Children with Handicapping Conditions.

4. The New York State Education Department (NYSED) appealed a Preliminary Departmental Determination (PDD) pursuant to section 452 of the General Education Provisions Act. Applicant's Exhibit 2 (A-2).

a. The PDD is contained in the August 27, 1990 program determination to Thomas Sobol, New York State Commissioner of Education from Betsy Brand, Assistant Secretary for Vocational and Adult Education, and Robert R. Davila, Assistant Secretary for Special Education and Rehabilitative Services, U.S. Department of Education (Assistant Secretaries). A-1.

b. The PDD demanded a recovery of the salaries of NYSED employees that were charged to grants awarded under the Vocational Education Act of 1963, as amended (VEA), 20 U.S.C. § 2301 et seg. (1982), and the Carl D. Perkins Vocational Education Act (Perkins Act), 20 U.S.C. § 2301 et seg. (1988), and to a grant awarded under the Education of the Handicapped Act (EHA-B), 20 U.S.C. §§ 1411-1420. A-1 and A-2.

c. The PDD demand for recovery was based on a audit finding that NYSED charged the VEA, Perkins Act, and EHA-B grants for unsupported payroll cost. A-1-1.

d. The PDD disallowed a total of $1,472,620, consisting of $528,904 of VEA and Perkins Act funds, and $943,716 of EHA-B funds. A-1-10.

e. The alleged amount of unsupported EHA-B salaries (before the fringe benefits and indirect costs were added) requested in recovery was reduced by $218,705 to reflect the salaries during the period of the audit for employees who worked on activities which could have been, but were not, charged to the EHA-B as State administrative expenses. A-1-9 to 10.

f. The following table, which is set out on page 10 of the PDD (A-1-10) summarizes the amount of disallowed costs (including applicable fringe benefits and indirect costs):

g. Budgetary data was the primary basis for charging salaries to the VEA, Perkins Act, and EHA-B grants at issue. A-1-2.

5. NYSED's Program Accountability Reporting (PAR) system produces the most reliable and contemporaneous evidence of the amount of time that NYSED employees spent working on various cost objectives and grant programs during the period at issue in this case. A-3-4.

a. The PAR systein generates two types of reports, the PAR Fund Report and the PAR Effort Report. Assistant Secretaries' Exhibit 1 at page 27 (E-1-27). The PAR system also produces a broad range of reports including fund and effort reports broken down by divisions or bureaus as well as by varying time periods.

b. The PAR Fund Report indicates the source of funds used to pay an employee.

c. The PAR Effort Report indicates the amount of time employees spent working on various programs or cost objectives. E-1-27.

6. The PAR Effort Report constitutes at least the primary element of NYSED's time distribution system. A-3-4.

a. The PAR Effort Report for the period at issue in the PDD is contained in A-55.

b. Generally, the PAR Effort Report is a summary of the Employee Activity Record Forms completed by individual employees. A-5-14; A-7-1 and 2.

i. Generally, the Employee Activity Record Forms were maintained by each of NYSED's employees other than certain high level supervisors. A-5-16.

ii. Generally, the Employee Activity Record Forms cover two two-week pay periods, which consist of 10 working days that last 7.5 hours each. A-5-19; A-7-8 .

iii. Generally, each employee whose salary remains in dispute was required to accurately complete Employee Activity Record Forms for the entire period in dispute in the PDD and sign them. A-5-16.

iv. Generally, each employee's supervisor was required to review, approve, and sign the completed Employee Activity Record Forms. A-5-15, 16, 19, and 21; A-7-l (original page number of the document).

v. Generally, each supervisor was responsible for ensuring that his employees used the correct PAR codes on the completed Employee Activity Forms. A-5-15.

7. On January 31, 1991, NYSED generated the "PAR Effort Report for employees in Question Divided by Pay Period" contained in A-56. A-56-1 and the summary page on top.

a. Because of differences in rounding or for other reasons, the amounts in the final column labeled "cost of effort" in A-56 do not agree exactly with the amounts for each PAR code that the Assistant Secretaries disallowed based on the PAR Effort Report contained in A-55. A-1-5 through 10.

b. The parties prorated the cost of effort amounts in A-55 based on the codes and hours in A-56 to determine the amounts in dispute after the statute of limitations is applied. E-2-6 and generally. Compare generally A-55 and A-56.

i. The parties relied on the "cost of effort" amounts in A-55 to determine the amounts in dispute after the statute of limitations is considered. E-2-6 and generally. Compare generally A-55 and A-56.

ii. The parties relied on the codes and hours in A-56 to determine the amounts in dispute after the statute of limitations is considered. E-2-6 and generally. Compare generally A-55 and A-56.

c. The differences in the "cost of effort" amounts between A-55 and A-56 are not significant for purposes of applying the statute of limitations to the salaries of employees charged to the EHA-B grant. E-2-5 and generally. Compare generally A-55 and A-56.

d. NYSED employees used three-digit codes to describe the grant programs upon which they were working. A-7-2.

e. The PAR system has two types of three-digit codes: (1) program codes; and (2) general codes. A-5-15.

f. General codes are used for employee activities which cannot be assigned to a specific program area. A-5-15.

i. Codes 949 through 951 and 953 are general codes for use by supervisors and are restricted to administrative direction relating to more than one program. A-5-26.

ii. Code 952 is a general code related to clerical support and is restricted to staff working on so many different programs that specific identification of each is not reasonable. A-5-26.

iii. Code 997 is a general code that has been created to keep track of hours of employee effort for which no documentation has been received, or is received too late or with too many errors for timely keypunching. A-7-9.

iv. Code 999 is a general code restricted to time charged to the following activities: leave accruals, other authorized duties (civil service training, exams, etc.) performed during normal working hours, holidays, all on-the-job training. A-5-26.

g. Proqram codes are used by NYSED employees when they are working in a specific program area. A-5-15

8. Subsequent to NYSED's filing its application for review, the parties, by stipulation, agreed to reduce the amount of funds in dispute in this case: the amount of VEA and Perkins Act program funds in dispute was reduced to $214,482.51. Later, as a result of a partial withdrawal of claim this was reduced to $209,347.58.

9. The amount of VEA and Perkins Act salaries in dispute is $139,267.95.

a. To this amount, an indirect cost rate of 19.4 percent, or $27,017.98, and a fringe benefit rate of 30.92 percent, or $43,061.65, must be added. E-2-6; E-1-28.

b. Consequently, a total of $209,347.58 of salaries, including indirect costs and fringe benefits, is in dispute for the VEA and Perkins Act program. E-2-6.

10. The PAR Fund and Effort Reports maintained by NYSED show that NYSED charged a total of $433,616.79 of salaries to the EHA- B grant in dispute. E-3.

a. To this amount, an indirect cost rate of 19.4 percent, $56,330.81, and a fringe benefit rate of 30.92 percent, $89,780.86, must be added. E-3; E-1-28.

b. Consequently, a total of $436,476.69 of salaries, indirect costs, and fringe benefits, charged to the EHA-B program are in dispute. E-3.

11. The program codes for the VEA and the Perkins Act are 180- 190. A-5-2 and 8.

12.Program codes 160, 281-285, 400, 407, and 415-417 are allowable program codes to charge to the VEA or Perkins Act grant in limited circumstances. A-3-6 at paragraphs 8 and 11; A-5-2, 3 7, 8, 11, 23, and 24; A-1-7.

a. Program codes 160, 281-285, 400, 407, and 415-417 are allowable program codes to charge to the VEA or Perkins Act grant when they are used to indicate activities necessary to meet the requirement of the VEA or the Perkins Act to coordinate the VEA or Perkins Act grant programs with other programs. A-3-6 at paragraphs 8 and 11; A-1-7.

b. Program codes 160, 281-285, 400, 407, and 415-417 are allowable program codes to charge to the VEA or Perkins Act grant if they are used in conjunction with codes 180-190. A-3-6 at paragraphs 8 and 11; A-1-7.

c. Program codes 160, 281-285, 400, 407, and 415-417 are allowable program codes to charge to the VEA or Perkins Act grant if they are used by an employee who performs authorized programmatic activities to coordinate the VEA or Perkins Act grant programs with other programs. A-3-6 at paragraphs 8 and 11; A-1-7.

d. Program codes 281-285 are program codes used to designate activities related to separate sections of the Appalachian Regional Commission (ARC) Act. A-5-10.

i. Only activities necessary to coordinate the VEA and Perkins Act programs with those conducted under the ARC may be funded from a Perkins Act grant. See A-3-6 at paragraphs 8 and 11.

ii. The cost of an employee's effort attributed to implementing the ARC, rather than coordinating the VEA and Perkins Act programs with the ARC program, is not an allowable cost to fund from the Perkins Act grant. See A-3-6 at Paragraphs 8 and 11; A-1-7.

e. Program code 400 is a program code used to designate activities related to a program under the Comprehensive Employment and Training Act (CETA). A-5-9.

i. The VEA authorized coordination of the VEA program and the programs conducted under the CETA. 20 U.S.C.§ 2307(b) (5) (1982). A-3-6 at paragraphs 8 and 11.

ii. Only activities necessary to coordinate the VEA program with those conducted under the CETA may funded from a VEA grant. A-3-6 at paragraphs 8 and 11; A-1-7. 20 U.S.C. 2307(b) (5) (1988).

iii. The cost of an employee's effort attributed to implementing the CETA, rather than coordinating the VEA program with the CETA program, is not an allowable cost to fund from the VEA grant. A-3-6 at paragraphs 8 and 11; A-1-7. 20 U.S.C. § 2307(b) (5) (1988).

f. Program code 407 is a program code used to designate activities related to the State Occupational Information Coordinating Committee (SOICC). A-3-5.

i. The VEA and Perkins Act authorized the National Occupational Information Coordinating Committee (NOICC). 20 U.S.C. § 2391(b) (1982); 20 U.S.C. § 2422(b) (1988). A-3-6 at paragraphs 8 and 11.

ii. The VEA and Perkins Act required each State to establish a State occupational information coordinating committe with funds awarded by NOICC. 20 U.S.C. § 2391 (b) (1982); 20 U.S.C. § 2422 (b) (1988). A-3-6 at Paragraphs 8 and 11.

iii. Only activities necessary to coordinate the VEA and Perkins Act programs with the activities funded under the grant award from NOICC may be funded from a Perkins Act grant. A-3-6 at paragraphs 8 and 11; A-1-7. 20 U.S.C. § 2391(b) (1982); 20 U.S.C. § 2422(b) (1988).

iv. The cost of an employee's effort attributed to implementing the SOICC requirements, rather than coordinating the VEA and Perkins Act programs with the SOICC activities, is not an allowable cost to fund from the Perkins Act grant. A-3-6 at paragraphs 8 and 11; 20 U.S.C. § 2422(b) (1988).

g. Program codes 415-417 are program codes used to designate activities related to separate titles of the Job Training Partnership Act (JTPA). A-5-3. Program codes 415 and 417 also are used to designate activities related to the New York State Occupational Retraining and Reemployment Act (ORRA). A-5-3.

i. The Perkins Act authorized joint planning and coordination of the Perkins Act program and the programs conducted under the JTPA. 20 U.S.C. § 2323(b) (10) (1988). A-3-6 at paragraphs 8 and 11.

ii. Only activities necessary to coordinate the Perkins Act program with those conducted under the JTPA may be funded from a Perkins Act grant. A-3-6 at paragraphs 8 and 11; A-1-7. 20 U.S.C. § 2323(b) (10) (1988).

iii. The cost of an employee's effort attributed to implernenting the JTPA, rather than coordinating the Perkins Act program with the JTPA program, is not an allowable cost to fund from the Perkins Act grant. A- 3-6 at paragraphs 8 and 11; A-1-7. 20 U.S.C. § 2323(b) (10) (1988).

h. Code 160 designates activities related to the Adult Education Act (AEA) . The Perkins Act authorized joint planning and coordination of the Perkins Act program and the programs conducted under the AEA.

13. Program codes 180-190 and 160, 281-285, 400, 407, and 415- 417 are allowable program codes to charge to the VEA or Perkins Act grant.

a. Code 091 is a program code used to designate activities related to the State leadership program under section 224, title II-B of the Elementary and Secondary Education Act (ESEA). A-5-7.

b.Code 106 is a program code used to designate activities related to the career education program under section 406, title IV of the ESEA. A-5-22.

c. Code 152 is a program code used to designate sex desegregation activities under title IV of the Civil Rights Act (CRA). A-5-2.

d.Code 176 is a program code used to designate activities related to the Indochina Refugee Children Act. A-5-23.

e. Code 203 is a program code used to designate activities related to administration of the EHA-B. A-5-3.

f. Code 216 is a program code used to designate activities related to the mathematics and science program (higher and professional education) under title II of the Education for Economic Security Act (EESA). A-5-3.

g. Code 261 is a program code used to designate activities related to the Puerto Rican Cultural Service under the Emergency School Aid Act (ESAA). A-5-23.

h. Code 265 is a program code used to designate activities related to title VI of the Higher Education Act (HEA). A-5-23.

i. Code 306 is a program code used to designate activities related to the breakfast program and sections 7 and 11 of National School Lunch Act (NSLA). A-5-3.

14 .The program codes for the EHA-B are 202-210. A-5-3.

15. a. Code 001 is a program code used to designate activities related to the National Telecommunications and Information Administration (RRF) program. A-5-2.

b. Code 051 is a program code used to designate activities related to administration of Chapter I of the Education Consolidation and Itnprovement Act (ECIA or Chapter 1) program. A-5-2.

c. Code 052 is a program code used to designate activities related to the Chapter 1 LEA program. A-5-2.

d. Code is 054 is a program code used to designate the Chapter 1 Handicapped program. A-5-2.

e. Code 055 is a program code used to designate activities related to the Chapter 1 Migrant program. A-5-2.

f. Code 102 is a program code used to designate activities related to the ESEA IV-B program. A-5-7.

g. Code 160 is a program code used to designate activities related to the AKA XIII program. A-5-2.

h. Code 165 is a program code used to designate activities related to the Library Services and Construction Act (LSCA) I program. A-5-2.

i. Code 167 is a program code used to designate activities related to the LSCA III program. A-5-2.

j. Code! 180 is a program code used to designate the VEA Section 102d, Subpart I program. A-5-8.

k. Code 183 is a program code used to designate the VEA Part C Research program. A-5-8.

l. Code 184 is a program code used to designate the VEA Subpart IV program code. A-5-8.

m. Code 186 is a program code used to designate the VEA Title II-A Basic Grant program. A-5-8.

n. Code 214 does not appear in the list of PAR program codes .

o. Code 413 is a program code used to designate the CETA Title II One Per Cent Linkage program. A-5-9.

16. Code 000 was officially designated as the code for "all other State programs."

a. Code 000 is technically a program code, rather than a general code. A-5-2.

b. Code 000 does not assign employee effort to a specific Federal or State program. A-3-6 at paragraph 12; A-5-2 and 15.

c. Code 000 is allowable as a charge to the EHA-B program and the VEA and Perkins Act program if the employee has not used any codes which are unallowable as charges to the EHA-B program and the VEA and Perkins Act program. A-1-7 and 8; A-3-6 at paragraphs 5 and 12.

C. OPINION AND ADDITIONAL FINDINGS OF FACT.

1. New York's PAR System and Time Distribution Records.

The Assistant Secretaries argue that NYSED charged to the federal grants at issue employees' salaries that were not supported by the required time distribution records. The Assistant Secretaries contend that NYSED was required to maintain time distribution records to support the salaries of employees who worked on activities chargeable to different grant programs, and that NYSED's records do not support the salaries of employees charged to the federal grant at issue. Assistant Secretaries' Brief at 16-28.

NYSED asserts that the amounts charged for employee salaries, indirect costs, and fringe benefits were properly allocated to the federal grant programs through the PAR system. NYSED claims that the PAR system satisfies all relevant regulations as has been previously determined by the Secretary of Education. Moreover, according to NYSED, the doctrine of collateral estoppel precludes the recovery of funds because the Secretary has explicitly ruled that New York's PAR system for charging salaries of State administrative employees satisfies the Education Department General Administrative Regulations (EDGAR). NYSED Initial Brief at 10-18. NYSED insists that its employees' salaries were supported by the required time distribution records. NYSED Reply Brief at 20-22.

The Education Department General Administrative Regulations (EDGAR) include 34 C.F.R. Part 74, Appendix C, entitled "Principles for Determining Costs Applicable to Grants and Contracts With State and Local Governments". Appendix C "sets forth principles for determining the allowable costs of programs administered by State and local governments under grants from and contracts with the Federal Government. . . ." 34 C.F.R. Part 74, Appendix C, Part I, A, 1 (1985). Appendix C further states that "[t]hese principles will be applied in determining costs incurred by State and local governments under Federal grants and cost reimbursement type contracts (including subgrants and subcontracts) except those with publicly financed educational institutions subject to Appendix D to this part." 34 C.F.R. Part 74, Appendix C, Part I, B, 1 (1985). Accordingly, these regulations apply to the instant case.

EDGAR states that to be allowable under a grant program, these costs must "[b] e necessary and reasonable for proper and efficient administration of the grant program, be allocable thereto under these principles, and, except as specifically provided herein, not be a general expense required to carry out the overall responsibilities of State or local governments." 34 C.F.R.Part 74, Appendix C, Part I, C, 2, a (1985).

As NYSED points out, "A cost is allocable to a particular cost objective to the extent of benefits received by such objective." 34 C.F.R. Part 74, Appendix C, Part I, C, 2, a (1985). "Where an allocation of joint cost will ultimately result in charges to a grant program, an allocation plan will be required as prescribed in section J." 34 C.F.R. Part 74, Appendix C, Part I, C, 2, C (1985). Section J states that the allocation plan should contain the following:

a. The nature and extent of services provided and their relevance to the federally sponsored programs.

b. The items of expense to be included.

c. The methods to be used in distributing cost.

34 C.F.R. Part 74, Appendix C, Part I, J, 2 (1985).

Regarding the ability of State and local governments to charge these costs to federal grant programs, 34 C.F.R. Part 74, Appendix C, Part II, B, 10, b (1985) states as follows:

Payroll and distribution of time. Amounts charged to grant programs for personal services, regardless of whether treated as direct or indirect costs, will be based on payrolls documented and approved in accordance with generally accepted practice of the State or local agency. Payrolls must be supported by time and attendance or equivalent records for individual employees. Salaries and wages of emplovees chargeable to more than one grant program or other cost objective will be supported by appropriate time distribution records. The method used should produce an equitable distribution of time and effort.

(emphasis added).

This regulation requires amounts charged to grant programs for personal services to be based on documented and approved payrolls. These payrolls must be supported by time and attendance or equivalent records for individual employees. The regulation also requires that salaries of employees chargeable to more than one grant program must be supported by "appropriate time distribution records". Finally, the method of time distribution records used should produce an equitable distribution of time and effort. In addition, the regulation implies that salaries of employees that are chargeable to only one grant program do not need to be supported by time distribution records. These important principles must be borne in mind when examining NYSED's salary charges and related time distribution ion records.

As the Assistant Secretaries note, Section 435(b) (5) of the General Education Provisions Act (GEPA) requires that "the State will use fiscal control and fund accounting procedures that will ensure proper disbursement of, and accounting for, Federal funds paid to the State under each program."

20 U.S.C. § 1232d(b) (5). This requirement is codified at § 76.702(1985).

The Assistant Secretaries further direct this tribunal to section 437(a) of GEPA, which requires recipients of federal funds to "keep records which fully disclose the amount and disposition by the recipient of those funds, the total cost of the activity for which the funds are used, the share of that cost provided from other sources, and such other records as will facilitate an effective audit." 20 U.S.C. § 1232f(a). Other financial management requirements are set forth in § 74.61 (1985).

Furthermore, § 76.700 requires a State that receives federal funds to comply with the State plan and applicable statutes, regulations, and approved applications. The State must use federal funds in accordance with those statutes, regulations, plan, and applications. § 76.700 (1985).

GEPA states that in any proceeding before the Office of Administionrationive Law Judges (OALJ) the burden shall be upon the grant recipient to demonstrate that it should not be required to return the amount of funds for which recovery is sought in the preliminary departmental decision (PDD). 20 U.S.C § 1234a(b) (3) (1993). This requirement is contained in the regulations at § 81.30 (1992), which also requires the recipient to present its case first. Accordingly, in the instant case, NYSED bears both the burden of production and the burden of persuasion.

Both the OALJ and the predecessor to OALJ, the Education Appeals Board (KAB), have held that time distribution records are mandatory when employees have responsibility for more than one program.

In Application of Escambia County Board of Education, Dkt. No. 89-9-R, U.S. Dep't of Educ. (December 29, 1989), the tribunal held that six pages of after-the-faction travel reports "are sketchy records at best and fall short of what is called for by Part II. B.10.b of Appendix C of Part 74." Escambia at 13.

The judge went on to state:

The Education Appeal Board (EAB) and the Secretary of Education have indicated that after-the-fact evidence can be considered to substantiate costs disallowed in a Final Letter of Determination (FLD). However, the EAB has rejected after-the-fact affidavits that are highly conclusory, vague and that do not provide specific information on time distribution. Appeal of Fort Vallev College, No. 21(190)85, upheld in Fort Vallev College v. Bennett 853 F. 2d 862 (11th Cir. 1988); [sic] Appeal of the Board of School Commissioners of Mobile County, No. 1(176)85, (Education Appeal Board February 17, 1987). After-the-fact records must be credible and relate specifically to the time spent by the employees. Appeal of Guam, No. 30(162)84, (Sec. Decision, Nov. 21, 1986).

In the Fort Valley case, it was held that an institution that fails to comply with the regulatory payroll requirements may retain its Title III funds if it can demonstrate. by alternative, equivalent, or contemporaneous documentation that the expenditures were appropriate.

Escambia at 13.

NYSED used the Program Accountability Reporting (PAR) system, which performed several functions, including the following:

1. collecting "effort" information for each employee by specific program areas and work activities;

2. collecting payroll information for each employee by source of funding;

3. combining this information with information on employee organizational unit assignments;

4. producing a series of reports which summarize employee funding and "effort" at the different management levels of the New York State Education Department;

5. serving administrative staff and program managers as a basic tool in their budgeting, managing and accounting for NYSED staff resources.

Ex. A-7.

Under the PAR system, employees were required to record daily on an "Employee Activity Record" the amount of time they spent on various work activities. The PAR system used three digit codes to identify these work activities. PAR codes 001 to 798 were program codes that were used to identify all of the specific program activities performed by NYSED personnel. Although technically a program code, code 000 ("all other State programs") was used to report time spent on any State program that had not been assigned its own unique program code. Ex. A-5- 2.The PAR system also contained general codes 949-953 and 999. PAR code 999 ("Miscellaneous") was restricted to four categories: 1)time charged to leave accruals; 2) time used for other authorized duties (such as Civil Service training, exams, etc.) during normal working hours; 3) holidays; and 4) all on-the-job training and continuing education during normal working hours. Ex. A-5-6. Code 997 is a general code that was created to keep track of hours of employee effort for which no documentation has been received, or is received too late or with too many errors for timely keypunching. Ex. A-7-9.

Based upon these records compiled by State employees, the PAR system created two types of reports. The PAR Fund Report, contained in Ex. A-54, listed each NYSED employee by organizational unit, along with PAR codes identifying the source of that employee's funding. The PAR Fund Report also identified the amount paid from each funding source for each employee. The PAR Effort Report, contained in Ex. A-55, listed each NYSED employee by organizational unit, along with PAR codes identifying the program activities worked on by that employee. The PAR Effort Report also identified the cost of the effort allocated to each code by each employee.

As to the issue of whether or notion NYSED has provided appropriate time distribution records, the Department of Education (ED) has previously issued two decisions addressing New York's PAR system. In Appeal of the State of New York, Dkt. No. 26(226)86, U.S. Dep't of Education (EAB Decision) (January 14, 1988), and the Final Decision of the Secretary on (March 27, 1988) , 6 the EAB found the following:

3. This EAB Panel finds that New York's Performance Accountability Reporting (PAR) system is a useful and informative personnel accounting system which satisfactorily meets the EDGAR requirements and provides both a suitable method of cost allocation and (where required) a time distribution record. . . .

Initial New York at 4.

Despite conceding that the EAB found that the PAR system provided a suitable method of cost allocation, 7 the Assistant Secretaries argue that the EAB did not accept NYSED's argument that the PAR system constituted a "cost allocation plan", as described in 34 C.F.R. Part 74, Appendix C, Part I, J, 1 (1985), such that all salaries documented by the PAR Effort Report are by that fact alone allowable costs of the federal grant to which they were charged. While the tribunal agrees that the EAB did notion hold that all salaries documented by the PAR Effort Report are by that fact alone allowable costs of the federal grant to which they were chargedf the tribunal disagrees with the Assistant Secretaries' claim that the EAB did not accept New York's argument that the PAR system constituted a "cost allocation plan" as described in 34 C.F.R. Part 74, Appendix C, Part I, J, 1 (1985). Finding 3 of the Initial New York decision states clearly that the EAB Panel found that the PAR system "provides . . . a suitable method of cost allocation". Initial New York at 4.

In Appeal of the State of New York, Dkt. No. 26(226)86, U.S. Dep't of Educ. (EAB Supplemental Decision After Remand) (June 27, 1989), and the Final Decision of the Secretary (August 29, 1989) , 8 the EAB stated the following:

This EAB Panel believes that the chief purpose of the EDGAR cost accounting regulation is to assure that federal educational grant funds are spent for the purposed intended by Congress, in frugal or reasonable amounts and in a manner that permits a subsequent, effective audit of the expenditures. We have already ruled that New York's PAR accounting system satisfactorily meets EDGAR requirements and provides an appropriate method of cost allocation and (where required) a time distribution system for personnel involved in VEA program activities. (See Paragraph 3 of the Secretary's Final Decision of May 27, 1988.) Using New York's approved PAR accounting system, ED's auditors in this action determined that certain "non- line-item" New York employees . . . performed services allocable to the VEA grant during F.Y. '82 in the amount of $530,195.

It is our opinion that EDGAR regulations provide for the allocation and obligation of federal educational grant funds when the services are performed for VEA intended purposes, NOT upon the initial charging or budgeting of such costs. . . .

New York Remand at 3-4 (emphasis added).

While the tribunal considers the PAR Effort Report generally to be the best evidence of how the employees spent their time, it is not the only evidence, nor is it always the most reliable. At the hearing, Michael DiVirgiho, the Chief of the Bureau of Fiscal Management for NYSED, testified that there were many opportunities for mistakes to be introduced into the PAR reports, including employees writing down incorrect codes, transposition, and data entry mistakes. Mr. DiVirgilio testified that in fact mistakes were made. Hearing Tr. at 30-31, 39. Therefore, the tribunal will accept other evidence in addition to the PAR Effort Report.

In addition, in Consolidated Appeals of the Florida Department of Education, Docket Nos. 29(293)88 & 33(297)88, U.S. Dep't of Education (EAB Decision) (June 26, 1990), and the Final Decision of the Secretary (Sept. 10, 1990), the EAB and the Secretary held that Florida's documentary evidence was relevant to the issue of work performed by various State employees. Florida at 7-14. This evidence, accepted by the EAB, included the following:

1. the official position descriptions detailing the responsibilities and duties

2. time and attendance records

3. "Position Fiiriding Report for Quarterly Certification", reflecting the employee's name, position number, funding source, percentage of time paid by funding source, and time period covered

4. the Supervisor's certification of the time distribution

5. the official organizational placement of the employee in the State bureaucracy

Florida at 8. See also Id. at 31, 39.

The official position descriptions accepted in the Florida case correspond to the official position descriptions and performance evaluations submitted by NYSED in the instant case. The time and attendance records accepted in the Florida decision correspond to the PA' Effort Report, the Employee Activity Record Forms, and the payroU registers and summaries submitted by NYSED here. The "Position Funding Report for Quarterly Certification" accepted in Florida corresponds to the PAR Fund Report submitted in the present case. The supervisors' certifications accepted in Florida correspond to the after-the-fact affidavits executed by supervisors and submitted by NYSED here. The official organizational placement charts accepted in Florida correspond to the organizational placement charts offered by NYSED in the instant case.

In addressing the Assistant Secretaries' objection to after- the-fact affidavits executed by supervisors in the Florida case, the EAB stated:

The use of later affidavits, however, is not categorically precluded in all circumstances . . . . The fact that the affidavits were not given until years later goes to their weight as evidence rather than to their admissibility. . . .

Florida at 31. The EAB found that the affidavits in the Florida case were credible and useful evidence. This tribunal will also accept the after-the-tact affidavits executed by supervisors and submitted by NYSED in the case at bar.

Here, NYSED has also submitted the PAR Codes Manual (Ex. A- 5), and the Program Accountability Reporting System Managers Handbook (Ex. A-7). The PAR Codes Manual describes New York's PAR system and lists the specific programs identified by three- digit codes. The Program Accountability Reporting System Managers Handbook further explains the PAR system. Both of these exhibits explain the PAR Fund and Effort Reports, the three-digit PAR codes used by NYSED employees, and other aspects of the PAR system used by New York. Both of these exhibits address the issue as to which federal grant programs the NYSED employees whose salaries are in dispute actually worked on. Accordingly, the tribunal finds that both of these exhibits are relevant evidence.

Exhibit A-10 contains the NYSED Vocational Education State Plan. Exhibit A-25 contains the Helping Children with Handicapping Conditions in New York State Plan. Each of these State plans further clarifies the meaning of the organizational placement charts and elucidates the duties and responsibilities of the NYSED employees whose salaries are in issue. Therefore, the tribunal finds that both of these exhibits are relevant evidence.

Relating to the admissibility and weight of this evidence, the EAB concluded as follows:

This Panel concludes that the documentation provided by Appellant herein is relevant to prove the actual performance of duties by the etnployees in question. The documentation and other relevant evidence will be discussed and evaluated in Part VI of this decision with respect to each position. At this point we merely conclude that Appellant's documentation is relevant evidence, not only of work assigned but also of work performed.

Florida at 13-14.

In the instant case, the tribunal adopts the ruling in Florida. Specifically, this tribunal finds that the position descriptions and performance evaluations, the PAR Reports, the Employee Activity Record Forms, the payroll registers and summaries, the after-the-fact affidavits executed by supervisors, the organizational placement charts, the PAR Codes Manual, the Program Accountability Reporting System Managers Handbook, the NYSED Vocational Education State Plan, the Helping Children with Handicapping Conditions in New York State Plan, and the testimony elicited at the hearing are relevant evidence as to the issue of whether NYSED employees actually worked on the federal grant programs (VEA, Perkins, or EHA-B) to which their salaries were charged. The documentation and other relevant evidence will be discussed and evaluated throughout this decision with respect to each position.

Finally, NYSED contends, at pages 14-18 of its initial brief, that the doctrine of collateral estionoppel, also known as issue preclusion, 9 applies to the current proceeding. In In the Matter of Career Education. Inc., Docket No. 91-17-ST, U.S. Dep't of Education (August28, 1992), this tribunal held the following:

Under the doctrine of issue preclusion, once an issue is actually and necessarily determined by a court of competent jurisdiction, that determination is conclusive in a subsequent proceeding based on a different cause of action involving a party to the prior litigation.

Career at 25-26. 10

While this is a subsequent proceeding based on a different cause of action, both the U.S. Department of Education and NYSED were parties to the prior litigation in the Initial New York decision and the New York Remand. Therefore, issues that were actually and necessarily decided by the EAB Panel and the Secretary in those two cases are binding upon both the U.S. Department of Education and NYSED in the present case.

Furthermore, under the doctrine of issue preclusion, findings from Consolidated Appeals of the Florida Department of Education, Dkt. Nos. 29-293-88 & 33-297-88, U.S. Dep't of Educ. (EAB Decision) (June 26, 1990), and the Final Decision of the Secretary (September 10, 1390) are binding on the Assistant Secretaries, as representatives of the U.S. Department of Education.

The findings of the EAB and the Secretary in the Initial New York, New York Remand, and Florida cases will be discussed throughout this decision with respect to each position.

2. VEA and Perkins F'mded Employees in Dispute.

The Assistant Secretaries claim that the salary costs in dispute charged to the VEA and Perkins Act grants are unallowable because the salaries of employees attributed to PAR codes 160, 106, 306, 152, 400, 407, 416, 417, and 000 are not allowable. Assistant Secretaries' Brief at 28-46.

NYSED contends that the ernployee charges to the VEA grant were proper, based upon the codes charged to the VEA grant and an employee-by-employee analysis of VEA allocations. NYSED Initial Brief at 18-27; NYSED Reply Brief at 22-27.

a. Salaries of employees conceded bv NYSED.

Initially, the tribunal notes that NYSED, both in its briefs (see Appendix C to NYSED's Initial Brief) and through its proposed findings of fact as well as its response to the Assistant Secretaries' proposed findings of fact, has apparently conceded that all or part of the salaries of twelve of the VEA and Perkins funded employees in dispute are not properly allocable to the VEA These salaries and the amounts are as follows:

Accordingly, the tribunal finds that these salaries were not properly allocable by NYSED to the VEA and therefore should be refunded to the Department. See Initial New York at 8 (findings 15 and 16).

b. Salaries of employees attributed to PAR code 160.

NYSED claims that the charges to PAR code 160 (Adult Education Act) made by Carolyn Barbuto, Corinne Wells, Virginia Kirby, and Frances Collins were properly allocable to the VEA because these employees were responsible for vocational and adult education coordination. NYSED Initial Brief at 23; NYSED Reply Brief at 23-25. The Assistant Secretaries contend, that the salaries of these employees attributed to PAR code 160 are not allowable. Assistant Secretaries' Brief at 29-34.

The PDD disallowed $364.00 of the salary costs of Carolyn Barbuto that were charged to the VEA and Perkins Act grants. Ex. A-1-7.The stipulation filed by the.parties indicated that none of the $364.00 disallowed in the PDD for Ms. Barbuto's salary is barred from recovery by the statute of limitations. Ex. E-2-4, 6. NYSED's PAR Effort Report attributes the effort for this $364.00 to program code 160. Ex. A-55-284; A-56-75. PAR code 160 denotes the Adult Education Act. Ex. A-5-2.

The PDD disallowed $445.00 of the salary costs of Corinne Wells that were charged to the VEA and Perkins Act grants. Ex. A-1-7.The stipulation filed by the parties with the OALJ indicated that none of the $445.00 disallowed in the PDD for Ms. Wells' salary is barred from recovery by the statute of limitations. Ex. E-2-6. NYSED's PAR Effort Report attributes the effort for this $445.00 to program code 160. Ex. A-55-284; A-56-77.

The PDD disallowed $606.00 of the salary costs of Virginia Kirby that were charged to the VEA and Perkins Act grants. Ex. A-1-7.The stipulation filed by the parties with the OALJ indicated that none of the $606.00 disallowed in the PDD for Ms. Kirby's salary is barred from recovery by the statute of limitations. Ex. E-2-4, 6. NYSED's PAR Effort Report attributes the effort for this $606.00 to program code 160. Ex. A-55-283; A-56-72.

The PDD disallowed $510.00 of the salary costs of Frances Collins that were charged to the VEA and Perkins Act grants. Ex. A-1-7.The stipulation filed by the parties with the OALJ indicated that; none of the $510.00 disallowed in the PDD for Ms. Collins' salary is barred from recovery by the statute of limitations. Ex. E-2-4, 6. NYSED's PAR Effort Report attributes the effort for this $510.00 to program code 160. Ex. A-55-283; A-56-72 .

As NYSED points out, the Adult Education Act (AEA) requires the State educational agency to coordinate the AEA with activities under the VEA 20 U.S.C. § 1203a(a) (3) (1988). Both parties, through their respective proposed findings of fact and responses, acknowledge that program code 160 is an allowable program code to charge to the VEA or Perkins Act grant when it is used to indicate activities necessary to meet the requirement of the VEA or the Perkins Act to coordinate the VEA or Perkins Act grant programs with other programs, if it is used in conjunction with codes 180-190, and if it is used by an employee who performs authorized programmatic activities to coordinate the VEA or Perkins Act grant programs with other programs. The parties have also acknowledged that the Perkins Act authorized joint planning and coordination of the Perkins Act program and the programs conducted under the AEA.

The issue is whether in fact these employees were engaged in efforts to coordinate the AEA with the VEA The evidence on this issue consists of the PAR Effort Report, the affidavit of James Kadamus, the performance evaluations of these employees, and the testimony of James Kadamus and Kenneth DeCerce at the hearing.

Virginia Kirby, Frances Collins, Carolyn Barbuto, and Corinne Wells worked in the information processing unit of the Office of accupational and Continuing Education (OOCE). Hearing Tr. at 148. The performance evaluations for these employees are contained in Exhibits A-12 (Carolyn Barbuto), A-13 (Virginia Kirby), A-17 (Frances Collins), and A-18 (Corinne Wells). The performance evaluations for Ms. Barbuto, Ms. Collins and Ms. Wells are virtually identical. The "performance program" sections of these evaluations describe various word processing tasks and do not indicate that these employees were required to coordinate the AEA with the VEA The performance evaluation for .Ms. Kirby indicates that she was required to supervise employees in the information processing center. Again, Ms. Kirby's evaluation does not indicate that either she or her subordinates were required to coordinate the AEA with the VEA.

James Kadamus, in his affidavit contained in Ex. A-li, states that during fiscal year 1985-86 he was the Assistant Commissioner for the Office of Occupational and Continuing Education and State Director for Vocational Education. Mr. Kadamus then states that through that position he has personal knowledge that a number of employees, including Carolyn Barbuto, Virginia Kirby, Frances Collins, and Corinne Wells, worked exclusively on vocational education activities. Mr. Kadamus then states that any PAR code reflected in the final PAR report for these employees that did not reflect vocational activities was used in error.

This affidavit was signed on December 13, 1990, more than four years after the close of the 1985-86 fiscal year. The time lapse between the events described and the signing of the affidavit raises some question as to the reliability of the affidavit. This is especially true because NYSED is attempting to use this affidavit to prove that these employees worked exclusively on vocational education, even though these employees used some PAR codes that are not directly related to vocational education.

In addition, the parties, through their respective proposed findings of fact and responses, have acknowledged that Mr. Kadamus was a third-line supervisor above these word processing employees. However, at the hearing, Mr. Kadamus testified that he had a very acute knowledge of what his staff did on a daily basis. He stated that he met with people and would sometimes stop by the word processing unit and talk with the employees. Mr. Kadamus testified that about 100-120 employees under his jurisdiction within the OOCE were located on a single floor. Mr. Kadamus testified that he had regular meetings within the office and talked to employees often. Mr. Kadamus testified that he saw most people on a daily basis and that he travelled about 20% of the time, with members of his staff accompanying him. Hearing Tr. at 130, 152-155. Based upon Mr. Kadamus' testimQny, the tribunal is convinced that Mr. Kadamus had personal knowledge of the time and effort of the employees who worked in the information processing unit.

At the hearing, Mr. Kadamus testified that the OOCE had responsibility for the ABA, including coordination between the AEA and the VEA Hearing Tr. at 149. He further testified that these four word processors would have charged AEA codes only to reflect work that they did on documents related to the coordination between the AEA and the VEA, because the AEA work was done almost exclusively by the Division staff of Garrett Murphy, who had his own secretaries to do clerical work. Hearing Tr. at 148-152.

While the tribunal finds Mr. Kadamus' testimony to be credible, a few key words are telling. When asked if Garrett Murphy took advantage of the word processors in the information processing unit, Mr. Kadamus responded "Very little, if any . . . ." Hearing Tr. at 150. When asked if he could explain why these four employees in the information processing unit would have used codes related to the ABA, Mr. Kadamus stated as follows:

The only thing I can think of is they did spend some time doing documents that related to the connection between the Vocational Education Act and the Adult Education Act, may have done a little bit of word processing.

But I would say that it was a very small amount of time that they might have spent on any Adult Education programs. It would have only been in relation to the coordination of work.

Almost exclusively, the Adult Education work was done by the Division staff of Garrett Murphy.

Hearing Tr. at 152 (emphasis added) .

While Mr. Kadamus presents a quite plausible theory, he is not testifying that he had direct knowledge that these employees were performing coordination activities between the VEA and the AEA. His speculation as to that theory is not enough to carry NYSED's burden of proof.

Also at the hearing, Kenneth DeCerce, who in 1986 was a supervisor of Occupational Education, testified that the information processing center, where these four individuals worked, was under his supervision. Mr. DeCerce testified that these four word processors did not have any substantive responsibility for implementing the Adult Education Act. In addition, Mr. DeCerce agreed that an effort was made to try to get everybody on the floor to utilize the services of the word processing unit, because it had state-of-the-art word processing equipment. He stated that he would go to various supervisors and ask them to delegate some of their word processing work to the word processing unit, and that this campaign was directed especially toward the work that Garrett Murphy's staff was doing. Both Mr. DeCerce and Mr. Kadamus had testified that Garrett Murphy's staff performed work related to the AEA. Tr. at 187- 199.

Mr. DeCerce's testimony establishes only that these four word processors were seeking out work from other units, particularly from Garrett Murphy's unit, which performed work related to the AEA. This testimony does not establish with any certainty that the word processors were performing exclusively vocational education-related work. In fact, it raises the possibility that they were performing some word processing for the AEA, without demonstrating that this was merely coordination between the AEA and the VEA.

It follows that based upon all of the evidence, the tribunal finds that NYSED has failed to justify the following charges to PAR code 160 as being related to the VEA $364 of the salary of Carolyn Barbuto, $510 of the salary of Frances Collins, $606 of the salary of Virginia Kirby, and $445 of the salary of Corinne Wells. These amounts must be refunded to the Department.

c. Salaries of employees attributed to PAR codes 106, 306. and 152.

NYSED argues that Judith Corman rnistakenly entered the number 106 on her PAR sheet because she transposed the number 160 and that she was responsible for vocational and adult education coordination. NYSED Initial Brief at 23. The Assistant Secretaries respond that Ms. Corman's perf ormance evaluation supports her use of a nonvocational education codeg especially one relating to elementary education.

The Assistant Secretaries concede, at page 35 of their brief, that "the PAR Manual does not specifically list a PAR code 106 . . . ." Nonetheless, they argue that because the PAR codes around 106 (such as codes 102-104, 108, and 110-113) relate to elementary education, this indicates that Ms. Corman had worked on elementary education and was attempting to enter one of these elementary education codes. While this theory is plausible, it is no more plausible than NYSED's theory that Ms. Corman transposed 106 for 160, a theory that the Assistant Secretaries attack.

However, while it is true that the PAR Manual for October 15, 1985, did not specifically list a PAR code 106, the PAR Codes Manual for August 1, 1981 did specifically list a PAR code 106, which identified ESEA (Elementary and Secondary Education Act) IV Section 406 (Career Education). Ex. A-5-22. Therefore, it is also possible that Ms. Corman continued to use PAR code 106 in 1985-86 after it had been deleted from the PAR Codes Manual, because at one time it had been a vajid code.

Moreover, Ms. Corman's performance evaluation does include as one her tasKs the following: "Review proposals for selecting the NASA teacher in space, the outstanding elementary school in NYS, and the FY86 mini grant recipients." Ex. A-14-6. Under "Summary of Actual Performance", her evaluation states:

Mrs Corman [sic] has also been involved in a wide range of topics in support of Bureau and Education Department work. Among these assignments was the review of applications for New York State's teacher for the Teacher In Space Project, and the review of schools nominated for designation as outstanding elementary schools. Mrs. Corman reviewed approximately 20 proposals submitted by agencies desiring to obtain program improvement grants. . . .

Ex. A-14-8. This "Summary of Actual Performance", included in an evaluation that covered the period September 22, 1985, through September 22, 1986, is strong evidence that Ms. Corman did in fact work on some elementary education projects, including "review of schools nominated for designation as outstanding elementary schools."

Both in his affidavit, Ex. A-il, and at the hearing, James Kadamus asserted that Ms. Corman worked exclusively on vocational education activities. See Ex. A-il; Hearing Tr. at 142-144. In addition, at the hearing, Judith Corman testified that during the period of time in question, her responsibilities related 100 percent to vocational education. Ms. Corman also testified that on her employee activity record form for weeks 23 and 24, she actually wrote in code 166, instead of 106. Hearing Tr. at 183185; see also Ex. A-63. The number "8" in the 186 in period 23 does appear very similar to a "0". This code has the letters "VEAC" in the box next to it under the label "Program Name". "VEACI' also appears in the boxes next to the other 186 codes. Ms. Corman further testified that her intent was to write in an "8" instead of a "0" because 186 was always her code and because she worked 100 percent on vocational education. She testified that she never had any responsibilities for career education or elementary education. Hearing Tr. at 184-185.

Concerning the references in her performance evaluation to the Teacher In Space project and proposals for outstanding New York State Elementary School and project improvement grants, Ms. Corman testified on re-direct as follows:

Q: Could you please explain why your performance evaluation might make references to Teacher In Space and Elementary Education?

A: Yes. At that time New York State had received proposals from teachers all over New York State to be a participant in the space shuttle, and they were teachers from K through 12.

And I was asked to review the Vocational Education teachers' proposals.

Q: So you did it from a Voc. Ed. perspective?

A: That's correct.

Q: Was that because of your Voc. Ed. background?

A: That's correct.

Hearing Tr. at 186-187.

The tribunal finds this testimony to be persuasive and to satisfactorily explain the charges to PAR code 106, which had actually been written on the Employee Activity Record Form as 186.Accordingly, the tribunal finds that Ms. Corman's charge of $676.00 to PAR code 106 is justified and should be allowed.

NYSED claims that Iona Mirsky's charge to code 306, a school lunch code, was a simple error and that she worked exclusively on vocational education matters. NYSED Initial Brief at 24. The Assistant Secretaries point qut that neither of the two performance evaluations for Ms. Mirsky that were submitted by NYSED covers the audit period in question. Assistant Secretaries' Brief at 36-37.

The PDD disallowed $2,849.00 of the salary costs of Ms. Mirsky that were charged to the VEA and Perkins Act grants. Ex. A-1-7.The stipulation filed by the parties with the OALJ reduced the amount in dispute for Ms. Mirsky to $1,501.00 because of the effect of the statute of limitations. Ex. E-2-6. Ms. Mirsky's PAR report shows a $1,500.00 charge to code 000 and a $1,348.00 charge to code 306. Ex. A-55-264. PAR code 306 is a program code used to designate activities related to the breakfast program and sections 7 and 11 of the National School Lunch Act (NSLA). Ex. A-5-3.

It is true, as the Assistant Secretaries note, that neither of the two performance evaluations for Ms. Mirsky contained in Ex. A-19 covers the audit period in question. The first performance evaluation covers the period October 1, 1983, to March 30, 1984. This evaluation describes effort related to the VEA and does not mention any effort related to the NSLA. The second performance evaluation covers the period April 1, 1987 to April 1, 1988. This evaluation also describes effort related to vocational education and does not mention any effort related to the NSLA. Nonetheless, while these performance evaluations demonstrate that Ms. Mirsky worked on vocational education matters and apparently did not perform much work, if any, on the NSLA during the 1983-84 and 1987-88 periods, they are not particularly probative for the 1985-86 period.

However, at the hearing, Ex. A-61 was introduced by NYSED and accepted by the tribunal without objection. Hearing Tr. at 133.This exhibit consists of a performance evaluation for Ms. Mirsky covering the audit period in question, namely April 1, 1985, to March 30, 1986. This evaluation contains numerous references to effort related to vocational education generally and to the VEA and the Perkins Act specifically. This evaluation does not mention any effort related to the NSLA.

Again, NYSED also offers the affidavit of James Kadamus, who was Ms. Mirsky's supervisor. In the affidavit, Mr. Kadamus states that he has personal knowledge that Ms. Mirsky worked exclusively on vocational education activities and that any PAR code reflected in the final PAR report for Ms. Mirsky that did not reflect vocational education activities was used in error. Ex. A-11. As discussed supra, this affidavit by itself is not particularly probative, because of the time lapse involved.

At the hearing, Exhibit A-62 was introduced by NYSED and accepted by the tribunal without objection. Hearing Tr. at 166. This exhibit consists of Ms. Mirsky's Employee Activity Record Form for period number 13. This form indicates that 26.5 hours were charged to miscellaneous code 999 and 48.5 hours were charged to code 306. Next to code 306, under the heading "Program Name", are written in the words "VEA Sub I Sec 102d". At the hearing, Ms. Mirsky testified that she wrote in these words and that they stood for the administrative section of the VEA. She further testified that she did not write in the number "306" and that someone else must have filled it in. She noted that she sometimes forgot to write in the code numbers on her Employee Activity Record Forms. In addition, Ms. Mirsky testified that she has never worked on the NSLA and that during the time period in question, she worked exclusively on vocational education activities. Hearing Tr. at 164-168.

At the oral argument held in Washington, D.C., counsel for the Assistant Secretaries attacked the reliability of this undated Employee Activity Record Form. Oral Argument Tr. at 170- 171. It is true that this form does not contain reference to the year or even the month during which it was completed. It merely identifies a period beginning on Thursday, the 13th and ending on Wednesday, the 26th. The tribunal takes official notice of the fact that this sequence of dates and days of the week occurred during June 1985, which is approximately when pay period 13 occurred during the audit period of April 1, 1985, through March 31, 1986. 11 However, as a result of the statute of limitations, the parties agreed to remove from dispute all salaries except those occurring during pay periods 1-7, 19-26, and half of 18. Since this form refers to pay period 13, it reflects charges that occurred during a pay period that has been removed from dispute. Nonetheless, it is relevant for the purpose of determining why PAR code 306 was entered on Ms. Mirsky's Employee Activity Record Forms during the time periods that remain in dispute and whether the effort under PAR code 000 may be charged against the VEA grant.

At the evidentiary hearing, counsel for the Assistant Secretaries also brought out the fact that Ms. Mirsky's supervisor was required to review the PAR reports for accuracy, legibility, and completeness. Hearing Tr. at 169. Ms. Mirsky's supervisor was James Kadamus. Ms. Mirsky was his personal assistant. Hearing Tr. at 131, 164-5. Mr. Kadamus testified that Ms. Mirsky worked exclusively on vocational education and that she had no contact with the School Lunch program. He testified that he believed code 306 was entered by error.

The tribunal finds the testimony and other evidence to be persuasive and to satisfactorily explain the charges to PAR code 306.Accordingly, the tribunal finds that Ms. Mirsky's charge of $1,348.00 to PAR code 306 is justified and should be allowed. Therefore, NYSED will not be required to refund the $1,501.00 in charges to code 000.

NYSED contends that Christine Brooks' charge to code 152, a sex desegregation code, was an error, and that even if it was not an error, her activities relating to sex desegregation issues were properly charged to the VEA to the extent that they pertained to vocational education. NYSED Initial Brief at 26. The Assistant Secretaries contend that Ms. Brooks' performance evaluation does not indicate that she worked on vocational education. Assistant Secretaries' Brief at 38-39.

The PDD disallowed $58.00 of the salary costs of Christine Brooks that were charged to the VEA and Perkins Act grants. Ex. A-1-8. The stipulation filed by the parties with the OALJ indicated that none of the $58.00 disallowed in the PDD for Ms. Brooks' salary is barred from recovery by the statute of limitations. Ex. E-2-4, 6. NYSED's PAR Effort Report attributes the effort for this $58.00 to program code 152. Ex. A-55-469.

Ex. A-24 contains a performance evaluation for Ms. Brooks covering the period November 21, 1985, to November 21, 1986. This evaluation identifies Ms. Brooks as working in the Division of Civil Rights and Intercultural Relations, in the section for Occupational Education CIvil Rights. The evaluation indicates that Ms. Brooks' supervisor was Karl S. Wittman. Otherwise, the evaluation does not identify any specific vocational education activities or any sex desegregation activities. The performance evaluation is very general in its description. See Ex. A-24.

At the hearing, Karl S. Wittman, Ms. Brooks' supervisor during the period in question, testified that he had personal knowledge that Ms. Brooks worked exclusively on vocational education matters. Hearing Tr. at 209-210. He further testified that Ms. Brooks charged $58.00 to PAR code 152 because her responsibilities included matters:

related to Title IX of the Education Amendments of 1972, as it relates to the access of students or discrimination of students on the basis of sex and occupational education programs.

So to the extent that it was related to sex equity, and a sex equity effort, it was directly related to the responsibility in Occupational Education programming .

Hearing Tr. at 210. Mr. Wittrnan also stated that there was a separate desegregation unit in the New York City Education Department and that Ms. Brooks did not work in that unit because she worked solely in the Occupation Education part. Mr. Wittman also testified that he worked exclusively on vocational education matters as well. Hearing Tr. at 210-211.

The tribunal finds this testimony to be persuasive and to satisfactorily explain the charges to PAR code 152. The Assistant Secretaries have acknowledged that "Ms. Brooks' salary related to sex desegregation activities would be allowable onlv to the extent it related to a vocational education program." Assistant Secretaries' Brief at 38-39 (emphasis in original). Accordingly, the tribunal finds that Ms. Brooks' charge of $58.00 to PAR code 152 is justified and should be allowed. Therefore, NYSED will not be required to refund the $58.00 in charges to code 152.

d. Salaries of employees attributed to PAR codes 400. 407, 416, and 417.

NYSED argues that the salary of Robert DeFabio charged to a PAR code for the State Occupational Information Coordinating Committee (SOICC) is an allowable vocational education cost because part of VEA administration covered implementation and coordination of activities with the SOICC. NYSED Initial Brief at 19, 23. The Assistant Secretaries urge the tribunal to disallow Mr. DeFabio's charges to PAR code 407 because he used only code 407 and did not attribute any of his time to vocational education codes. Assistant Secretaries' Brief at 39-41.

The PDD disallowed $37,808.00 of the salary costs of Mr. DeFabio that were charged to the VEA and Perkins Act grants. Ex. A-1-7.The stipulation filed by the parties with the OALJ reduced the amount in dispute for Mr. DeFabio to $22,877.77 because of the effect of the statute of limitations. Ex. E-2-6. NYSED's PAR Effort Report attributes the effort for this $22,877.77 to program code 407. Ex. A-55-269, 341.

Program code 407 is a program code used to designate activities related to the SOICC. Ex. A-5-3. The VEA and Perkins Act authorized the National Occupational Information Coordinating Committee (NOICC). 20 U.S.C. § 2391(b) (1982); 20 U.S.C. § 2422(b) (1988). The VEA and Perkins Act required each State to establish a State occupational information coordinating committee with funds awarded by NOICC. 20 U.S.C. § 2391(b) (1982); 20 U.S.C. 2422(b) (1988).

In the Initial New York decision, the EAB held that employees who worked on VEA programs and also charged some of their time to PAR codes 000, 951, 406, and 407 are justified as liaison activities to CETA and should be allowed. Initial New York at 6 (finding 8). The EAB further held, however, that employees who charged time to PAR codes 400-412 are not justified if there is no evidence that they also worked on VEA programs that required liaison efforts with the listed CETA programs. The EAB required New York to refund these amounts. Initial New York at 6 (finding 11).

The EAB in Florida stated: "While the evidence in the case herein is not so precise or systematic as the evidence in New York, the key inquiry in both cases is whether the evidence shows that the VEA services were "actually performed." Florida at 25- 26 (emphasis added).

Therefore, the issue here is whether there is sufficient evidence that Mr. DeFabio worked on VEA programs that required liaison efforts with the SOICC so as to justify his charges to code 407.

The PAR Effort Report indicates that of the $37,808.00 originally in dispute, Mr. DeFabio charged $32,671 to PAR code 407 and $5,134 to PAR code 999. 12 In the Initial New York decision, the EAB held that employees who charged time to PAR code 999 ("Miscellaneous") were justified if their other PAR code charges were for VEA activities because such miscellaneous charges are then found to be attributable to VEA programs and should be allowed. Initial New York at 6 (finding 9). Therefore, Mr. DeFabio's charges to PAR code 999 will be allowed if his other charges (to code 407) are found to have been made for VEA activities. Again, the issue remains whether there is sufficient evidence that Mr. DeFabio worked on VEA programs that required liaison efforts with the SOICC so as to justify his charges to code 407. See Initial New York at 6 (finding 8).

Mr. DeFabio's performance evaluation for the period April 1, 1985, to March 31, 1986, contains several references to the VEA and describes various coordination efforts, but it is unclear from the performance evaluation alone whether Mr. DeFabio worked exclusively on vocational education related matters. Ex. A-16.

The affidavit of James Kadamus states that Mr. Kadamus has personal knowledge that Mr. DeFabio worked exclusively on vocational education activities, but again, this affidavit, executed several years later, is not particularly probative. Ex. A-11.

At the hearing, Mr. Kadamus testified that the SOICC responsibilities in his office were related exclusively to the administration of the Vocational Education State Plan. Mr. Kadamus read the following section from the State Plan:

The State Education Department through the State Occupational Information Coordinating Committee, SOICC, will coordinate development of occupational supply- demand data, and labor market information for vocational education planning, as legislated under the Job Training Partnership Act.

Hearing Tr. at 137; see also Ex. A-10-15.

Mr. Kadamus further testified that he had personal knowledge that Mr. DeFabio spent 100 percent of his time on vocational education during the period in question. Hearing Tr. at 138.

Mr. Kadamus acknowledged that SOICC is a distinct grant from the vocational education grant, even though the State was required to coordinate between the SOICC and the VEA Hearing Tr. at 156-158. He also testified that the State could use vocational education administrative funds to pay for people working on SOICC activity and that the separate monies received for SOICC would not have been sufficient to support the State's coordination efforts. Hearing Tr. at 162-3.

Mr. DeFabio, himself, also testified at the hearing. He stated that 100 percent of his responsibilities during the period in question were related to the Vocational Education program. Hearing Tr. at 172-174. Mr. DeFabio further testified that he is still currently performing the same kind of work and that he now charges it to one of the VEA codes (180-190) because code 407 was deleted from the PAR code list. Hearing Tr. at 174-177.

The tribunal finds this testimony to be persuasive and to satisfactorily explain the charges to PAR codes 407 and 999. Accordingly, the tribunal finds that the $22,877.77 of Mr. DeFabio's salary in dispute is justified and should be allowed. Therefore, NYSED will not be required to refund such $22,877.77.

NYSED argues that the salary of George Kawas charged to a PAR code for the Jobs Training Partnership Act (JTPA) is an allowable vocational education cost because part of VEA administration covered implementation and coordination of activities with the JTPA. NYSED Initial Brief at 19, 23. The Assistant Secretaries originally requested the tribunal to disallow Mr. Kawas' charges to PAR code 417 because he used only code 417 for line item no. 67832 and did not attribute any of his tirne to vocational education codes. Assistant Secretaries' Brief at 41-43.

The PDD disallowed $4,011.00 and $3,416.00 of the salary of George Kawas. Ex. A-1-8. The stipulation filed by the parties with the OALJ reduced the amount in dispute for Mr. Kawas to the $3,416.00 under line item 67832 because of the effect of the statute of limitations. Ex. E-2-6; Ex. A-55-324. NYSED's PAR Effort Report attributes the effort for this $3,416.00 under line item 67832 to program code 417. Ex. A-55-323 and 324; Ex. A-56-87 and 88.

Mr. Kawas was assigned to two different budget line items during at least part of the period covered by the PDD: line item 67782 and line item 67832. Ex. A-55-323 and 324. Both line items were for positions in the Bureau of Adult and Continuing Education Programs Development for at least part of the period covered by the PDD. Ex. A-55-323 and 324. Mr. Kawas attributed all of his time under line item 67832 to program code 417 and did not charge any effort under this line item to codes 180-190. Ex. A-55-324.

As discussed supra in the analysis for Robert DeFabio, this tribunal has found, based upon the EAB's decision in the Initial New York case, that the salaries of New York employees who charge time to PAR codes 400-412 are justified if there is sufficient evidence that these employees worked on VEA programs that required liaison efforts with the listed CETA programs. See Initial New York at 6 (findings 8 and 11).

Therefore, the issue here would be whether there was sufficient evidence that Mr. Kawas worked on VEA programs that required liaison efforts with the JTPA so as to justify his charges to code 417.

Mr. Kawas' performance evaluation does not specifically mention coordination activities between the VEA and the JTPA. The evaluation does make numerous references to the Occupational Retraining and Reemployment Act Section #7 (ORRA #7). Ex. A-15.

At the hearing, James Kadamus testified that he had personal knowledge that Mr. Kawas worked exclusively on vocational education matters. Hearing Tr. at 139-142. Mr. Kadamus also made the same statement in his affidavit. Ex. A-11.

Also at the hearing, Gary Gardner, who is currently the Senior Budget Analyst with NYSED's Budget Coordination Unit, testified that under line item 67832, Mr. Kawas was supported with JTPA Title III funding, instead of VEA funding. He therefore testified that the $3,416.00 of Mr. Kawas' salary in question was not funded under VEA, but under JTPA. Hearing Tr. at 120-126; see also A-54-180; Ex. A-55-324.

As a result of this testimony, counsel for the Assistant Secretaries agreed to discuss this evidence with co-counsel and to either acknowledge or dispute this evidence at a later date. Hearinq Tr. at 220-221. On July 16, 1993, the Assistant Secretaries submitted a Partial Withdrawal of Claim in which they discussed Mr. Gardner's testimony and formally withdrew their claim for $5,134.93 of salary charges for Mr. Kawas, which included $3,416.00 of his salary plus 19.4 percent for indirect costs ($662.70) and 30.92 percent for fringe benefits ($1,056.23).

Accordingly, the tribunal finds, based upon Ex. A-54-180 and Ex. A-55-324, that under line item 67832, the line item in dispute, Mr. Kawas was supported with JTPA Title III funding, instead of VEA funding. Therefore, the $3,416.00 of Mr. Kawas' salary in dispute was not improperly charged to the VEA and is allowable. Accordingly, the tribunal finds that the $3,416.00 of Mr. Kawas' salary in dispute is justified and should be allowed. Therefore, NYSED will not be required to refund such $3,416.00.

NYSED claims that Doreen Jones Ryan charged most of her time to JTPA and that any non-allocable codes were used in error because she worked exclusively on vocational education activities. NYSED Initial Brief at 23-24. The Assistant Secretaries respond that the evidence does not indicate that all of her activities were vocational education related or that she used non-allocable codes in error. Assistant Secretaries' Brief at 43-44.

The PDD disallowed $15,800.00 of the salary costs of Doreen Jones Ryan that were charged to the VEA and Perkins Act grants. Ex. A-1-7. The stipulation filed by the parties with the OALJ reduced the amount in dispute for Ms. Ryan to $8,046.57 because of the effect of the statute of limitations. Ex. E-2-6. The time and effort reported by Ms. Ryan is contained in Ex. A-55-294 and 350. Ms. Ryan charged effort to PAR codes 281 and 284 in the amount of $1,017.00 and to PAR code 416 in the amount of $2,840.00. Ex. A-55-294. Ms. Ryan reported effort on PAR code 261 in the amount of $517.00, on code 265 in the amount of $346.00, on codes 281, 284, and 285 in the amount of $2,880.00, and on codes 400 and 416 in the amount of $8,194.00. Ex. A-5S- 350.

PAR codes 281-285 represent effort on the Appalachian Regional Commission (ARC) program. Ex. A-5-3 and 8. PAR code 416 refers to the JTPA. Code 400 refers to the Comprehensive Employment & Training Act (CETA), the predecessor to the JTPA. PAR code 261 is an old PAR code referring to the ESAA Puerto Rican Cultural Service program. Code 265 is an old PAR code referring to the Higher Education Act (HEA) program. Ex. A-5-3, 8, 9, 23.

As discussed supra, the key inquiry here is whether there is sufficient evidence "that the VEA services were 'actually performed." See Florida at 25-26; see also Initial New York at 6 (findings 8 and 11).

Again, NYSED offers the affidavit of James Kadamus, who states that he has personal knowledge that Ms. Ryan worked exclusively on vocational education activities and that any PAR code reflected in the final PAR report for Ms. Ryan that did not reflect vocational education activities was used in error. Ex. A-11. As discussed above, the Kadamus affidavit by itself is not particularly probative of this issue.

Doreen Jones Ryan also signed an affidavit in which she states that her responsibilities were 100 percent vocational education related and that her responsibilities have never included Puerto Rican cultural services or higher education. She further attests that any PAR codes listed for those activities must have been clerical or transmission errors. Ex. A-21.

The performance evaluation for Ms. Ryan for the period February 21, 1985, to February 21, 1986 identifies her as a Senior Stenographer. Ex. A-20. The evaluation describes mostly secretarial and clerical duties, such as typing, screening of telephone calls, and completing and maintaining files. These duties do not relate to any one particular program and in fact, appear to be consistent with the duties of a secretary who assists people working on many different programs.

At the hearing, James Kadamus testified that Ms. Ryan worked in the Office of Occupational and Continuing Education and that her supervisors were Dave Gillette and Bob Possek. Mr. Kadamus testified that their responsibilities were related 100 percent to vocational education. Mr. Kadamus stated that they coordinated the JTPA and the Appalachian Regional Commission (ARC) with the VEA According to Mr. Kadamus, Ms. Ryan provided clerical support for Mr. Gillette. Mr. Kadamus further testified that neither Ms. Ryan or anyone else in the Office of Occupational and Continuing Education had responsibility for the ESAA Puerto Rican Cultural Service, the ESAA State Education Agency, or the Higher Education Act, Title VI. Mr. Kadamus attested that he believed Ms. Ryan used the PAR codes for those programs in error. Finally, he testified that Ms. Ryan did perform clerical work on coordinating CETA and JTPA with the VEA, and that she worked on vocational education programs during the period in question. Hearing Tr. at 144-148.

Ms. Ryan also testified at the hearing. Hearing Tr. at 200- 207. She testified that her responsibilities during the time period in question were related exclusively to vocational education .

At the hearing, Ex. A-64 was introduced and accepted into evidence without objection. Hearing Tr. at 201. This Employee Activity Record Form for Ms. Ryan contains references to pay periods 1, 2, 21, 22, 23, and 24. It also contains references to dates, such as Thursday, October 3 through Wednesday, October 16 for pay period 21. However, it does not identify the year during which these dates occurred. At the oral argument held in Washington, D.C., counsel for the Assistant Secretaries attacked the credibility of Ex. A-64 for this reason. Oral Argument Tr. at 174.

Nonetheless, the tribunal takes official notice of the fact that in 1985, October 3 fell on a Thursday (as it does in pay period 21 of Ex. A-64), October 17 fell on a Thursday (as it does in pay period 22 of Ex. A-64), October 31 fell on a Thursday (as it does in pay period 23 of Ex. A-64), November 14 fell on a Thursday (as it does in pay period 24 of Ex. A-64), and December 26 fell on a Thursday (as it does in pay period 1 of Ex. A-64). The tribunal also takes official notice of the fact that in 1986, January 9 fell on a Thursday (as it does in pay period 2 of Ex. A-64). 13

The next previous time period before the 1985-86 period when these dates would fall upon the same days of the week is the period from October 1974 to January 1975. Ms. Ryan stated in her affidavit that she has been employed by NYSED since 1979. Ex. A 21. The next subsequent time period after the 1985-86 period when these dates would fall upon the same days of the week is the oeriod from October 1991 to January 1992. Ms. Ryan testified at the hearing that this employee activity record for these pay periods (1, 2, 21, 22, 23, and 24) covered the period in 1986. Hearing Tr. at 201.

Therefore, based upon the evidence, the tribunal finds that Ex. A-64 and pay periods 1, 2, 21, 22, 23, and 24 as discussed therein relate to the time period from October 1985 to January 1986.

Ms. Ryan testified that during pay period 21, she wrote in PAR code 261, with the letters "ARC 211A" next to that code. She testified that she did not work on Puerto Rico ESAA during this time period, and worked on ARC coordination. She claimed that she wrote down code 261 by mistake. Hearing Tr. at 202-203.

Ms. Ryan further testified that during pay period 22, she also put down code 261, and that during this time period, she worked on ARC coordination and did not work on Puerto Rico ESAA. Similarly, she stated that during time period 23, she put down ARC, using PAR code 261, and that she worked on ARC coordination and did not work on Puerto Rico ESAA. She offered the same testimony as to time period 24. She further testified that during time period 24, she put down "ARC 211B" and used PAR code 264, which refers to the Emergency School Aid Act program. She stated that she did not work on the ESAA and that she worked on ARC coordination. She claimed that her use of code 264 was a mistake. Hearing Tr. at 203-204.

Ms. Ryan claimed that her use of PAR code 265 during time period 1, while writing "ARC 211A" next to it, was a mistake because she worked on ARC coordination and did not work on the ESAA program, which code 265 represents. She again testified that her use of code 265 during time period 2 was a mistake because she worked on ARC coordination. She testified that she did have responsibilities to coordinate the VEA with JTPA and CETA and that all of her support activities and clerical responsibilities were related to vocational education. In summary, Ms. Ryan stated that all of the codes that appear in Ex. 64 relating to the ESAA were used in error. Hearing Tr. at 204-205.

The tribunal finds this testimony to be persuasive and to satisfactorily explain the charges to PAR codes 261 and 265. During the period in question, code 285 identified work on ARC Technical Assistance. In previous years, code 281 represented work on ARC 211A, and code 284 represented work on ARC 211B. Based upon the testimony and other evidence submitted, the tribunal finds that, during the audit period in question, Ms. Ryan worked on ARC coordination when using codes 261, 265, 281, 284, and 285.

In the Initial New York decision, the EAB held that certain codes representing programs that were required to be coordinated with the VEA were allowable charges to the VEA grant under limited circumstances. As discussed supra, this tribunal has held that codes representing programs that were required to be coordinated with the VEA are allowable charges to the VEA grant when there is sufficient evidence that these employees worked on VEA programs that required liaison efforts with the listed programs. See Initial New York at 6 (findings 8 and 11); see also Florida at 25-26.

At the hearing, Mr. Kadamus testified that:

It was a requirement under the Vocational Education Act that the States that were involved in the Appalachian Regional Commission, which I think are all of the States that have the Appalachian Mountains run through them, those States had to coordinate the Appalachian Regional Commission funding with the Vocational Education Act funding.

That was a requirement of the law.

Hearing Tr. at 145.

In this connection, the Assistant Secretaries submitted Proposed Findings of Fact, which included the following statements:

9. Program codes 281-285 are program codes used to designate activities related to separate sections of the Appalacbian Regional Commission (ARC) Act. A-5-10.

i. Only activities necessary to coordinate the VEA and Perkins Act programs with those conducted under the ARC may be funded from a Perkins Act grant. See A-3-6 at paragraphs 8 and 11.

ii. The cost of an employee's effort attributed to implementing the ARC, rather than coordinatinq the VEA and Perkins Act programs with the ARC program, is not an allowable cost to fund from the Perkins Act grant. See A-3-6 at paragraphs 8 and 11; A-1-7. In its response to the Assistant Secretaries' proposed findings of fact, NYSED agreed with these statements, adding only that other evidence may demonstrate that the employee at issue worked on activities that are allocable to VEA or Perkins.

In as much as both parties have agreed to the principle that activities necessary to coordinate the VEA and Perkins Act programs with those conducted under the ARC may be funded from a Perkins Act grant, the tribunal finds, based upon the hearing testimony and other evidence discussed above, that Ms. Ryan's charges to PAR codes 281, 284, and 285 are allowable because there is sufficient evidence that she worked on VEA programs that required liaison efforts with the listed ARC program. See Initial New York at 6 (findings B and 11); see also Florida at 25-26.

As discussed supra, the EAB held that code 400 could properly be charged against the VEA program if there is sufficient evidence that these employees worked on VEA programs that required liaison efforts with the listed programs. See Initial New York at 6 (findings 8 and 11); see also Florida at 25-26.Therefore, based upon the testimony at the hearing, the tribunal finds that Ms. Ryan's charges to PAR code 400 were allowable charges against the VEA.

Based upon the testimony at the hearing, the tribunal finds that the charges to code 416 also represented coordination efforts between the VEA and the JTPA. See 20 U.S.C. § 2373. The EAB allowed charges to PAR codes representing CETA programs (CETA was the predecessor to the JTPA) when the employee performed liaison efforts between the VEA and those CETA programs. See Initial New York at 6 (findings 8 and 11); see also Florida at 25-26.Therefore, based upon the testimony at the hearing, the tribunal finds that Ms. Ryan's charges to PAR code 416 were allowable charges against the VEA.

In conclusion, the $8,046.57 of Ms. Ryan's salary in dispute was not improperly charged to the VEA and is allowable. Accordingly, the tribunal finds that the $8,046.57 of Ms. Ryan's salary in dispute is justified and should be allowed. Therefore, NYSED will not be required to refund such $8,046.57.

e. Salaries of employees attributed to PAR code 000.

NYSED claims that James Stratton worked mostly on vocational education, and that all but 10 percent of his charges to code 000 should be allowed. Similarly, NYSED argues that 50 percent of Suzanne Spear's charges to general code 000 could properly be charged to VEA. NYSED Initial Brief at 24-26. The Assistant Secretaries contend that the EAB specifically rejected this argument in finding 12 of the Initial New York decision. Assistant Secretaries' Brief at 44-46.

The PDD disallowed $21,927.00 of the salary costs of James Stratton that were charged to the VEA and Perkins Act grants. Ex. A-i-B. The stipulation filed by the parties with the OALJ reduced the amount in dispute for Mr. Stratton to $11,983.91 because of the effect of the statute of limitations. Ex. E-2-6. NYSED's PAR Effort Report attributes the effort for this $11,983.91 to program codes 216 and 000. Ex. A-55-528; Ex. A-56-118-120.

NYSED has conceded that none of the cost of Mr. Stratton's effort attributed to PAR code 216 is allocable to the VEA and Perkins Act grants. NYSED Initial Brief at 25, 70. The salary cost of the 86 hours of Mr. Stratton's effort that was attributed to PAR code 216 is $2,307.66. Ex. A-55-528; Ex. A-56-120.

NYSED has conceded that 10 percent of Mr. Stratton's effort attributed to PAR code 000 is not allocable to the VEA and Perkins Act grants. NYSED Initial Brief at 25, 70. The Assistant Secretaries disallowed all of Mr. Stratton's charges to general code 000. The salary cost of Mr. Stratton's effort attributed to PAR code 000 is $9,937.86. Ex. A-55-528; Ex. A-56-118-120. NYSED does not dispute 10 percent of this amount, or $993.79.

Therefore, by taking the $2,307.66 of charges to code 216 and the $993.79 of charges to code 000 that are conceded by NYSED, the total amount conceded by NYSED becomes $3,301.45. This amount was listed in section (a). By taking the $11,983.91 remaining in dispute after the effect of the statute of limitations and subtracting the $3,301.45 conceded by NYSED and listed in section (a), the amount remaining in dispute to be decided here is $8,682.46, all of which was charged to PAR code 000.

NYSED has submitted an affidavit by Mr. Stratton in which he states that his responsibilities included several VEA matters and that he expended no more than 10 percent of his time and effort on activities that were not related to vocational education. Ex. A-22.

NYSED has also submitted a performance evaluation for Mr. Stratton for the period April 1, 1985, to March 31, 1986. This evaluation does include various duties related to vocational education. It also includes duties related to the Title II ESAA program that is identified by PAR code 216. Ex. A-23; Ex. A-5-3.

In the Initial New York decision, the EAB held that in the circumstances where New York employees split their work time between VEA programs and non-vocational activities and charged time to PAR code 000, NYSED could not justify a charge against VEA funds because this code does not provide a separation or allocation of costs between VEA and non-vocational activities. The EAB reauired New York to refund these amounts. Initial New York at 6 (finding 12).

The EAB's ruling is applicable to the present case. Just as in the Initial New York decision, a NYSED employee, James Stratton, has split his work time between VEA programs and non- vocational activities (the Title II ESAA program) and charged time to PAR code 000. This code does not provide a separation or allocation of costs between VEA and non-vocational activities. The affidavit and performance evaluation offered by NYSED do not adequately provide a separation or allocation of costs between VEA and non-vocational activities. Therefore, NYSED must refund not only the $3,301.45 listed in section (a), but also the $8,682.46 of Mr. Stratton's salary involved here.

The PDD disallowed $43,060.00 of the salary costs of Suzanne Spear that were charged to the VEA and Perkins Act grants. Ex. A-1-8.The stipulation filed by the parties with the OALJ reduced the amount in dispute for Ms. Spear to $18,857.13 because of the effect of the statute of limitations. Ex. E-2-6. The disallowed amount includes charges to PAR codes 203 and 000. Ex. A-55-369.

NYSED has conceded that none of the cost of Ms. Spear's effort attributed to code 203 is allocable to the VEA and Perkins Act grants. NYSED Initial Brief at 25, 69. NYSED has conceded that 50 percent of Ms. spear's effort attributed to program code 000 is not allocable to the VEA and Perkins Act grants. NYSED Initial Brief at 25, 69. The total amount conceded by NYSED, and listed in section (a), is $9,719.31. Thus the amount in dispute to be decided here is $9,137.82, derived by subtracting $9,719.31 from $18,857.13.

NYSED has submitted two performance evaluations for Ms. Spear. One covers the period August 13, 1984, to August 13, 1985. The other covers the period August 13, 1986, to August 13, 1987. Ex. A-23a. Neither one of these evaluations covers the period in dispute after application of the statute of limitations, namely August 29, 1985, to March 31, 1986. Thus, these evaluations are of very limited value in that they indicate what Ms. Spear was doing before and after the period in dispute, but do not directly apply to the period in dispute. The evaluation covering the period August 13, 1984, to August 13, 1985, does indicate that Ms. Spear performed work on the BOCES program. The second evaluation does not. Ex. A-23a.

Even if these evaluations did have more probative value, Ms. Spear's charges to PAR code 000 would not be justified. NYSED makes the statement in its initial brief that The [BOCES] program is considered to be 50% vocational education related and 50% special education related. " Other than to point to its own State Plan (see Ex. A-10-55, 107), NYSED offers no support for this statement.

Moreover, the same analysis that applied to Mr. Stratton's charges to PAR code 000 applies to Ms. Spear's charges to PAR code 000. In the Initial New York decision, the EAB held that in the circumstances where New York employees split their work time between VEA programs and nan-vocational activities and charged time to PAR code 000, NYSED could not justify a charge against VEA funds because this code does not provide a separation or allocation of costs between VEA and non-vocational activities. The EAB required New York to refund these amounts. Initial New York at 6 (finding 12).

The EAB's ruling is applicable to the present case. Just as in the Initial New York decision, a NYSED employee, Suzanne Spear, has split her work time between VEA programs and non- vocational activities 14 and charged time to PAR code 000. This code does not provide a separation or allocation of costs between VEA and non-vocational activities. The affidavit and performance evaluation offered by NYSED do not adequately provide a separation or allocation of costs between VEA and non-vocational activities. Therefore, NYSED must refund not only the $9,719.31 conceded by NYSED and listed in section (a), but also the $9,137.82 of Ms. Spear's salary that is involved here.

f. Conclusions as to VEA funded employees in dispute.

To summarize, prior to considering NYSED's request for equitable offset, the tribunal finds that NYSED must refund $106,108.61 of the $142,683.95 that the parties originally stipulated to as being in dispute for VEA-funded employees in this proceeding. When this $106,108.61 is added to the indirect cost rate of 19.4 percent ($20,585.07) and the fringe benefit rate of 30.92 percent ($32,808.78), NYSED's total liability becomes $159,502.46.

3. EHA-B Funded Employees in Dispute.

The Assistant Secretaries assert that employee effort allocated by the PAR system to the Chapter 1 Handicapped program cannot be charged to the EHA-B program. Because they are separate programs, according to the Assistant Secretaries, with distinct allowable costs, employee effort attributed by the PAR Ef fort Report to the Chapter 1 Handicapped program is not allocable to the EHA-B program. The Assistant Secretaries insist that because there are allowable costs that can only be charged to either the EHA-B or Chapter 1 Handicapped program, but not both of these programs, NYSED's assumption that allowable costs under the two programs completely overlap is wrong. The Assistant Secretaries urge that NYSED's analysis fails to establish that the EHA-B and Chapter 1 Handicapped programs are the same. Moreover, according to the Assistant Secretaries, the evidence presented by NYSED indicates that there is no basis for reallocating to the EHA-B employee effort originally attributed to the Chapter 1 Handicapped program. Therefore, the Assistant Secretaries state that NYSED must refund the full amount of funds remaining in dispute, which is proportionate to the federal harm caused by its violation. Assistant Secretaries' Brief at 46-68.

NYSED asserts that the employee charges to the EHA-B grant were proper, based upon NYSED's State Plan for Education of the Handicapped and an employee-by-employee analysis of EHA-B disallowed costs. NYSED further claims that PAR code 054 was properly allocable to EHA-B NYSED Initial Brief at 27-39. NYSED also claims that employees who charged time to Chapter 1 Handicapped activities could properly be allocated to EHA-B and that other EHA-B employee charges also were properly allocated. NYSED Reply Brief at 27-29.

a. Salaries of employees conceded bv NYSED.

Initially, the tribunal notes that NYSED, both in its briefs (see Appendix D to NYSED's Initial Brief) and through its proposed findings of fact as well as its response to the Assistant Secretaries' proposed findings of fact, has apparently conceded that all or part of the salaries of twelve of the EHA-B funded employees in dispute are not properly allocable to the EHA-B These salaries and the amounts conceded are as follows:

Accordingly, the tribunal finds that these salaries were not properly allocable by NYSED to the EHA-B and therefore should be refunded to the Department. See Initial New York at 8 (findings 15 and 16).

b. EHA-B and the Chapter 1 Handicapped program

NYSED argues that "allowable activities under the ECIA Chapter 1 Handicapped program cannot be distinguished from allowable activities under EHA-B" and that as a result, PAR code 054 (which identified activity on the Chapter 1 program) was also properly chargeable to the EHA-B grant. NYSED Initial Brief at 28-29; see also Ex. A-5-2. The Assistant Secretaries contend that the EHA-B and Chapter 1 programs are separate programs with distinct allowable costs, such that code 054 was not properly allocable to the EHA-B grant. Assistant Secretaries' Brief at 46-56.

During the period in issue, the Chapter 1 Handicapped program, also known as the Pub. L. 89-313 program, was authorized by 20 U.S.C. § 2771 et seg. (1982). The implementing regulations for the Chapter 1 Handicapped program are contained in 34 C.F.R. Part 302 (1985). During the period in issue, the EHA-B program was authorized by 20 U.S.C. §§ 1401, 1411-1420 (1982). The implementing regulations for the EHA-B program are contained in 34 C.F.R. Part 300 (19