The Audits Will Continue Until Morale Improves

April 29, 2011 | By Thompson Education | Post a Comment

(This post is excerpted from Title I-Derland, Thompson’s blog on federal K-12 education and was written by Chuck Edwards, senior executive director for Thompson’s education products.) This appears to be the lesson of the nine-year odyssey of Valencia Community College, as recounted by attorney Michael Brustein, a founding partner at the Brustein & Manasevit law firm, during the firm’s annual spring Grants Forum Wednesday in Washington, D.C.

In 2001, program monitors from the U.S. Department of Education’s Office of Postsecondary Education (OPE) questioned the method that the community college used to calculate matching expenditures for its Gear-Up grants, which fund programs to help disadvantaged students succeed in college. Auditors from the Office of Inspector General (OIG) followed up, and after three separate visits over a period of six months, recommended that OPE require Valencia to repay $1.8 million.

See if you can follow this convoluted chain of events: OPE monitors had originally questioned Valencia’s matching method because they thought it didn’t conform to OPE’s instructions in the Gear-Up application package. But the OIG concluded that the college did, in fact, follow OPE’s instructions — but said it was the original instructions from the U.S. Department of Education themselves that were wrong. For Brustein, the story ends with a bitter twist: Valencia was cited for essentially following directions. One arm of the U.S. Department of Education, the OIG, found flaws in the very methods originally proffered by another arm of the U.S. Department of Education, the OPE.

The OIG is famously independent, and it is not uncommon for auditors to disagree with the program office on issues of regulatory interpretation. But, in this case, said Brustein, the mistake was OPE’s, not Valencia’s.

Yet Valencia got hit with the penalty. It goes to show, Brustein said, that grantees must be very careful whose guidance they rely on.

OPE eventually decided to give Valencia the opportunity to present other expenditures that could be used as a match — a common solution that allows a grantee to substitute eligible expenditures for ineligible ones. Finally, in January of this year, Valencia got the final bill from OPE: $289,966. Weary of the battle, Valencia cut the check.

Although $289,966 certainly beats $1.8 million, Valencia emerged from its nine-year ordeal significantly battered. There are many ways for grantees to avoid or mitigate monetary penalties — and Title I-Derland will feature more in the weeks to come — but the process itself certainly imposes its own costs in wear and tear.


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