Case ID: us-ct-cl_180/html/0676-01.html
Source: Caselaw Access Project
Author: {"author": "Laramore, Judge, Nichols, Judge, Skelton, Judge,\n    ", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

381 F. 2d 421
    EASTERN SCHOOL, A PARTNERSHIP CONSISTING OF FRANK SIMON, BENJAMIN EIZENMAN, OSCAR GOLDMAN, PHILLIP LASTER AND SAMUEL FRANK v. THE UNITED STATES
    [No. 229-57.
    Decided July 20, 1967]
    
      
      Benjamin Eizenman, attorney of record, for plaintiff.
    
      Frances L. Nunn and Louis 8. Paige, with, whom was Assistant Attorney' General Barefoot Sanders, for defendant.
    Before Cowen, Chief Judge, Laramore, Dtjrpee, Davis, Collins, Skelton and Nichols, Judges.
    
   Laramore, Judge,

delivered the opinion of the court:

We are told by government counsel that this is the last of the so-called “schools” cases. Thus, this opinion is our final contribution to a body of jurisprudence produced by the G.I. Bills which were enacted for the benefit of returning servicemen after World War II and the Korean War. In tbe typical “schools” case, the primary issue has been whether a school is entitled to a higher tuition rate for veterans’ instruction than it has been allowed by the Veterans Administration (VA). This has been largely a factual inquiry (although governed by a legal standard, i.e., “fair and reasonable compensation”) which has presented difficult problems of accounting and cost allocation. There have also been subsidiary issues; for example, the proper point of first accrual of the cause of action, the meaning of the terms “customary cost of tuition” and “fair and reasonable compensation,” and the presence of fraud in the presentation of claims to the VA. The present case raises both the primary issue and all the subsidiary issues on an extremely lengthy, and at times confusing, record. We note at this time our gratitude to Trial Commissioner Franklin M. Stone who prepared very thorough findings of fact after trying this case under difficult circumstances. The transcript is replete with instances in which the Commissioner acted with admirable patience and judicial restraint.

Plaintiff is a partnership known as “Eastern School.” It was organized in 1946 and commenced operation as a trade school in New York City under the name of “Eastern School of Radio & Television” in 1947. In 1949 the name of the school was abbreviated to the partnership name. On March 18, 1949, plaintiff and the VA entered into contract V3006V-292 which specified tuition rates for the following-two courses for the period January 1 through December 31, 1949: Radio Technician course, $.495 per student-hour; FM and Television Technician course, $.5866 per student-hour. These tuition rates are not in issue. The dispute is over the proper rate for a course called “Radio Technology” which plaintiff offered for the first time on February 1,1949. This course was also encompassed by the above-numbered contract in a supplemental agreement dated September 16,1949. The tuition rate was set by the Administrator of the VA at $.50 per student-hour based upon the estimated costs of operation. On December 31, 1949, the contract and supplemental agreement expired leaving the rate for the Radio Technology course undetermined.

At this point some history is helpful. After the initial contract expired, a new rate had to be established as veterans continued to enroll in the course through 1950 — in. fact, until 1957. The administrative procedure had its origin in the 1944 G.I. Bill. Section 400(b) of the Servicemen’s Readjustment Act of 1944, 58 Stat. 284, 289, provided as follows:

The [VA] Administrator shall pay to the educational or training institution, for each person enrolled in full time or part time course of education or training, the customary cost of tuition, * * *: Provided * * * That if any such institution has no established tuition fee, or if its established tuition fee shall be found by the Administrator to be inadequate compensation to such institution for furnishing such education or training, he is authorized to provide for the payment, with respect to any such person, of such fair and reasonable compensation as will not exceed $500 for an ordinary school year. [Emphasis added.]

In regulations made effective July 1, 1948, the VA arbitrarily chose 30 weeks as the minimum period for the establishment of a customary tuition cost. That only covered nonprofit institutions, however. Eor “courses of 30 weeks or more,” profit institutions were required to submit “detailed, certified financial statements showing the most recent actual cost experience of the institution for the specific courses involved” so that a “fair and reasonable compensation” could be determined. Change 4 to Manual 7-5, 38 C.F.R. §21.530 (1949 Ed.). The regulations stated that “all expenses, except expenses for sales commissions and promotional plans, which are reasonable and necessary for the operation of the courses involved will be included in the cost statement,” suggesting that any reasonably related expense would be compensable. This regulation was in effect on January 1, 1950 when plaintiff’s contract, covering the preceding 11 months and providing for a rate of $.50 per student-hour, expired.

This scheme — particularly the treatment of “customary cost of tuition” — was not entirely satisfactory to either the VA or the schools, so Congress responded with two remedial bills. The first was appended to the Independent Offices Appropriation Act of 1950, 63 Stat. 631, 653 (1949). It provided that for courses subject to contract for two successive years the tuition rate would be the rate established by the most recent contract. For courses without a “customary cost,” a “fair and reasonable” rate would be fixed by the VA. Administrative review was assured by the creation of a “Veterans’ Tuition Appeals Board.” The second bill, enacted the following year, preserved the customary cost definition of the first, changed the name of the administrative board to the “Veterans’ Education Appeals Board” (VEAB), and elevated the provisions to permanent law status. Veterans’ Education and Training Amendments of 1950, 64 Stat. 336, 338-339. The history of these provisions is more thoroughly treated in Hemphill Schools, Inc. v. United States, 133 Ct. Cl. 462, 465-468 (1955).

Thus, at the time plaintiff and the VA were negotiating a new rate for the Badio Technology course for the calendar year 1950, the VA interpreted the law to mean that a prerequisite for a customary rate was a 2-year history, and that where there was no customary rate a fair and reasonable rate would have to be determined by the contracting officer. On October 13, 1950, the contracting officer determined that a rate of $.3127 per student-hour was fair and reasonable, and offered plaintiff a contract on that basis. Plaintiff objected to the rate and rejected the offer. Thereafter, on November 1, 1950, the VA renewed its offer with a rate of $.36 per student-hour. Plaintiff appealed the second determination to the VEAB on November 10. Its Notice of Appeal contended that $.533 per student-hour was the minimum fair and reasonable rate, or alternatively, that a customary cost of tuition of $.50 per student-hour should apply. A hearing followed. Almost one year later, on November 1, 1951, a VEAB hearing examiner anuounced his decision holding that the Badio Technology course had not acquired a customary cost of tuition because it had not been under contract for two successive years, so that a fair and reasonable tuition rate had to be determined; this he set at $.51 per student-hour. The latter determination was appealed by the Administrator of Veterans’ Affairs to the Board which, on January 15, 1953, issued a final decision holding that a fair and reasonable rate for the calendar year 1950 was $.419 per student-hour. Plaintiff was accordingly paid at the rate of $.419 for the year 1950. For the period after 1951, plaintiff was paid at the same rate because at the end of 1951, $.419 became the customary cost of tuition. Plaintiff reserved its right to contest all payments in court.

Plaintiff filed its petition here on May 15,1957, claiming the difference between the $.419 per student-hour paid by the VA for instruction of veterans enrolled in the Radio Technology course and $.533 per student-hour which is allegedly the fair and reasonable rate. Alternatively, plaintiff asks for the difference between $.419 and $.50 which is allegedly the customary rate. It alleges that the VEAB decision was arbitrary, capricious, and not supported by substantial evidence; specifically it charges the Board with “arbitrarily and capriciously disregarding] the cost data submitted by Eastern School, and fix[ing] rates that were neither fair, reasonable nor equitable.”

The government answered on September 13, 1957, and raised the statute of limitations as an affirmative defense. 28 U.S.C. § 2501 (1964 Ed.). It alleged that the portion of the claim which accrued before June 4,1951 was time-barred. Three years later, in July I960', the defendant obtained leave of the court to amend its answer to add three counterclaims. The first and second counterclaims were founded on the False Claims Act which provides that any person who submits or aids in making a false claim “shall forfeit and pay to the United States the sum of $2,000, and, in addition, double the amount of the damages which the United States may have sustained by reason of the doing or committing such, act, together with the costs of suit.” 31 U.S.C. § 231 (1964 Ed.). The first counterclaim is based on the language: “Any person * * * who shall make * * * any claim upon or against the government of the United States * * * knowing such claim to be false, fictitious, or fraudulent * * It relates to “346” students whose tuition plaintiff received directly from the YA after it submitted vouchers showing the attendance of each student. The second counterclaim is based on the language: “Any person * * * who, for the purpose of obtaining or aiding to obtain the payment or approval of [a false claim] * * * causes to be made or used, any false * * * certificate * * *.” It relates to “550” students whose tuition plaintiff received from the students after the YA paid them; plaintiff prepared the attendance records which the students submitted to the YA. The third counterclaim is predicated on section 266 of Public Law 550 and section 1503 of 28 U.S.C. (1964 Ed.), which would allegedly entitle the government to recover overpayments of veterans’ benefits. An additional counterclaim was raised in the trial. It is based on section 2514 of 28 U.S.C. (1964 Ed.) which provides for the forfeiture of the entire claim of any claimant who practices fraud in the prosecution of the claim.

We address ourselves first to the statute of limitations problem, then to the merits of plaintiff’s claim for a higher tuition rate, and finally to defendant’s counterclaims.

i. statute of limitations

Section 2501 of 28 U.S.C. (1964 Ed.) bars a claim in this court “unless the petition thereon is filed within six years after such claim first accrues.” Recently the court reviewed in detail the application of the “first accrual” language to breach claims and disputes clause claims under the standard government contract. Nager Electric Co. v. United States, 177 Ct. Cl. 234, 368 F. 2d 847 (1966). We held that the right of action on disputes arising under the contract (disputes clause claims) first accrues when the administrative action is final, and that a like result should obtain for “a ‘breach claim’ under a contract which has also spawned ‘disputes-type’items in litigation * * * because of the principle that one indivisible contract normally gives rise only to one cause of action.” 177 Ct. Cl., at 262, 368 F. 2d, at 865. The Supreme Court adopted this approach as to disputes clause claims in Crown Coat Front Co. v. United States, 386 U.S. 503, 510 (1967); it did not reach the question of the time of first accrual for breach claims.

This case is not here for review of an administrative decision rendered under a disputes clause. See 41 U.S.C. §§ 321-322 (1964 Ed.). Nor is it here as a breach claim. So Nager Electric might be thought to have no application. However, the reasoning used there is extremely instructive in establishing what formula should be applied in this case. The starting point in Nager Electric was the general rule that first accrual should be “the time when all events have occurred to fix the Government’s alleged liability, entitling the claimant to demand payment and sue here for his money.” 177 Ct. Cl., at 240, 368 F. 2d, at 851. 'It was further stated that “[t]he prerequisite that the plaintiff must be able lawfully to demand payment goes back to the early days of this court.” Ibid. 'Both points were supported by numerous citations. There then followed an analysis of the rule in contract cases before the mandatory disputes clause era and a discussion of aberrations caused by agreements, special statutes, and other factors. The thread running through this analysis is “that there is no single inexorable principle of limitations for contract litigation but that the individual terms, conditions, and practices must always be studied.” 177 Ct. Cl., at 241, 368 F. 2d, at 852-853. From there the court branched off into its analysis of the reason for a special rule of “first accrual” where the judicial claim cannot ripen until the administrative remedy is exhausted. We stop short of that inquiry here, confining ourselves to a review of the contracting situation between plaintiff and the VA which should indicate the proper course for determination of the time of first accrual.

It should be recalled that tbe contract covering the Radio Technology course terminated on December 31,1949, but that plaintiff continued to instruct veterans thereafter. The VA advised plaintiff on September 6, 1950 that it would pay an “interim [tuition] rate” of $.30 per student-hour (as compared with $.50 under the old contract). The letter assured plaintiff that payment of the interim rate would be “without prejudice to [its] * * * right * * * to receive such rate as may be established in the final contract.” The interim rate was boosted to $.375 on November 13, 1950, after plaintiff filed its appeal of the $.36 offer. At this time, plaintiff was instructed to submit vouchers setting forth only the total number of hours of instruction furnished, without any designation of individual students or the number of hours furnished to them. These instructions also advised plaintiff it would ultimately have to prepare an itemized schedule listing each veteran and all applicable fees, to be submitted after determination of a final rate. In a letter dated January 30, 1951, the VA continued this bulk billing arrangement. On July 17, 1952, the VA reversed its position on the bulk billing method; it notified plaintiff it would be given two months to prepare final vouchers in detail and with respect to each veteran for the period of interim payments, and that henceforth interim payments would be made only on the basis of detailed billings for each veteran. Then, on September 26, 1952, the VA sent another letter specifying the procedure for interim payments with regard to each of the following periods: January 1 to December 31, 1950; January 1 to April 30, 1951; from May 1, 1951 on. This letter also defined and set forth procedures covering attendance, absences, and make-up instruction — procedures which had theretofore been undetermined.

This fact pattern suggests to us that plaintiff was not in a position to demand payment of a higher rate until July 17, 1952, at the earliest, and probably September 26,1952. It appears that from 1950 on, both plaintiff and the VA anticipated that there would be a contract which would establish a rate to apply retroactively and prospectively and which would govern the procedure for determining the number of compensable hours of instruction. In fact, the parties were never able to agree on a formal contract and the VA had to unilaterally establish the procedure for substantiating tuition claims for veteran students, and perhaps more importantly, standards for reasonable absences. This it did on September 26,1952. Before that date plaintiff could perhaps have demanded payment of a higher rate and sued upon any refusal, but that would have been inconsistent with the arrangement contemplated by the contracting parties. For all plaintiff knew, the VA might have ultimately given it everything it desired; at least it was not unreasonable for plaintiff to negotiate for two years, hoping that the final arrangements would be satisfactory. In short, we think this is a case in which the familiar principle that first accrual occurs only upon completion of performance should bend to “the individual terms, conditions, and practices” of the particular situation, which point here to September 26,1952 “as the time when all events * * * occurred to fix the Grovemment’s alleged liability.” Nager Electric Co., supra, 177 Ct. Cl., at 240, 368 F. 2d., at 851. Plaintiff’s entire claim is therefore timely.

The government directs our attention to Empire Institute of Tailoring, Inc. v. United States, 142 Ct. Cl. 165, 161 F. Supp. 409 (1958), a rather similar schools case in which the court held a claim time-barred for not being brought within six years of the performance of the services. A tolling argument was there rejected on the grounds that the administrative appeal proceeding was not mandatory. 142 Ct. Cl., at 168; 161 F. Supp., at 411. A more recent case referred to us by Congress, is admittedly in conflict with Empire Institute. Chicago School of Automotive Trades, Inc. v. United States, 167 Ct. Cl. 106 (1964). In the view we take of the present case, however, it is not necessary for us to resolve this conflict and determine whether the cause of action accrued at the time the administrative process was completed. We are simply holding that on the facts of this case, with particular reference to the negotiating posture of the parties, plaintiff could not have practically demanded payment of the higher rate until the VA unilaterally established the procedure for itemizing vouchers and the attendance formula.

II. TUITION" RATE

The Trial Commissioner found the decision of the VEAB (bolding (1) that a tuition rate of $.419 per student-bour for the Radio Technology course was fair and reasonable, and (2) that the estimated annual instructional hours for the course should be 148,720 hours) was “arbitrary, capricious, erroneous, and not supported by substantial evidence.” On the basis of the administrative record and the record made in a trial de novo before him, he determined that the fair and reasonable rate of tuition for the period commencing January 1, 1950 was $.494 per student-hour and that the proper annual instructional hour figure was 145,090. Plaintiff now urges adoption of these findings as modified by the addition of $.024 per student-hour for the allocable cost of supervisory personnel. Defendant argues that the Board decision should not be overturned or modified because its conclusions were supported by the record made before it. This is really an argument that the administrative decision is entitled to finality.

We think the Commissioner correctly found that the Board decision was not supported by substantial evidence on the whole record before it, so that if the decision were entitled to finality, it could be vacated. We also think the Commissioner properly made findings on the tuition rate. This would be true whether or not the Board decision is final. If it is not final, there is, of course, no problem; if it is final, the court may determine the proper rate after concluding that the original decision was not supported by substantial evidence, because it would be futile to suspend proceedings for administrative redetermination by a board that no longer exists. See United States v. Utah Construction Mining Co., 384 U.S. 394 (1966). We adopt all the Commissioner’s findings on the tuition rate except those on supervisory personnel.

The tuition rate per student-hour is determined by totaling expenditures on each of the following items and dividing each total by the number of instructional hours over which it should be spread: Teaching Personnel, Consumable Supplies, Operation and Maintenance, Taxes and Insurance, Administrative Expenses, Depreciation, Rent and Advertising. This produces the correct allocation per student-hour of each cost item. A profit allowance of one-ninth of the total of all costs per student-hour is then added to produce the tuition rate. We briefly review each, of tibe contested components below.

The Board determined that the estimated enrollment in the Radio Technology Course should be 148,720 annual instructional hours for the calendar year 1950. It will be remembered that this figure is the divisor for the purpose of allocating aggregate costs. It arrived at this figure by arbitrarily assuming an enrollment of 44 students in each session (78.57% of the maximum capicity of 56 permitted by the City of New York building regulations) and multiplying this by the 65 hours of instruction per week given in three sessions (44 students per session x 65 hours per week x 52 weeks per year). The Board noted in passing that this estimate was consistent with the actual experience shown by the cost statement for the first 10 months of 1950. The Trial Commissioner adjusted the Board’s figure to take account of the six national holidays which fall in each year. This gives an annual instructional hour figure of 145,090 which both parties accept and which we adopt.

Under VA regulations, plaintiff was entitled to be compensated through the tuition rate for the “[a]ctual cost of teaching and related personnel at reasonable salaries,” the latter category (related personnel) to include “personnel essential to the teaching function such as laboratory supply room attendants and clerical personnel assisting teachers in the preparation of instructional material and records.” 38 C.F.R. § 21.530(b) (1) (1949 Ed.). It appears to be undisputed that generally a tuition rate should include teachers’, laboratory assistants’, and supervisors’ salaries as the cost of “teaching personnel.” The question here is whether plaintiff has proved that its employees qualify.

With regard to the instructors, allocation of their cost to each student-hour of instruction depends on the student-teacher ratio — the lower the ratio, the higher the cost. The Board projected an enrollment of 44 students per session and determined that two teachers would be adequate. This produced a ratio of 22 to 1. We have reviewed the evidence which was before the Board and conclude that the proper ratio is 18 to 1. The Radio Technology course had two aspects; students were taught theory in lecture classes and practice in laboratory classes. The breakdown by hours was 75 percent lecture classes and 25 percent laboratory classes. The capacity of the laboratory was 14 students. This information alone might support the 22 to 1 figure (as well as some higher or lower ratio). There is other evidence, however, indicating 22 to 1 is too high. The VA, in presenting its case to both the Hearing Examiner and the Board on appeal, asked for an 18 to 1 ratio. The plaintiff’s cost data for the period from November 1,1949 through October 31,1950', showed that the actual experience for this period was a 12.8 to 1 ratio. This information suggests that the proper ratio is something less than 22 to 1. The 18 to 1 ratio is supported by the evidence and is in fact a figure satisfactory to both plaintiff and the VA, if not to government counsel.

The student-teacher ratio is applied to the projected student enrollment and the annual rate of compensation per teacher to compute the total figure for “teachers’ salaries.” In its computation of the cost of instruction, the Board used its 22 to 1 ratio and the salary figures stated in the union contracts ($5,565 per annum for day teachers; $3,339 per an-num for night teachers). Plaintiff objects to this computation or two grounds. It objects to the ratio and contends the salary figures are understated because instruction was furnished 52 weeks per year which necessitated substitute teachers for the period the permanent teachers were on vacation. The evidence is clear that all instructors were entitled to three weeks vacation with pay so it must be concluded that the Board’s total figures understated the true salary cost. We adopt the Commissioner’s method of computation which multiplies 2% teachers for each session (the 18:1 ratio applied to 44 students per session) times the annual compensation per teacher as augmented by a vacation allowance.

Plaintiff asks for a similar adjustment (to take account of annual leave) for its laboratory assistants’ expense. It also urges that the figure allowed by the Board should be substantially adjusted upward to reflect the cost of a laboratory assistant or stock room man for every session. The Board apparently determined that the figure used in plaintiff’s cost statement for the period November 1, 1949 to October 30, 1950, was correct and decided accordingly. That figure most likely takes account of the annual leave cost; this follows from the fact that plaintiff’s prior cost statement accounted for the effect of annual leave on these personnel. We agree with the Commissioner that plaintiff has not shown the Board figure to be unsupported by substantial evidence. We also note plaintiff has not been able to prove that its present figure is more accurate than the Board’s.

As noted earlier, the regulations’ definition of “teaching personnel” is sufficiently broad to comprehend supervisory personnel. Defendant would concede this on the condition that the supervisors be “necessary to the performance of the instructional function in the particular course involved.” The Board held that plaintiff failed to prove the necessity of three supervisors to the teaching of the Radio Technology course, and our Commissioner has agreed. We conclude plaintiff should prevail on this point, and that its allocation is reasonable. The supervisors in issue were charged with reviewing the conduct of teachers, preparing forms required by the New York State Department of Education, assuring that tests were properly given, reviewing the progress of students, and guaranteeing that laboratory check sheets and experiments had been completed and properly graded. These functions are closely related to instruction, and indeed necessary for instruction. It is true plaintiff’s proof on this point both before the Board and in the <Le novo trial is primarily the self-serving testimony of one of the partners. It is also true that one of the supervisors was another partner. However, it seems reasonable to conclude (at least as to the two unrelated supervisors) that the supervisors were necessary to the business, absent some showing to the contrary. Plaintiff has proved this much. It is possible that their functions could also be described as administrative functions, but in either case they Avould be compensable (though perhaps in the tuition rate of another course). Another factor that persuades us the supervisors’ salaries should be included in the “teaching personnel” cost is that plaintiff included similar supervisory costs in other YA contracts. As for the amounts, the cost statement for the November 1, 1949 to October 31,1950 period shows three supervisors with total annual wages of $26,820. Plaintiff allocated roughly 12 percent of this figure to the Radio Technology course, reasoning that the allocation should be based on each course’s share of the total number of instructional hours for the school. This produced a total supervisory cost figure of $3,312 which includes vacation pay. This allocation seems quite reasonable. It is the same formula as that used to allocate administrative expenses, and defendant has not challenged the administrative expense allocation.

All salaries were subject to a 4.6 percent payroll tax. There is no dispute that this was part of the salary cost to plaintiff and may be included in the “Teaching Personnel” cost. Thus, the correct computation of the “Teaching Personnel” item is as follows: instructors’ salaries, $37,375; laboratory assistants’ salaries, $2,709.25; supervisors’ salaries, $3,312; payroll tax (4.6% of $43,396.25), $1,996.23; total “Teaching Personnel,” $45,392.48; “Teaching Personnel” per student-hour ($45,392.48 divided by 145,090 hours), $.3129.

The Commissioner also made findings with respect to operation and maintenance, depreciation, and rent expenses. In each case he found that plaintiff had not shown that the Board’s decision was unsupported by substantial evidence, and he refused to consider offers of proof which supported allocation theories not presented to the Board. He did, however, modify the Board’s computations to take account of the changed student enrollment figure. Neither plaintiff nor defendant contest the findings at this stage. We adopt the Commissioner’s computations for this reason and omit references to the substantial evidence test and the refusal to consider offers of proof.

The addition of the supervisors’ salaries and the profit allowance on them (%) to “Teaching Personnel” brings ■the “fair and reasonable” tuition rate to $.5209 per student-hour. This is more than the $.50 per student-hour claimed in the alternative by plaintiff as the “customary cost of tuition.” No doubt plaintiff would be happy to abandon this alternative now, and the defendant would like us to adopt it. We think it is quite clear from the statutory scheme, however, that plaintiff had no “customary cost of tuition” in 1950 since the course was only 11 months old so the YA and the Board quite properly sought to establish the “fair and reasonable” rate whieh we have redetermined.

in. defendant’s counterclaims

(A) First Oov/nterclaim — “<?$?” Students

Defendant’s first counterclaim alleges that Frank Simon, Benjamin Eizenman and their partnership, Eastern School, prepared false vouchers and submitted them to the VA to get tuition payments for “346” students. Specifically, defendant alleges that plaintiff knowingly overstated the attendance of eight veterans which resulted in the overpayment of 213.5 hours, or $89.33. Under the False Claims Act, 31 U.S.C. §231 (1964 Ed.), proof of this allegation would entitle defendant to $178.66 (double the $89.33 damage suffered) plus $10,000 (five forfeitures of $2,000 each, representing the five vouchers or claims which falsely reported the attendance of the eight veterans). The Commissioner found on the basis of the testimony of the eight veterans and other evidence that there was' “clear and convincing” evidence that five of the eight were absent for longer periods than their attendance vouchers indicated and that Frank Simon and Benjamin Eizenman had knowledge of this fact so that the vouchers “constituted false and fraudulent claims for payment presented to and against an agency of the United States.”

We agree with the Commissioner that defendant has the burden to prove by “clear and convincing” evidence that plaintiff knew the claims in question here were false, fictitious, or fraudulent. See Klein v. United States, 152 Ct. Cl. 8, 23, 285 F. 2d 778, 786 (1961); Kamen Soap Products Co. v. United States, 129 Ct. Cl. 619, 642, 124 F. Supp. 608, 620 (1954); United States v. Grannis, 172 F. 2d 507 (4th Cir.), cert. denied, 337 U.S. 918 (1949); McCormick, Evidence § 320 (1954). And we are mindful of the fact that the familiar presumption of correctness of a Commissioner’s findings has additional force here because of the obvious importance of demeanor and credibility which cannot be effectively reviewed in a “cold, printed record.” See Note, Appellate Review in the Federal Oou/rts of Findings Requiring More them a Preponderance of the Evidence, 60 Harv. L. Rev. Ill, 112 (1946). However, we do not adopt all Ms ultimate findings on the first counterclaim because we differ somewhat on the proper application of the burden of proof test; the defendant has not persuaded us by clear and convincing evidence that plaintiff or its partners or agents knowingly submitted false claims.

At most, there is clear and convincing evidence that five of the eight veterans were absent for periods when they were marked present, and that four of the five who were absent informed Simon, Eizenman or an instructor that they would be absent. As the sketches of the five veterans below will show, these facts do not prove fraud. Equally consistent with a fraud explanation of the facts is the explanation that plaintiff’s attendance system may have been deficient, or its record-keeping practices were possibly inaccurate or sloppy. To prove fraud in these circumstances defendant would have to show that Simon or Eizenman or another person in the management group not only “knew” these students were absent, but also wilfully decided to mark them present on the YA-required vouchers, or that there was a policy to misreport, and that Simon or Eizenman made no effort to be certain that students whom they knew were absent would be reported absent. The evidence required] for this showing might be the testimony of an employee regarding his instructions from Simon or Eizenman or the testimony of students that a promise was made to mark them present. The record on the “346” students is barren of such evidence.

For example, the Commissioner found that Anthony P. Papevies was absent at least seven days in July 1955 although the voucher submitted to the YA showed him absent only two days. Papevies testified that he recalled vacationing in Pennsylvania for two full weeks during that July. It is reasonable to assume that his recollection is reliable absent proof to the contrary. He also testified that he told either Simon or Eizen-men that he planned to be absent, and that one of them assured him it would be “all right.” Papevies did not, however, explain what “all right” meant. The YA rules permitted students 30 days of annual leave; for all we know, Simon or Eizenman meant it was “all right” on the assumption he had not yet taken his annual allotment. In short, we adopt the Commissioner’s findings that Papevies was absent seven days in July 1955, but we do not find clear and convincing evidence of fraud.

The unreported absence of Maurice E. DeCuir for 12 days in August 1954 is proved not only by his testimony but also by stamped airline ticket envelopes included in the record on an offer of proof. There is conflicting evidence in the form of an attendance card apparently signed by DeCuir on every school day in August 1954. He did not resolve the conflict by his testimony. He was unresponsive when asked on redirect examination whether he ever completed an attendance card for an extended period on one occasion. The only way to reconcile the conflict is to assume that the testimony regarding his trip and the corroboration provided by the airline ticket envelopes should be entitled to considerably more weight than the attendance card which could very easily have been signed at one time. This, of course, does not show fraud on plaintiff’s part without a statement by the witness that plaintiff or its agents gave him the card in blank and told him they would complete it falsely. Nor does De-Cuir’s testimony that “someone” in the office told him it would be all right to “take the vacation” prove fraud. There is no evidence that he was not entitled to as much vacation as he took. We adopt the Commissioner’s finding that DeCuir was absent for 12 days in August 1954, but do not find clear and convincing evidence of fraud on plaintiff’s part.

The evidence relating to Louis Fishman’s alleged absence for 11 days in July 1955 is again recollection testimony which plaintiff seeks to discredit by referring to a written statement which Fishman gave to the FBI in 1958. He apparently said then that he vacationed in June or July 1955. This statement was not introduced in evidence; it would not serve plaintiff’s purpose if it were. We adopt the Commissioner’s finding that he was absent for 11 school days in July 1955, but do not find fraud. Here there is not even any testimony that Simon or Eizenman told him it would be all right to be away; he only testified that he told Eizen-man and an instructor. We cannot infer from this and the fact that he was reported absent for only two days that plaintiff truly had knowledge of the absences. The clear and convincing standard requires something more than a showing that one student of hundreds stopped a school officer in the hall to report a prospective absence.

Much the same can be said of the evidence relating to Eudolph Stone’s attendance. He was reported absent for two days in each of July and August 1955, but testified that he was on vacation the last week in July and the first week in August — a total of eight school days. There is no reason to doubt his recollection. Of greater significance to the fraud issue, he testified that he told some unidentified representative of the school that he was going away and this person said “we will take care of it in the office.” This suggests fraud, but that is all it does. For clear and convincing evidence we would expect an identification of the representative or at least an assurance that it was a representative. Then also, to determine the meaning of the words, the setting in which they were spoken, is important. The government might have made its proof if it had examined Stone on the surrounding circumstances, or if it had developed through Stone some evidence tying in plaintiff’s conduct to the allowance by the VA of a full subsistence check for the period in which the unreported absences occurred. Instead, the government simply stopped its examination after establishing the absence and the recollection of the conversation. We adopt the Commissioner’s finding on the 8-day absence, but we do not find fraud.

The evidence relating to fraud in the preparation and submission of the vouchers for Joseph Steinberg is perhaps the strongest of all. He testified that after informing both Simon and Eizenman of vacation plans for July 1954 and 1955 he was told: “Go ahead. Don’t worry about it.” Again, there is the problem of the intended meaning of that advice. Objectively, there is nothing in these words to indicate an intent to falsify records. Subjectively, however, they may well permit the inference that Simon and Eizenman promised Steinberg that the school would not report him absent. This inference is supported by Stein-berg’s testimony that he got his $60 per month subsistence allowance for both periods of absence, that he knew the YA only allowed 30 days of leave before deducting $2 for each day of absence, and that he had had a substantial number of absences early in 1955 which probably used up his 30 days. But this inference does not meet the requirements of clear and convincing evidence. As with Stone, the defendant might have been able to prove its case had it conducted a more thorough examination of its witness. It should have examined Steinberg on the circumstances of his discussions with Simon and Eizenman and not stopped after having Steinberg testify that he was absent and that he was told not to worry. There is a hint of fraud in the record before us, but the facts are also consistent with an innocent interpretation. ¡We adopt the Commissioner’s finding that Steinberg was absent for seven days in July of both 1954 and 1955; we do not find fraud.

(B) Second Counterclaim — US60V Students

Defendant’s second counterclaim alleges that Frank Simon, Benjamin Eizenman and their partnership, Eastern School, prepared false vouchers and submitted them to the YA on behalf of veterans entitled to benefits under P. L. 550'. Specifically, defendant alleges that plaintiff knowingly overstated the attendance of nine veterans on 12 different certificates which resulted in overpayments to the veterans. Under the False Claims Act, 31 U.S.O. § 231 (1964 Ed.) proof of this allegation, i.e., that plaintiff “made or used, * * * [a] false * * * certificate * * * for the purpose of * * * aiding to obtain the payment [of a false claim],” would entitle defendant to $24,000 (12 forfeitures of $2,000 each, representing the 12 certificates which falsely reported the attendance of the nine veterans). The Commissioner found on the basis of the testimony of the nine veterans and three teachers who taught “550” students that five of the nine were absent for longer periods that the certificates of training indicated, and that Frank Simon and Benjamin Eizenman had knowledge of this fact, so that the certificates “constituted false and fraudulent claims for payment presented to and against an agency of the United States.”

We think there is clear and convincing evidence that plaintiff knowingly prepared false claims with respect to Jose Rosa-Garcia and Jose A. Huertos-Ramos, and we adopt the Commissioner’s findings with respect to them. For the same reasons that we did not find clear and convincing evidence of a violation of the False Claims Act in our consideration of the first counterclaim, we do not find any violation with respect to the seven other witnesses. We do, however, adopt the Commissioner’s findings regarding the attendance of the other witnesses, omitting his conclusions on the fraud issue.

Jose Rosa-Garcia testified that he went to Puerto Rico on March 18,1956 after his mother died, and stayed there until April 6. This is corroborated by a death certificate. When he returned, he discussed his absence with Simon. On direct examination Rosa-Garcia could not recall what Simon said to him. He recalled only that' he was given an attendance card to sign in blank and directed to return to class. On cross-examination, he was quite firm in declaring that he never told Simon to mark him present nor did Simon promise that he would be marked present. In fact, the school only marked him absent for four days in March 1956, whereas the evidence is clear he was absent at least 12 days. If this were all, we would have to conclude as we did with respect to the first counterclaim, that although the evidence shows Rosa-Garcia was absent 12 days in March 1956, it does not show fraud. The balance is shifted by the testimony of the teachers, notably that of Pablo R. Rancier who was Rosa-Garcia’s instructor. Rancier, Meyer Glikin, and Ralph Paniague, all testified that they were told by Simon and Eizenman in staff meetings and in written memoranda to stop marking a student absent after two consecutive absences. Accompanying those instructions was an explanation that teachers should do this “to give [students] a break * * * because of sickness or something, that they have been absent, and the check [from the VA] would be short.” Rancier stated that the entries he left blank were later completed by someone in the office to show the student present. Glikin and Paniague said Simon or Eisenman told them on several occasions to mark some students present who had been absent beyond the 2-day period. Rancier recalled this was a continuous practice from 1952 to 1957.

Plaintiff does not deny it instructed teachers to leave the attendance record blank after two days of absence. It explains this as a procedure designed to put pressure on veterans to keep good attendance — i.e., the school administration was quickly put on notice of prolonged absences and able to deal with the problem. In addition, Simon and Eizen-man both testified that they never instructed the teachers to report students present who were absent. Plaintiff attempted to discredit the contrary testimony of the teachers by eliciting testimony that the teachers were not happy with working conditions and moved to a competitor school. Where there is such a conflict, we think great weight should be given to the Trial Commissioner’s conclusions. He had the opportunity to observe the witnesses’ demeanor and evaluate their credibility. In this instance, he concluded that the teachers were telling the truth. We adopt this conclusion.

Plaintiff asserts in its exceptions to the Commissioner’s findings that Rancier was Rosa-Garcia’s teacher and that Rosa-Garcia told Rancier on March 18,1956', of his mother’s death and his intention to go to Puerto Rico that day for her funeral. From this, plaintiff infers that Rancier “out of sympathy for the student for the hardship which caused the absence, marked the student present when he was actually absent.” Plaintiff finds support for this inference in Pania-gue’s testimony that he occasionally marked students present who were absent without the office’s approval. This inference falls with the proof that Rosa-Garcia told Simon about the absence. Although there is no proof that Simon prepared Rosa-Garcia’s certificate of training, he knew about the instructions to teachers regarding absences and must have known that either Rancier or someone in the office (who, of course, would be under Simon’s and Eizenman’s control) would follow the procedure and mark Rosa-Garcia present. These are not facts which are equally consistent with a clerical error interpretation. There is clear and convincing evidence that plaintiff instructed the teachers to falsify attendance, that Rancier followed this policy on many occasions, that he knew of Rosa-Garcia’s absence, that Simon (who with Eizenman was responsible for the policy) knew of the absence, and that the certificate of training did not report the absence. Plaintiff cannot avoid responsibility for the false certificate in these circumstances. We adopt the Commissioner’s finding that there is clear and convincing proof of a violation of the False Claims Act so that defendant is entitled to recover from plaintiff Eastern School, Frank Simon,, and Benjamin Eizenman, jointly and severally, $2,000 as a forfeiture.

The evidence relating to Jose A. Huertos-Ramos is similar, although plaintiff comes close to establishing that the proof of the unreported absence is less than clear and convincing. We think defendant has met its burden, however. Huertos-Ramos testified that some time in February 1956 he went to Puerto Rico to visit his mother who was very ill. His recollection was that he was absent from school about 15 days. The certificate of training reported four absences. He further testified; that on his return he wrote the school officials and then went to see them because he was worried that he would get a “short check” from the VA for the period he was away. He “explained the situation” to Simon (or possibly Eizenman, but definitely one of them) who replied, “don’t worry about it.” His worries were later assuaged by the check from the VA which was only “three days short.” Plaintiff cross-examined Huertos-Bamos quite closely on his recollection about the trip to Puerto Bico. It was able to get him to say that he travelled to Puerto Bico frequently in the mid and late ’50s and that his mother had a prolonged illness. This casts doubt on his ability to testify with certainty in 1963 that he went to Puerto Bico in February 1956. In this situation, it is best to defer to the trier of fact who was best situated to evaluate the credibility of the witness. The Commissioner found the defendant had proved Huertos-Bamos was absent during this period; we adopt this conclusion noting that the witness’ recollection of the absence is supported by his memory of a storm in Puerto Bico, which delayed his return, as well as the circumstances of the trip — i.en he responded to a letter from his mother.

The fraud is proved by adding the fact that Bancier was Huertos-Bamos’ teacher. This is enough to tie together the fact of absence, Simon’s knowledge of that fact, and the school’s policy to report students present who were absent. As we concluded with respect to Bosa-Garcia, the cumulative effect of these facts meets the clear and convincing proof requirement; they are not equally consistent with a clerical error interpretation. It is no answer to the foregoing that Huertos-Bamos was entitled to 30 days of annual leave and that he had probably not used it in February or that his mother’s illness might have been a reason for an excused absence. Absences must be reported regardless of the fact that they may be allowable. We adopt the Commissioner’s finding that there is clear and convincing proof of a violation of the False Claims Act so that defendant is entitled to recover from plaintiff Eastern School, Frank Simon, and Benjamin Eizenman, jointly and severally, $2,000 as a forfeiture.

The evidence with respect to Gabino Ocasio-Santiago, Marcos Diaz, and Enrique Nieves-Maldonado proves absences of 17 days (July 1956), 29 days (14 in March, 15 in April 1956), and 15 days (4 in December 1956, 11 in January 1957), respectively, which considerably exceed the number reported. Like the evidence relating to the “346” students in the first counterclaim, however, the evidence proving these absences does not prove fraud. At most it proves that Simon or Eizenman know of the absences and told the students not to worry. There is no tie-in with any of the teachers. Accordingly, we adopt the Commissioner’s findings that these students were absent, but omit his references to fraud.

(G) Third Counterclaim <& Claim of Forfeiture

The third counterclaim is founded on 28 U.S.C. § 1503 (1964 Ed.) which gives this court jurisdiction to give judgments upon set-offs. The set-off is allegedly warranted by those provisions of the G.I. Bill which allow the recovery of overpayments to veterans. The defendant neither submitted evidence of damages nor requested findings of fact with respect to this counterclaim, so we do not discuss it.

Defendant does press here a new counterclaim based on 28 U.S.C. § 2514 (1964 Ed.) which provides for the forfeiture to the United States of a claim “by any person who corruptly practices or attempts to practice any fraud against the United States in the proof, statement, establishment, or allowance thereof.” Proof of this fraud would work a forfeiture of plaintiff’s entire claim. Plaintiff defends against this counterclaim on the ground that it was apprised of it for the first time when it received defendant’s answering brief in November 1966. It cites this court’s present rule 14(b) (9(b) in the prior edition) which provides that “in all averments (1) of fraud (including a plea by the United States that the plaintiff has practiced or attempted to practice fraud within the meaning of 28 U.S.C. § 2514) * * * the circumstances constituting fraud * * * shall be stated with particularity.” In reviewing the transcript, we observed that on February 9,1963, the last day of the trial, government counsel moved to amend the government’s answer and counterclaim to conform to the proof. Section 2514 was the subject matter of the motion. So, plaintiff cannot claim complete surprise. It is correct, however, that defendant failed to follow the rule which sets out the prerequisite to maintaining a section 2514 counterclaim. We, therefore, rej ect this counterclaim without reaching the merits.

(D) Plaintiffs Defenses

Plaintiff argues that a judgment for defendant under the False Claims Act exposes Simon and Eizenman to double jeopardy under the Fifth Amendment because they have already been tried and acquitted in a criminal action as to each item of alleged fraud. Allied to this is a second argument that the doctrines of res judicata or collateral estoppel should apply because of the prior acquittal. In considering these arguments, we assume plaintiff is correct that the criminal action involved the same facts.

The double jeopardy argument is disposed of by United States ex rel. Marcus v. Hess, 817 U.S. 537 (1943), and its successor, Rex Trailer Co. v. United States, 350 U.S. 148 (1956). In those cases, the Court held that the predecessor provisions to the False Claims Act were civil and remedial, not criminal, so that persons subject to them who had already been criminally prosecuted were not put in double jeopardy. The Court noted that the $2,000 “forfeit and pay” provision and double damages sanction might have the appearance of being punitive, 317 U.S., at 551, but that in fact they were appropriate measures of damages in civil actions of this kind — i.e., Congress did not exceed its bounds in arbitrarily setting these indices of full restitution.

Unless the False Claims Act can be considered criminal in nature, the doctrines of res judicata and collateral estoppel can have no application. See Murray & Sorenson, Inc. v. United States, 207 F. 2d 119, 122 (1st Cir. 1953). This follows from differences in the burden of proof. Acquittal in a criminal action means no more than that the prosecution was not able to prove guilt beyond reasonable doubt. It does not mean that the prosecution could not have obtained a conviction had it only to prove guilt by clear and convincing evidence or a preponderance. The Supreme Court cases show that the False Claims Act is not criminal in nature. Accordingly, we hold that the acquittal of Simon and Eizen-man in the criminal proceeding can have no effect in this case.

CONCLUSION

In conclusion, we hold that plaintiff’s claim was timely filed, that the “fair and reasonable” rate of tuition for the Badio Technology course is $.5209' per student-hour which takes account of adjustments to the “Teaching Personnel” cost category including the allowance of supervisors’ salaries, and that plaintiff is liable for two forfeitures of $2,000 each under the False Claims Act.

Judgment shall be entered for plaintiff in the amount of the difference between the rate of $.521 per student-hour and the $.419 determined by the Board, times 1,042,900.3 hours, or $106,375.83, which amount shall be reduced by the $4,000 judgment on defendant’s second counterclaim. The government’s first and third counterclaims, as well as its counterclaim based on 28 U.S.C. ,§ 2514, shall be dismissed.

Nichols, Judge,

concurring:

I concur in the result and in all of the court’s able opinion except the part relating to 28 U.S.C. § 2514. As to that, I reach the same destination by a different road. I agree that the counterclaim should be rejected.

As I read section 2514, it was intended to forfeit any claim if the claimant practiced fraud in the prosecution thereof, not only before the Congress or the Executive branch, but before this court also. Clearly, therefore, the failure to plead section 2514 at the outset would not bar its invocation if the fraud occurred after the pi eadings bad closed. Clearly too the falsity, though begun earlier, continues after the pleadings have closed if the claimant in testimony or otherwise continues to assert what is actually not true. The Government’s theory invoking section 2514 I read as implying this. I believe that in circumstances which need not be spelled out here, but which may at any time occur, it would be the duty of this court to invoke section 2514 sua sponte, whatever the position of the Government’s law officers.

We said in Pewee Coal Co. v. United States, 142 Ct. Cl. 796, 806, 161 F. Supp. 952, 958 (1958), cert. denied 359 U.S. 912 (1959):

The sanction of forfeiture under this statutory provision is harsh, and it can be invoked only when the Government assumes the burden of pleading and proving that a claimant has corruptly practiced fraud. * * *

The Government there had disclaimed any reliance on section 2514 and we stated that the applicability of that section was not before us.

The fine record of the Department of Justice in our lifetimes may make it unthinkable to us that Government counsel would themselves connive in a fraud on the Government, but this is an old statute, B..S. 1086, and in the historic view it is all too thinkable that this could occur. Hence, again, the silence or belated activity of defendant’s counsel does not necessarily mean that we have no duty to perform in the premises. I cannot, therefore, justify my concurrence wholly on the lateness of the hour when the defendant here first invoked section 2514.

We held in Little v. United States, 138 Ct. Cl. 773, 152 F. Supp. 84 (1957) (another veteran’s training school case) that fraud relating to some items of a multi-item claim forfeits all of them under section 2514, but the falsity was widespread and general. Here a few days tuition of two students only, out of thousands, is all the false claim that remains after the conscientious screening of the commissioner, and of the court. To apply the Little case would be to elevate logic over reason and experience.

Such drastic forfeitures are apparently provided for elsewhere in our law, e.g. 19 U.8.C. 1592. I think the Congress intended to rely on tbe Executive branch and on the courts to apply all such provisions in a reasonable manner related to the apparent purpose of the legislation, not just to its literal language. Church of the Holy Trinity v. United States, 143 U.S. 457 (1892). To hold the entire claim forfeit on account of falsity in two items out of thousands would do more to discourage honest persons from doing business with the United States than it would to deter false claims. If reasonably construed, section 2514 is not harsh, though certainly drastic. I think the findings, as modified by the court, fail to disclose anything to justify a more sweeping ultimate finding that plaintiff has corruptly practiced fraud with respect to the proof of the claim generally. Hence, I would restrict the forfeiture to the two items shown to be false.

Skelton, Judge,

concurring in part and; dissenting in part:

I concur in all of the well-written and exhaustive majority opinion, except that portion which finds the plaintiff guilty of fraud with reference to the filing of claims of the two “550” students, Jose Rosa-Garcia and Jose A. Huertos-Ramos. In my opinion, the defendant failed to show by clear and convincing evidence that plaintiff knowingly prepared false claims for these students'with the intent to defraud the government.

In the case of Jose Rosa-Garcia, the evidence shows that he was absent from school twelve days, but he was marked absent for only four days by “someone” (unknown) at the school. When he returned, he discussed his absence with Simon, but neither of them mentioned whether he would be marked present or absent. He signed an attendance card, in blank, and returned to class. The majority opinion states that these facts alone do not show fraud. The opinion then establishes fraud by the testimony of the three disgruntled school teachers who had left plaintiff’s employ and had gone to a competing school after difficulties at plaintiff’s institution. The teachers testified that Simon and Eizenman had instructed them to stop marking a student absent after two consecutive absences, and that on several occasions Simon and Eizenman told them to mark “some students” (they were not identified) present who had been absent beyond the two-day period. The two-day absence rule was explained by plaintiff so it would have notice of absences and could put pressure on the students to remedy the situation. Plaintiff denied it ever told the teachers to mark a student present when he was absent. None of the teachers prepared the attendance record of Jose Rosa-Garcia and no one knows who did. The majority opinion states that although there is no proof that Simon prepared his certificate of training, he “must have known” that either teacher Rancier or someone in the office (under Simon’s and Eizenman’s control) would follow the “procedure” and mark him present. From this, the majority finds plaintiff guilty of fraud. In my opinion, this evidence falls far short of that required to show fraud. It does not show by clear and convincing evidence that plaintiff knowingly prepared a false attendance record for this student, nor that plaintiff knowingly prepared a false certificate or claim for him for presentment to the government with intent to defraud. This is not a conspiracy case and it is not enough for the government to show alleged general acts of misconduct on the part of the plaintiff. It is accused here of a specific act of fraud with reference to a specific student. The fraud has not been proven as required by law.

The Jose A. Huertos-Ramos case is similar to the Jose Rosa-Garcia case, only weaker on the fraud question. He said he was absent fifteen days, but he was marked absent four days. On his return he talked to Simon or Eizenman about his absence. He testified he went to Puerto Rico often in the mid and late 1950’s because of the prolonged illness of his mother. There was considerable doubt that he could testify with certainty in 1968 that he went to Puerto Rico in February 1956. No one knows who prepared his attendance record. The majority opinion once again relies on the fact that Rancier was Huertos-Ramos’ teacher to establish fraud. It says that this ties together the absence, Simon’s knowledge thereof, and the school’s policy to report students present who were absent, and the cumulative effect of all of this is that proof of fraud as to this particular student is shown by clear and convincing evidence. In my opinion, it is neither clear nor convincing and is not the kind of evidence required to show fraud in this case. The teacher did not prepare the attendance record of this student, and neither did Simon or Eizenman. The teacher was not told to mark this student present when he was absent. All that we have is suspicion and inference on top of inference. This is not enough. There is no clear and convincing evidence that plaintiff knowingly prepared a false attendance record for this student or knowingly prepared a false certificate or claim to be presented to the government for or by this student with the intent to defraud.

Accordingly, I would hold that defendant has failed to prove by clear and convincing evidence a violation by plaintiff of the False Claims Act and is not entitled to recover anything from plaintiff on its second counterclaim.

FINDINGS OF FACT

The court, having considered the evidence, the report of Trial Commissioner Franklin M. Stone, and the briefs and argument of counsel, makes findings of fact as follows:

I

Tuition Rate

IDENTIFICATTON OF PLAINTIFF AND NATURE OF BUSINESS

1. Plaintiff was at all times material herein a partnership consisting of Frank Simon, Benjamin Eizenman, Oscar Goldman, Phillip Laster and Samuel Frank, doing business as “Eastern School”, with its principal place of business in the City of New York, New York. Plaintiff was formed in 1946 and commenced operation of a trade school under the name of “Eastern School of Radio & Television” in 1947. In or about 1949, the name of the school was changed to Eastern School (sometimes hereinafter referred to as the “school”). As used in these findings, the plaintiff, Eastern School, includes its predecessor name, Eastern School of Radio & Television.

2. On or about March 18, 1949, plaintiff entered into contract V3006V-292 with the Veterans Administration, whereby training was to be provided for veterans by plaintiff at Government expense for the period January 1,1949 through December 31, 1949, in the following courses at the tuition rates indicated :

Radio Technician course_$.405 per student-hour
¡FM and Television Technician course_$.5866 per student-hour

The tuition rates for those two courses are not in issue in this case.

COURSE INVOLVED

3. On February 1, 1949, plaintiff offered a new course entitled “Radio Technology”. The new course was made the subject of plaintiff’s contract V3006V-292 (see finding 2, supra) with the Veterans Administration by a supplement dated September 16,1949. The rate of tuition for this course, based upon estimated costs of operation, was determined and set by the Administrator of the Veterans Administration at $.50 per student-hour for the calendar year 1949, which rate was set forth in said supplement to the above-identified contract. This was the only contract plaintiff had with the Veterans Administration for teaching the Radio Technology course and it was effective from February 1,1949 (the commencement of the course) through December 31, 1949.

4. All three of the radio and television courses (mentioned in findings 2 and 3, supra) were offered by plaintiff continuously from the time of their inception until about August 1957. Plaintiff offered other types of courses in addition to those in radio and television.

DESCRIPTION OF COURSE

5. The Radio Technology course, which is the only one in issue here, encompassed a great deal of high-level theoretical and practical applications of advanced radio and radar techniques. The course included work by the student on radar, X-ray, and diathermy equipment, and high-level generation and transmission equipment encompassing ultra-high frequencies. In order to take the Radio Technology course, the prospective student was required to complete both the Radio Technician, and the FM and Television Technician, courses, or to complete a course plaintiff gave for a period of time in comprehensive electronics, or possess a high school diploma, or pass a written examination encompassing the basic tech-ñiques covered in the Radio Technician, and FM and Television Technician courses. The Veterans Administration recognized the normal progression from the Radio Technician course to the FM and Television Technician course, and then to the Radio Technology course.

CONTRACT NEGOTIATIONS

6. During the year 1950, plaintiff submitted its cost data, and negotiations were carried on between the Veterans Administration and plaintiff for a contract covering the Radio Technology course to be effective for the year 1950. On October 13,1950, the contracting officer of the Veterans Administration determined that a tuition rate of $.3127 per student-hour for said course for the year 1950 was fair and reasonable, and the Administrator of Veterans Affairs offered plaintiff a contract providing for such a rate. Plaintiff declined to accept the rate fixed by the contracting officer and rejected the contract offered by the Administrator. Thereafter, on November 1, 1950, the Administrator offered plaintiff a contract which included a determination by the Administrator that a tuition rate of $.36 per student-hour for the course in Radio Technology for the year 1950 was fair and. reasonable.

ADMINISTRATIVE ACTIONS — HEARINGS

7. On or about November 10,1950, plaintiff filed a Notice of Appeal with the Veterans Education Appeals Board (hereinafter sometimes referred to as the “VEAB” or the “Board”) in which plaintiff appealed the determination of the Administrator of Veterans Affairs that a tuition rate of $.36 per student-hour for the course in Radio Technology for the year 1950 was fair and reasonable. Plaintiff contended on appeal that it was entitled to a rate of $.533 per student-hour as its fair and reasonable rate of tuition, or, alternatively, that it was entitled to a “customary cost of tuition” at the rate of $.50 per student-hour.

8. After a hearing, the Hearing Examiner for the VEAB issued an initial decision, dated November 1, 1951, in which he found that the Radio Technology course had acquired no customary cost of tuition since it had not been in existence for 24 consecutive months, and that a fair and reasonable tuition rate was $.51 per student-bour. On December 3,1951, the Administrator of Veterans’ Affairs appealed to the Board from the Hearing Examiner’s decision on eight grounds, one of which was that the Hearing Examiner erred in finding that $.51 per student-hour was a fair and reasonable rate of tuition.

9. (a) After reviewing the record, including the Examiner’s initial decision of November 1, 1951, and hearing oral argument, the VEAB, on January 15, 1953, issued its final decision in which it determined that plaintiff did not have a customary cost of tuition for its course in Radio Technology, and that a fair and reasonable tuition rate for the course for the year 1950 was $.419 per student-hour, with operating costs allowed as follows:

Per Student-Amount Hours Hour
Teaching Personnel_$33,103.02 for 148,720 $.2226
Consumable Supplies__ 7,138.66 " 148,720 . 0480
Operation and Maintenance_ 12,388.11 " 1,206,162 .0103
Taxes and Insurance_ 661.96 " 148,720 .0038
Administrative Expenses. 68,160.76 " 1,206,162 . 0483
Depreciation. 1,400.60 " 148,720 .0094
Rent. 13,978.60 " 1,123,816 .0124
Advertising. 26,696.69 " 1,206,162 .0221
Total. $.3769
Profit Allowance (1/9 of total)..0419
Rate of Tuition_ $.4188 per Student-Hour1
1 The Board rounded $.4188 to $.419.

(b) Plaintiff does not contest the Board’s allowance for consumable supplies, taxes and insurance, administrative expenses, or advertising. The only items in dispute in these proceedings are Teaching Personnel, Operation and Maintenance, Depreciation, and Rent.

PAYMENTS TO PLAINTIFF

10. On March 17,1953, the Veterans Administration wrote plaintiff that payments would thereafter be made to plaintiff for the Radio Technology course on the basis of the allowed operating costs and resultant rate indicated in the Board’s decision of January 15,1953. Plaintiff was in fact paid, effective from January 1, 1950, at the rate of $.419 per student-hour for subject course. Plaintiff, however, accepted such payments without prejudice to its right to have another rate established and on each voucher submitted by plaintiff, it inserted the following statement:

It is understood and agreed that receipt of payment of this voucher shall be without prejudice to the payee’s right to have a rate established pursuant to applicable statutes or competent tribunal or any court of competent jurisdiction.

11. Subsequent to December 16,1951, the rate of $.419 per student-hour established by the Board was considered to be the school’s “customary cost of tuition”.

plaintiff’s affirmative claim

12. (a) On June 4, 1957, plaintiff filed its petition herein, seeking to recover the difference between the amount ($.419 per student-hour) which plaintiff received from defendant, acting through the Veterans Administration, for providing instruction, pursuant to the Servicemen’s Readjustment Act of 1944, Public Law 346, 58 Stat. 284 (1944), as amended, 38 U.S.C. §§ 693, et seq. (1952 Ed.), to veterans, commonly called “Public Law 346 Veterans” or “students”, enrolled in the Radio Technology course during the period from January 1, 1950, and thereafter, and the amount ($.5333 per student-hour) which the plaintiff claims to be “fair and reasonable” for such instruction. Plaintiff contends that the tuition rate of $.419 per student-hour set by the VEAB was neither fair, reasonable nor equitable, and alleges that the Board arbitrarily and capriciously disregarded plaintiff’s cost data which justified its claim of entitlement to a tuition rate of $.533 per student-hour. Plaintiff specifically claims the difference of $.114 for 1,043,019.3 instructional hours which computes to a total of $118,904.20.

(b) Alternatively, plaintiff contends that in the minimum it established a customary cost of tuition of $.50 per student-hour, the rate set by the Administrator of the Veterans Administration for the year 1949, and that this rate should have been applied for the year 1950 and thereafter. Since tins is really a legal argument predicated on the statute, most of the findings in this report are predicated on establishing a “fair and reasonable” rate of tuition.

ESTIMATE OP STUDENT ENROLLMENT

13. (a) To determine the proper allowance for each of the contested items, i.e., teaching personnel, operation and maintenance, depreciation and rent (see finding 9, supra), it is first necessary to determine if the Board’s estimate of student enrollment is correct, since this figure is used as a divisor in arriving at the student hourly rate for teaching personnel and depreciation. With respect to the foregoing, the Board’s decision of January 15, 1953 (see finding 9(a), supra) reads in pertinent part:

No calculation of a rate of tuition is acceptable which is not based upon a careful estimate of the student enrollment during the period for which the rate is to prevail. In making such an estimate, past enrollment experience is of little value where, as in the original cost data here, it is for a few months only in a new and expanding course, and has nowhere approached the maximum capacity of available facilities. The State approval agency ordinarily sets forth the maximum permissible enrollment in its approval of a new course, and here has established the figure of 75 students per session. For our purpose, however, that figure must be replaced by another obtained from the limitation imposed by City building authorities to the effect that not more than 59 persons could be present at any one time in the area available for the conduct of this course. Because of the necessary inclusion of instructional personnel among the persons present, the applicant could not enroll more than 56 students in any one session of the Kadio Technology course.
A projected enrollment of 44 students in each session would constitute 78.57% of this maximum of 56, which is not considered to be unreasonable. The applicant offers 25 hours of instruction per week in its morning session, the same in its afternoon session, and 15 hours per week in its evening session. Thus, 44 students in each session would provide a total of 148,720 annual instructional hours, which is adopted by the Board for use as a divisor into certain allowable costs for the period in issue. While .this figure is considerably higher than the total number of instructional hours during the first
9 months of operation as shown in the original cost data, actual achievement during the first 10 months of 1950 was 128,880 instructional nours, providing virtual certainty that 148,720 hours is not too high an estimate for the whole of 1950. In the month of October, 1950, alone, 22,093 instructional hours were provided, as compared with 26,874 hours for the whole of the 9 months of operation in the cost-data period.

(b) It is obvious that the projected enrollment figure of 44 students per session was arbitrarily adopted by the Board. However, plaintiff does not argue with defendant’s computation and appears to agree with the enrollment figure of 44.

(c) The cost statement for the period from November 1, 1948 to October 31, 1949, showed that the number of hours of instruction per month in the Badio Technology course from November 1, 1948 to October 31, 1949, was as follows:

February 1949. March_ April_ May_ June_ July-August_ September_ October_ bO CO CO bD tO CO CO CO bO COOOl-AOi^OMCOCO l>OHHWO£».CimCOtO
Total_ 26, 874

However, as can be seen from (a) above, the Board did not use this information in determining the annual instructional hours.

(d) The cost statement for the period November 1, 1949 to October 31, 1950, showed that the number of hours of instruction per month in the Badio Technology course from November 1,1949 to October 31,1950, was as follows:

November 1949_ 5,205
December_ 5,885
January 1950- 10,069
February- 8,158
March_ 12, 098
April_ 11,558
May___ 12, 935
June_ 13,328
July_ 11,616
August--- 13, 640
September_ 13, 385
October_ 22, 093
Total_ 139,970

However, as can be seen from (a) above, tbe Board did not use this information in determining tbe annual instructional hours.

(e) In arriving at a total enrollment figure of 148,720 annual instructional hours, the Board did not make any allowance for the fact that plaintiff gave no instruction on each of six national holidays during the year, i.e., New Year’s Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, and Christmas Day. The annual instructional hours lost in the morning session (which lasted five hours) by reason of the holidays amount to a total of 1,320 hours (44 students x 5 hours per session x 6 holidays). The same calculation of 1,320 hours lost for holidays applies to the afternoon session. For the evening sessions (which lasted 3% hours), the total time lost for holidays is 990 hours (44 students x 3% hours per session x 6 holidays). Accordingly, the Board’s estimated total number of instructional hours, 148,720, must be decreased by the 3,630 hours lost by reason of holidays which results in a proper annual instructional hour figure of 145,090. Even though a few of the holidays will fall on non-school days, it is reasonable to assume there will be other days throughout the school year when there will be no school which will compensate for the instances when one of the holidays falls on a non-school day. Even though the allowance for the holidays cannot be precise, it cannot be said to be unreasonable or better than not having such an allowance at all.

TEACHING PERSONNEL

14. Plaintiff claimed $10,088.03 for instructional expenditures in its cost submission for the period November 1,1948 to October 31, 1949, for furnishing 26,874 student-hours of instruction. The salaries which made up the $10,088.03 were adjusted upwards to the rate payable in 1950 because of a known salary increase effective in 1950, in accordance with plaintiff’s contract with the teacher’s union. In its cost statement for the period November 1, 1949 to October 31, 1950, plaintiff claimed instructional expenditures of $50,-821.29 for furnishing 139,970 student-hours of instruction. The Board allowed a total of $33,103.02 for instructional expenditures for calendar year 1950, which, it divided by 148,720, the Board’s estimated number of instructional hours, resulting in an allowance of $.2226 per student-hour.

15. In arriving at the amount of $33,103.02 allocated to teaching personnel which was one of the items challenged by plaintiff, the Board took into consideration the student-teacher ratio, the teachers’ salaries, the laboratory assistants’ salaries, and the supervisors’ salaries, which together constitute the total of the teaching personnel.

Btudent-Teaoher Batió

16. (a) After finding that a projected enrollment of 44 students per session would be reasonable, the Board stated in its decision the following in regard to the student-teacher ratio:

The allowance for salaries for teachers must be sufficient to employ the number of teachers necessary to instruct a student body of the size anticipated for the period in issue. With a projected enrollment of 44 students per session, two instructors per session should he adequate. The Board does not consider a student-teacher ratio of 22 to 1 to be unreasonably high for the applicant’s course in Badio Technology which is admittedly conducted with the emphasis on theory rather than practice, and more time in the classroom than in the laboratory.

(b) Plaintiff disputes the fairness of the Board’s determination of a student-teacher ratio of 22 to 1 which, as can be seen from the above portion of the Board’s decision, is based on two teachers for each session of 44 students. Plaintiff contends that the teaching of 44 students per session required 2y2 teachers. Although plaintiff has not specifically computed a student-teacher ratio, plaintiff’s contention of 2y2 teachers per 44 students results in a student-teacher ratio of 17.6 to 1.

17. (a) During the entire period plaintiff provided the Badio Technology course, its length was 1,200 hours and consisted of 75 percent theory, or lecture, classes and 25 percent laboratory classes. The equipment used in the laboratory class consisted of radar equipment, X-ray equipment, diathermy equipment, high-frequency transmission equipment, signal generators, vacuum tube volt meters, and assorted test equipment. During 1949 and 1950, plaintiff was unable to accommodate more than 14 students in the laboratory class of the Radio Technology course because of the physical limitations of the space available for laboratory instruction. Additionally, plaintiff’s partners considered it educationally unsound to have more than 14 students in the laboratory class at one time. In light of the foregoing limitations, plaintiff contends that it would take 2% teachers to instruct 44 students. As mentioned previously, this results in a student-teacher ratio of 17.6 to 1.

(b) The Hearing Examiner of the VEAB, in arriving at his decision of November 1, 1951, considered only the cost statement submitted by plaintiff for the period from November 1, 1948 through October 81, 1949, and disregarded plaintiff’s statement setting forth its actual cost experience for the period from November 1, 1949 through October 31, 1950. The Hearing Examiner’s said decision does not specifically include a determination of the proper student-teacher ratio. However, it appears from the administrative record that plaintiff’s actual cost experience for the period November 1, 1949 through October 31, 1950, showed a student-teadher ratio of 12.8 to 1. The record of the proceedings before the Examiner shows that the Veterans Administration presented oral testimony and other evidence in support of its position that a student-teacher ratio of 18 to 1 was fair and reasonable, and that said ratio had been properly used in Calculating the $.36 student-hour tuition rate, which the Administrator of Veterans’ Affairs, on November 1,1950, established as being fair and reasonable.

(c) In its brief to the VEAB, and on oral argument before the Board, the Veterans Administration argued that the evidence supported its contention that a student-teacher ratio of 18 to 1 was fair and reasonable, and it did not suggest a higher ratio was proper or should be adopted by the Board. Plaintiff continued to object to the 18 to 1 ratio used by the Veterans Administration in its calculation of the $.36 rate on the grounds that said ratio was too high.

(d) On appeal to the Board by the Veterans Administration, no new evidence was submitted to the Board by either party and the Board simply heard oral argument presented on behalf of plaintiff and the Veterans Administration. At no time during the oral argument before the Board or proceedings prior thereto was any suggestion made by the Veterans Administration or the Board that a ratio of 22 to 1, or a ratio higher than 18 to 1, would be fair and reasonable. Certainly, it is clear that plaintiff was never placed on notice and given an opportunity to oppose the ratio of 22 to 1 which the Board found in its final decision to be fair and reasonable.

(e) The Board does not point to any evidence or give any substantive reasons in support of its bare conclusionary findings that with a projected enrollment of 44 students per session, “two instructors per session should be adequate” and that the Board “does not consider a student-teacher ratio of 22 to 1 to be unreasonably high * * (See finding 16 (a), supra.)

(f) The administrative record reflects that the Vice President and General Superintendent of the R.C.A. Institute in New York, New York, presented testimony at the hearing before the Hearing Examiner to the effect that in the early part of 1948, a State Supervisor of the New York State Department of Education had verbally indicated that said Institute should have a student to faculty ratio of 35-1 in a lecture class, and a ratio of 25 to 1 in a laboratory class. It appears that in 1949-1950, the Institute offered a course in Advanced Technology which the Veterans Administration claimed was substantially similar to the Radio Technology course offered by plaintiff here involved. The record does not show what the student-teacher ratio actually was in the Advanced Technology course, but a reasonable inference can be made that the ratio was higher than 18 to 1. While it appears that the Advanced Technology course was somewhat similar to the Radio Technology course offered by plaintiff, the record also shows that there were substantial differences in the two courses, both as to prerequisites to entering the courses and as to subjects taught. Furthermore, there is no evidence of record which shows that the theory and laboratory classroom facilities available and used by the R.C.A. Institute and plaintiff were physically comparable.

(g) The administrative record also discloses that plaintiff represented to the New York State Department of Education that a higher student-teacher ratio existed in the Radio Technology course than the ratio proposed by the Veterans Administration and the ratio adopted by the Board. However, the aforementioned evidence is not relevant to determination of the proper ratio here because such evidence relates to a period subsequent to the one here in issue and is not concerned with the training of veterans under Public Law 346. Furthermore, the student-teacher ratio determined by the New York State Board of Education to be proper appears to have been based upon a maximum, rather than a typical, enrollment.

(h) Considering the foregoing and the whole record, particularly the physical space limitations of the laboratory facilities used and available to plaintiff, the fact that on the basis of detailed studies the Veterans Administration used a student-teacher ratio of 18 to 1 which it considered fair and reasonable in computing plaintiff’s student-hour tuition rate, and that at no time during the proceedings before the Hearing Examiner or the Board was a ratio of 22 to 1, or a ratio higher than 18 to 1, mentioned 'by either the Veterans Administration, the plaintiff, or the Board, it cannot be found that the Board’s determination of a student-teacher ratio of 22 to 1 was based upon substantial competent evidence of record. It is further concluded and found that a student-teacher ratio of 18 to 1 is supported by the evidence and is fair and reasonable. Undoubtedly more than 18 students, and probably as many as 30 students, could have attended the theory class in the Radio Technology course offered by plaintiff in 1950, but it is clear that the laboratory classroom available for the course in that year could not accommodate more than 14 students at any one time, and one-fourth of the instruction consisted of laboratory work. The 22 to 1 student-teacher ratio, arrived at simply by merely dividing a projected student enrollment figure of 44 by 2 and assuming that one teacher could teach 22 students each session at all times, is not logical or realistic.

Teachers' Salaries

18. (a) Using a student-ratio of 22 to 1, the Board allowed a total of $28,938 for four day teachers and two night teachers. The rationale of the Board and the manner in which it computed said allowance for teacher expense is shown by the following portion of the Board’s decision:

For the first 4 weeks in 1950, day teachers were employed at a salary of $87.50 per week (teaching 25 hours per week). The corresponding salary for night teachers (15 hours per week) is $52.50 per week. From February 1, 1950, teachers’ salaries were governed by the contract between the applicant and the union effective on that date. * * * Giving to the applicant the benefit of any doubt, it is assumed that all persons teaching the Badio Technology course during 1950 had sufficient seniority (acquired in applicant’s other courses, if not in this one) to qualify for $105 per week as a day teacher or $63 per week as a night teacher until May 1, 1950, and for $110 or $66 per week thereafter. Thus, a day instructor would receive $87.50 per week for the first 4 weeks of 1950, $105 per week for the next 13 weeks, and $110 per week for the next 35 weeks, for an annual total of $5,565. At the $52.50, $63, and $66 weekly rates, a night instructor would receive an annual $3,339. * * *

(b) Plaintiff does not object to the Board’s allowance of $5,565 annual salary for each of the four day instructors, or the allowance of an annual salary of $3,339 for each of the two night instructors. However, plaintiff contends that the Board should have added vacation allowance to each of the salaries for these six teachers. The Badio Technology course was offered continuously throughout the year and there is no evidence that any of the classes in the course were suspended during times the teachers assigned to the course were on vacation. Thus, plaintiff was required to provide teachers to conduct these classes 52 weeks a year. The union contract referred to in the above excerpt from the Board’s opinion provides that when an instructor has completed one full year of employment, he shall accrue vacation time at the rate of one and one-quarter days per month of employment, such accrual not to exceed fifteen working days in any year. For purposes of the vacation allowance, all the instructors would be entitled to three weeks’ vacation. It is not reasonable to believe that any of the teachers would take over another instructor’s classes and work hours in excess of the number required under the union contract without receiving additional compensation therefor. Considering the foregoing, it is reasonable to conclude that the plaintiff school incurred additional teaching expense during the periods of time teachers were on vacation, either as a result of paying another teacher to teach the classes of a vacationing teacher, or by paying “double” pay to a teacher who chose to work instead of taking the vacation time to which he was entitled.

(c) Based on the union contract, the total expense for a day instructor would be $5,565, plus $330 for vacation allowance ($110 per week for 3 weeks), or a total of $5,895. The total expense for a night instructor would be $3,339, plus $198 for vacation allowance ($66 per week for 3 weeks), or a total of $3,537.

(d) Applying a student-teacher ratio of 18 to 1 (herein-before found to be proper, see finding 17 (h), supra) for 44 students per session results in a determination of 2% teachers for each of the three sessions. Therefore, the Radio Technology course would require 4% day teachers at an annual teaching expense of $5,895 per teacher, or a total of $28,886 ($5,895 x 4.9). The course would require 2% night teachers at an annual teaching expense of $3,537 per teacher, or a total of $8,489 ($3,537 x 2.4). Consistent with the foregoing computation, it is found that the fair and reasonable amount that properly should be allowed plaintiff for “teachers’ salaries” allocated to the Radio Technology course totals $37,375, rather than the $28,938 allowed by the Board.

Laboratory Assistants

19. (a) In plaintiff’s cost statement for the Radio Technology course for the period November 1, 1948 through October 31,1949, plaintiff claimed expenses for one “Assistant Teacher” in the amount of $526.72, which included $70.00 for “Accrued Leave”. The assistant teacher was actually a stockroom man. In the cost statement for the period November 1,1949 through October 31,1950, the assistant teacher mentioned above was listed as a laboratory assistant with a total salary of $3,261.71 of which 50 percent, or $1,630.86, was allocated to the Radio Technology course. Another laboratory assistant was also listed in this later cost statement at a total salary of $2,156.81 with 50 percent, or $1,078.40, allocated to the Radio Technology course. This cost statement does not show that the total amount of expense claimed for laboratory assistants included an allowance for accrued leave. Considering the fact that the amount claimed in the cost statement for the earlier period included an allowance for accrued leave, it is reasonable to conclude that the total in the cost statement for the later period included an amount for accrued leave. The Board found that the total of $2,709.-25 ($1,630.85 and $1,078.40) which was the total listed on the cost statement for the period of November 1, 1949 through October 31, 1950, for the equivalent of one laboratory assistant for the Radio Technology course was reasonable and should be added to the allowance for instructional personnel.

(b) The duties of the stockroom man or laboratory assistant consisted of issuing and repairing equipment, making up kits for the students, keeping records, and helping the theory teacher set up demonstrations in the classrooms. Plaintiff contends that the operation of the Radio Technology course required the presence of a stockroom man during each of the three sessions. Plaintiff asserts that in 1949, a stockroom man. was paid at the rate of $55 per week, which is slightly in excess of $1.25 per hour, so that a stockroom man working 25 hours per week in the morning session Avould earn $31.25 per week or $1,625 per year; that a like amount would be required for the afternoon session; and that for the evening session of 15 hours per week, the annual salary would be $975. To this total, plaintiff added three weeks’ vacation pay of $93.75 each for the morning and afternoon sessions, and $56.25 for the evening session, which amounted to a total of $4,468.75 for maintaining a stockroom man during the three sessions for one year. Plaintiff contends that the amount of $4,468.75 should be awarded in place of the $2,709.25 allowed by the Board for laboratory assistants. As indicated in (a) above and footnotes 2 and 3, the amount claimed 'by plaintiff, which includes an allocation for vacation pay, is not supported by books, records or other documentary evidence in this record.

(c) The $2,709.25 which the Board allowed plaintiff for laboratory assistants is the exact amount the plaintiff allocated to laboratory assistants in its cost statement for the period November 1,1949 through October 31,1950. As indicated in (a) above, it may be reasonably assumed that said amount included an allowance for accrued leave. An amount for laboratory assistants which equals the highest amount claimed by plaintiff in the two cost statements it relied upon before the Board would appear to be fair and reasonable. On the basis of the whole record in this case, it is concluded and found that there is no ground for increasing the amount allowed by the Board for expense for laboratory assistants.

Supervisors

20. (a) Plaintiff did not claim as part of its teaching costs any supervisory expense in the cost statement submitted for the period of November 1, 1948 through October 31, 1949, because of the small number of students involved in the Radio Technology course at that time. In its cost statement for the period November 1, 1949 through October 31, 1950, plaintiff listed among its expenses for teaching personnel three supervisors at total salaries of $8,410, $8,410 and $10,000 of which 12 percent of each was allocated to the Radio Technology course or $1,009.20, $1,009.20 and $1,200, respectively, or a total of $3,218.40. In its previous contracts with the Veterans Administration, plaintiff had always included supervisory costs. With respect to the supervisory expense listed and claimed by plaintiff, the Board stated in its decision, in pertinent part, as follows:

* * * The evidence regarding these men [the three supervisors] reveals only that they do not teach. The record does not establish to the satisfaction of the Board that the services of these men are necessary to the performance of the instructional function in this course, and no allowance is made for any portion of their salaries herein. The allowance for Administrative Expenses * * * should 'be sufficient to provide such supervision as may be found necessary for two instructors per session.

(b) The duties performed by the supervisors included checking on the teachers, filling out a form required by the New York State Department of Education, making certain that tests were given, checking on the progress of the students, and checking to see if laboratory check sheets and experiments had been turned in and graded properly. These functions are closely related to teaching, and indeed necessary for instruction. See 88 C.F.B. § 21.530 (1949 Ed.). It is true plaintiff’s proof on this point, both before the Board and in the de novo trial, is primarily the self-serving testimony of one of the partners. It is also true that one of the supervisors was another partner. However, it is reasonable to conclude that the supervisors were necessary to the school absent some showing to the contrary.

Plaintiff contends that the morning and afternoon supervisors were paid by it at the rate of $160.00 per week, and based on the expanded enrollment of the Badio Technology course used by the Board, 12 percent of the instructional hours given by plaintiff should be allocated to said course. An allocation of 12 percent of the supervisory costs to the course would result in an annual supervisory cost for the morning session of $998.40 and a like amount for the afternoon session. The addition of vacation pay would raise these costs to $1,056 per session. The supervisor for the evening session was paid $10,000 per year and on an annual basis his salary allocable to the Badio Technology course would be $1,200 to which plaintiff did not add vacation pay because the salary was the maximum allowable by the Veterans Administration. On the basis of the preceding evidence introduced by the plaintiff at the trial held in this court, plaintiff contends that the total supervisory cost was $3,3Í2, which amount was more than appearing in the cost statement for the period November 1, 1949 through October 31, 1950, mentioned in (a) above, because it takes account of the adjustment to the estimated instructional hours. This allocation seems quite reasonable. It is the same formula as that used to allocate administrative expenses, and defendant has not challenged the administrative expense allocation.

(c) Plaintiff has shown that the supervisors were necessary to the instruction function, and should have accordingly been numbered among the “Teaching Personnel.” The supervisory cost allocable to the Eadio Technology course for 1950 was $3,312.

Payroll Taxes

21. (a) The portion of the Board’s decision relating to payroll taxes and the Board’s concluding statement concerning the total allowance it was making for Teaching Personnel expense reads as follows:

To the total allowance for instructional salaries of $31,647.25, there is added $1,455.77, or 4.6%, that being the amount provided for payroll taxes throughout the record, wherever salaries have been involved, without oppugnancy by the Veterans Administration. The total allowance for calendar 1950 under this heading, [i.e., Teaching Personnel] then, is $33,103.02. Since this allowance is directly allocable to the Eadio Technology course alone, and since the instructional hours for said course have been estimated at 148,720 for the period in issue, the allowance, in terms of student-hours, is $.2226.

(b) As noted in finding 18(d), supra, it has been found that the proper amount of the allowance for teachers’ salaries to which plaintiff is entitled totals $37,375. Therefore, the proper allowance for instructional salaries allocated to the Eadio Technology course for the year 1950, including $2,709.25 allowed by the Board for the equivalent of one laboratory assistant (see finding 19(a), supra), which has been found to be fair and reasonable (see finding 19(c), 'supra), and $3,312 for supervisors’ salaries (see finding-20 (c), supra) is found to total $43,396.25. To this total must be added 4.6 percent, or $1,996.23, for payroll taxes, which results in a total allowance for teaching personnel of $45,-392.48, to which it is found plaintiff is entitled.

22. In summary, the total allowance for teaching personnel is $45,392.48, which consists of an allowance of $37,375 for teachers’ salaries, an allowance of $2,709.25 for laboratory assistants’ salaries, an allowance of $3,312 for supervisors’ salaries, and 'an allowance of $1,996.23 for payroll taxes. It has been found that the estimated instructional hours should be 145,090 hours instead of 148,720 hours as found by the Board. (See finding 13 (e), supra.) Therefore, it is found that the student-hour rate 'for teaching personnel should be $.3129 per student-hour ($45,392.48 divided by 145,090 hours) rather than $.2226 per student-hour as found by the Board.

OPERATION AND MAINTENANCE

23. Plaintiff listed in the cost statement it submitted covering the period of November 1,1948 through October 31, 1949, expenditures of $12,388.11 for operation and maintenance for teaching a total of 1,205,152 hours of instruction in all courses in the school. Plaintiff then claimed in this cost data that 2.2 percent of the school’s total instructional hours were allocated to the Eadio Technology course and on that basis plaintiff claimed expenditures of $272.54 for 26,874 hours of Eadio Technology, or the equivalent of $.0101 per instructional hour. The Board’s decision relating to the aforementioned item of expense claimed by plaintiff reads in pertinent part:

* * * This provides a unit cost of $.04$ per student-hour, which is not in dispute. Translated to the period in issue, with its anticipated 148,720 instructional hours, the total allowance for consumable supplies is $7,138.56.

Plaintiff does not contest this computation, so it is adopted.

DEPRECIATION

24. The claimed valuation of depreciable equipment in the cost statement which plaintiff submitted to the Veterans Administration covering the period from November 1, 1948 through October 31, 1949 was $2,490. The claimed valúation of depreciable equipment in the later cost data submitted to the Board covering the period from November 1, 1949 through October 31, 1950, was $7,003. The Board found that the increase of 281 percent in the valuation of depreciable equipment was not unwarranted in view of the greater increase in instructional hours in the course. Twenty percent is the annual depreciation rate and is not disputed by the parties. The Board allowed a figure of $.0094 per instructional hour which allowance was determinied by dividing $1,400.60, the depreciation allowance (20% of $7,003.00), by 148,720, the Board’s estimated student enrollment figure.

In the trial, plaintiff sought to prove that a different calculation was correct. It does not now challenge the Board’s calculation, so it is hereby adopted. However, it has been previously determined (finding 13(e), supra) that the estimated student enrollment should be 145,090 hours instead of 148,720 hours found and used by the Board; therefore, it is found that the proper rate should be $.0097 per student-hour ($1,400.60 divided by 145,090 hours).

RENT

25. With respect to the contested item of rent expense, the Board’s decision reads as follows:

The applicant’s actual rental expense for 1950, for the entire building with the exception of the first floor, is arrived at as follows: The record reveals that the total rental from November 1,1949, through October 31,1950, was $13,467.90, and that the annual rental commencing May 1, 1950, was $15,000. Therefore, for the last 6 months of the aforementioned period the rental was $7,500 ($1,250 per month), and for the first 6 months was $5,967.90 ($994.65 per month). In calendar year 1950, the first 4 months would be at the old rate of $994.65 per month ($3,978.60), and the last 8 months would be at the new rate of $1,250 per month ($10,000), for a total annual rental of $13,978.60.
The applicant alleges that 20% of the area which it occupies is devoted to the Radio Technology course. However, it has not been shown, and indeed appears doubtful, that the space on the fifth floor is of equal rental value with all other space included in the annual rental. In any event, an apportionment of total rent by student-hours is deemed more equitable in a situation involving a major shift in enrollment as between one course and another. How, then, to determine the cost of rent per student-hour ?
The original cost data, while showing total instructional hours for the period from November 1, 1948, through October 31,1949, does not disclose the total rent paid during that period, which is necessary to the calculation to be made. The statement of claimed actual expenses for the period from November 1,1949, through October 31, 1950, does provide both totals — $13,467.90 rent, and 1,123,815 instructional hours. Thus it is seen that the cost of rent during that period was $.0120 per student-hour. For the period in issue, however, the annual rental was $13,978.60, due to a known change— the increase in rent as of May 1, 1950. In fairness to the applicant, that figure should be substituted for the lower one in the computation. On the other hand, 1,123,815 hours will be retained as the divisor despite the anticipated increase in instructional hours in Badio Technology from 139,970 to 148,720, since an offset of this increase is to be expected from a corresponding decrease in instructional hours in the other courses. Division of $13,978.60, then, by 1,123,815 hours, provides a rental allowance for 1950 of $.0124 per student-hour.

In the trial plaintiff sought to prove that a different Calculation was correct. It does not now challenge the Board’s calculation, so it is hereby adopted. It is found that the rent rate of $.0221 per student-hour determined and allowed by the Board is fair and reasonable.

26. As the preceding findings indicate, it is found that plaintiff is entitled to a higher tuition rate to take account of the adjustment of the student-hour rate of the teaching personnel and the estimated annual instructional hours. It has been previously found that the estimated annual instructional hours should be 145,090 hours, rather than the 148,720 hours as determined by the Board. Therefore, it is deemed fair and reasonable to recompute the student-hour rate of the consumable supplies and taxes and insurance, even though these items were not challenged by the plaintiff, since the student-hour rate of these two items was determined by the Board by using 148,720 hours as a divisor rather than 145,090 hours. The following schedule shows, and it is found that $.521 per student-hour is the fair and reasonable rate of tuition for the Radio Technology course, rounding $.5209 to three places:

Per Student-Amount Hours Hour
Teaching Personnel.$45,392.48 for 145,090 $. 3129
Consumable Supplies_- 7,138,66 " 145,090 .0492
Operation and Maintenance. 12,388.11 " 1,205,152 .0103
Taxes and Insurance_- 501.95 " 145,090 .0039
Administrative Expenses__ 58,160.75 " 1,205,152 .0483
Depreciation___- 1,400.60 " 145,090 .0097
Rent. 13,978.60 " 1,123,815 .0124
Advertising._. 26,596.69 " 1,205,152 .0221
Total.... $.4688
Profit Allowance m oí total).0521
Rate ol Tuition..,. $.5209

II

Statute of Limitations

27. Plaintiff contends that it provided a total of 1,043,019.3 hours of instruction to veterans in its Radio Technology course during a period commencing January 1, 1950, and ending in or about June 1957, for which it has been paid at the rate of $.419 per hour. Defendant contends that plaintiff furnished 1,042,805.8 hours of instruction to veterans in the course during the above-mentioned period. The difference of 213.5 hours between the respective figures of the parties represents the total number of hours of instruction which defendant contends were vouchered and paid for by the Government, but were never furnished by plaintiff. Plaintiff contends that 751,018.3 of its claimed hours were furnished subsequent to May 15,1951. Defendant contends that 750,804.8 hours were furnished subsequent to May 15,1951, the difference between these two computations being the 213.5 hours, mentioned above, which were furnished subsequent to May 15,1951. Defendant contends that 291,001.0 hours, the number of instructional hours furnished prior to May 15, 1951 (1,042,805.8 — 750,804.8), are not subject to any higher rate which the court might find applicable because the instruction was provided more than six years prior to May 15,1957, the date of the filing of the petition in this court.

As can be seen from the foregoing, the only item in dispute is whether 213.5 of the total instructional hours claimed by plaintiff were actually furnished by it. However, finding 60, infra, shows that only 119.0 hours of the 213.5 hours in question that the Government paid for were never furnished by plaintiff. Therefore, it is found that the number of instructional hours involved in this claim is 1,042,900.3 (1,043,019.3 — 119.0). Of this amount, 750,899.3 hours (751,018.3 — 119.0) were furnished subsequent to May 15, 1951, and 292,001.0 hours were furnished prior to May 15, 1951.

28. By letter dated September 6, 1950, the Veterans Administration advised plaintiff to the effect that proper claims submitted by it relating to the Badio Technology course would be processed at the “inteiim rate” of $.30 per hour. It was further stated in this letter that:

This agreement is for the purpose of paying an agreed amount pending negotiations of a final contract. It is understood and agreed that the payment of the rate contained herein shall be without prejudice to the right of the institution to receive such rate as may be established in the final contract.

29. After plaintiff and the Veterans Administration had failed to reach agreement on the rate to be paid for the Badio Technology course and plaintiff filed its appeal to the Board, the Veterans Administration, by letter dated November 13, 1950, advised plaintiff that pending conclusion of its appeal, vouchers properly presented on an interim basis of $.375 per hour would be honored. The letter stated that the vouchers should be submitted on the basis of the total number of hours of instruction furnished, without designation of the individual students or the number of hours of instruction provided specific students. Plaintiff was further advised that when the rate was finally determined, a final voucher should be submitted indicating the number of the contract and itemizing the total allowable tuition charges at the final rate, and any approved related fees, listing them alphabetically by individual veteran.

30. The arrangement for billing on the so-called “bulk basis” set forth in finding 29, supra, was continued by a letter directed to plaintiff by the Veterans Administration under date of January 30,1951. During the pendency of its appeal, plaintiff received payment from the Veterans Administration at the rate of $.375 per instructional hour, which was equivalent to 75 percent of the $.50 rate allowed for the Radio Technology course provided under Contract No. V3006V-292. ( See findings 2 and 3, sufra.)

31. Plaintiff billed the Veterans Administration at the interim rate on the bulk basis, without identification of students or the hours of instruction furnished to each student, until some time after July 17, 1952. By letter dated July 17, 1952, the Veterans Administration advised plaintiff as follows:

The following change in billing procedure with respect to all interim vouchers is effective immediately :
Where an institution is entitled to receive interim payments during the negotiation of a contract or during the pendency of an appeal pursuant to VA Regulation 10469.2 the institution will be required to submit billings by individual veterans.
Where interim payments have been made on the basis of bulk billings and the final voucher has not been submitted, the institution will be required to submit a billing itemizing tuition charges and related fees alphabetically by veteran for the period or periods of all previous interim payments. The institution will be given reasonable time (approximately two months) to prepare this itemized billing. During the period of preparation, interim payments may be made on the basis of bulk billings and the period of such interim payments will be included in the itemized billing required of the institution. At the expiration of the time allowed the institution to prepare the itemized billing or upon receipt of the itemized vouchers, whichever occurs earlier, no further interim payments will be made, except on the basis of billings by individual veterans.

32. (a) Under date of September 26, 1952, the Veterans Administration sent plaintiff a letter, with an attachment thereto entitled Schedule I — Letter of Authorization, which letter reads in part:

Pursuant to Veterans Administration Regulation 10469.2(A) (3), interim payments for tuition and other charges for the course set forth herein may be made to your institution pending the negotiation of a contract.
Provisions of interim rate letters dated November 13, 1950 and January 30, 1951 pertaining to the course set forth herein are superseded by this letter and all payments for said course shall be in accordance with the following authorization:
INSTRUCTION
(a) The institution will provide instruction and the necessary books, supplies and equipment therefor, as set forth herein, from January 1,1950, to such eligible veterans who may be accepted or retained by the institution under the provisions of Public Law 346, 78th Congress, as amended.
(b) The institution will provide such courses of instruction at charges listed and described in Schedule I attached hereto and made part of this authorization.
H« ❖ ❖
PAYMENT
(a) The institution will prepare and certify vouchers for tuition fees and other services as set forth in paragraph (b) of Instruction, in the manner and form prescribed by the Veterans Administration. These vouchers will be presented by the institution and will be paid by the Veterans Administration at such intervals and covering such periods as indicated herein:
Effective for the period January 1,1950 to December 31, 1950:
At the end of each calendar month on the basis of the actual number of hours of instruction attended by a veteran, provided that reasonable absences not in excess of the standards described in Schedule I will be permitted. Permissible absences may be billed on each voucher as submitted.
Each voucher submitted will set forth on account of each veteran (a) the total number of regularly scheduled hours of instruction furnished, (b) the total number of excused absences, showing the actual dates of absences, and (c) the total number of hours of make-up instruction given, showing the dates the absences occurred and the dates that make-up instruction was given. Any hour for which payment is made under any one of these headings may not later be reported and paid for under another heading.
Payment for the entire course, including reasonable absences and make-up instruction, may not exceed the amount payable for the course if taken as regularly scheduled.
Effective for the period January 1, 1951 to April 30, 1951:
At the end of each calendar month on the basis of the actual number of hours of instruction attended by a veteran, provided that reasonable absences accrued to the date of billing, not in excess of the standards described in Schedule I will be permitted. Payments for reasonable absences are limited to 5% for day courses and 1 session per month for evening courses, of the elapsed instructional time at the point of billing.
Each voucher submitted will set forth on account of each veteran, (a) the total number of regularly scheduled hours of instruction furnished, (b) the total number of hours of absences, showing the actual dates of absences, and (c) the total number of hours of make-up instruction given, showing the dates and the number of hours of absences, and the dates and number of hours of makeup instruction given. Any hour for which payment is made under any one of these headings may not later be reported and paid for under another heading.
Payment for the entire course, including reasonable absences and make-up instruction, may not exceed the amount payable for the course if taken as regularly scheduled.
Effective from May 1,1951:
At the end of each calendar month on the basis of the actual number of hours of scheduled instruction attended by a veteran, including payment for reasonable absences not in excess of the number described in Schedule I.
Each voucher submitted will set forth on account of each veteran, (a) the total number of regularly scheduled hours of instruction actually furnished and the approved session in which it was furnished, (b) the number of hours of excused absences for which claim is made for payment, showing the actual dates of such absences, (c) the total numbers of hours of absences, other than those for which claim is made for payment, showing the actual dates of absences, and (d) the total number of sessions for which the veteran-trainee was tardy, showing the actual dates on which the lateness occurred. Any hour for which payment is made under any one of these headings may not later be reported and paid for under the same or another heading. Vouchers will not include any claim for absences from regularly scheduled instructional time in excess of the limitations prescribed in Schedule I.
Payment for the entire course, including payable absences, may not exceed the amount payable for the course if taken as regularly scheduled.
PROBATION OF CHARGES
In the event any veteran in training withdraws or is separated from the institution prior to the completion of the term or his course, the charges made for tuition and other fees will be prorated as follows:
On the basis of the actual number of hours of instruction furnished to and received by the veteran student with the understanding that reasonable absences, incurred prior to the day the veteran student was last physically in class will be allowed, but not in excess of the provisions set forth in Schedule I, attached hereto. A veteran will be considered withdrawn from his course of training as of the day he was last physically in class and no payment will be made for any subsequent period.

(b) Schedule I — Letter of Authorization, mentioned in the letter partially quoted in (a) above, continued interim payment to plaintiff at the rate of $.375 per hour. It provided that the school should operate continuously, except on scheduled holidays (legal) designated as New Year’s Day, Memorial Day, Independence Day, Labor Day, Thanksgiving, and Christmas. The schedule contains detailed instructions concerning billing procedures to be followed by plaintiff, including procedures covering the preparation of vouchers applicable to attendance, absences, and make-up instruction. The latter procedures are set forth under an “Absence Payment Provision”, which is specifically applicable to each of three designated periods. Inasmuch as the provisions of the absence payment clause controlling as to each period varies and shows the adjustments which plaintiff was required to make in previous billings made to defendant, pertinent portions of these provisions are quoted below:

Effective for period January 1, 1950 to December 31, 1950;
Payment made for a veteran enrolled, is for a course of instruction, and no deduction on account of reasonable absences shall be made from the tuition chargeable. Absences excused by the appropriate school authority not to exceed 5 % of the total number of hours of instruction as set forth herein are considered reasonable and shall be permitted without deduction in the total tuition charge.
The Contractor may furnish make-up instruction for excused absences in excess of the amount set forth above as “reasonable absences”.
When provided, make-up instruction must be given under the direct supervision of qualified instructors at the rate of one hour of make-up for each hour of absence.
Make-up instruction will be charged at the hourly rate of instruction established herein provided that the Contractor will not be compensated for make-up instruction in cases where students have not exceeded the 5% reasonable absences set forth above; except that for the period from January 1, 1950 to February 28, 1950, inclusive, the Contractor may voucher as actual attendance for any absence made up by a veteran student within thirty (30) days following his absence.
Make-up instruction must be given within 30 days of the date of the absence.
When a veteran student is absent in excess of 5% of the total number of hours of instruction for the course and is considered by the school to be in an unsatisfactory status, he should be withdrawn from his course of training, and the Veterans Administration notified. If withdrawn, no veteran will be re-entered into training without written approval of the Veterans Administration.
# * * * #
Effective for period January 1,1951 to April 30,1951:
Payment made for a veteran enrolled, is for a course of instruction and no deduction on account of reasonable absences shall be made from the tuition chargeable. Absences excused by the appropriate school authority not to exceed 5% of the total number of hours of instruction per month, as set forth herein, for day courses and 1 session per month for evening courses, are considered reasonable. Reasonable absence credit will accrue monthly and may accumulate throughout a course.
Reasonable absence credit shall be applied to excused absences, in order of their occurrence and is permanently expended as it is used.
Only actual hours of attendance will be paid for after reasonable absence allowance provided above has been expended.
The Contractor may furnish and be paid for make-up instruction for excused absences in excess of the amount set forth above as “reasonable absences.” Such make-up instruction will normally be accomplished within the course period. Absences cannot be anticipated for vouchering purposes and make-up time may be vouchered for if otherwise in order, only after the occurrence of an absence.
When provided, all make-up instruction must be given under the direct supervision of qualified instructors at the rate of one hour of make-up for each hour of absence.
Make-up instruction, when chargeable, will be charged at the hourly rate of instruction established herein.
Make-up instruction, when given, will be supplied within forty (40) calendar days of the date of the absence, except that such instruction when given subsequent to the Veterans Administration established ending date of a course, will be given within fourteen (14) calendar days from that date. 'Such make-up instruction will be allowed only for absences occurring during the authorized training period for the course. Each case requiring make-up for a veteran student beyond the Veterans Administration established ending date of a course, will require a new certification from the institution.
^ Hi sfc ❖
Attendance: A veteran student will be considered to be in attendance only when he is attending and receiving instruction individually or in the class for which he is enrolled and/or assigned. Failure to be in attendance in such prescribed session is, and will be recorded, as an absence. The only approved session except special make-up sessions are those contained in this contract. No split sessions are authorized unless specifically approved by the appropriate state approving authority.
As provided in Section 7, Public Law 610, 81st Congress, in any case where an overpayment results from failure of school authorities to report promptly to the Veterans Administration unauthorized or excessive absences from a course in which a veteran has been enrolled, or discontinuance or interruption of a course by a veteran student, the amount of such overpayment may constitute a liability of the school for such failure to report.
Hi 5$ Hi . ❖ Hi
Effective from May 1, 1951:
a. For the purposes of this provision “absence” shall be defined as failure to attend the institution during regularly scheduled hours of required attendance. No deduction shall be made from the tuition payable under this contract by reason of reasonable absences, provided that the total absences for the complete course(s), inclusive of emergency absence as defined herein, do not exceed the maximum absences for the complete course (s) as set forth in Table of Courses, and that the number of absences in any one month, (or 4-week billing period) exclusive of emergency absence, does not exceed the maximum absences per month (or 4-week billing period) set forth in Table of Courses attached. It is understood and agreed that the contractor will not make claim for tuition for days or hours of absence in excess of the maximum absence provided in Table of Courses.
b. The provisions in Table of Courses for payment of tuition for absences nothwithstanding, it is understood and agreed that in the event any veteran trainee discontinues the course prior to completing the number of hours specified for the complete course m this contract, the number of absences, including emergency absence, for which the Veterans Administration will pay tuition will not exceed the pro-rata portion of the total absences provided for the complete course which the length of the inclusive period in attendance days between the date of entrance and the date of interruption bears to the total length of the course in attendance days. The last day of the veteran’s attendance shall be considered the date of interruption.
c. It is further agreed that the number of monthly absences or clock-hour equivalent (exclusive of emergency absences) provided under the heading “Maximum Allowable Absences per Month or 4-Week Billing Period” shall be non-cumulative beyond each monthly or 4-week billing period and may not be carried forward and applied to absences claimed in any subsequent month or 4-week billing period.
d. For the purposes of this provision “Emergency absence” shall be defined as absence not due to fault of the veteran, necessitated by emergencies such as (a) death in the immediate family, illness of the trainee or his immediate family as evidenced by a written statement filed with the institution signed by the trainee or a physician or (b) certain legal requirements such as jury duty and time spent in court where the trainee is detained by legal authority. Emergency absence for which the Veterans Administration will pay tuition without deduction for a trainee shall not exceed 10 days of absence during a twelve (12) month period of required attendance. Emergency absence for which the Veterans Administration will make payment without deduction will be in addition to the number of monthly (or 4-week billing period) absences provided in Table of Courses, but the total absences for the course inclusive of emergency absences and absence per month or 4-week billing period shall not exceed the number of absences provided under tbe beading “Total Course” absences in Table of Courses.
e. It is agreed that a veteran who is late three times during any one calendar month or 4-week billing period will be charged with one day of absence, or the equivalent of one day’s absence expressed in clock hours. It is agreed that a tardy student is one who is late for a regularly scheduled class, usually not more than 15 minutes, provided, however, that for the purposes of this provision absence of less than one (1) hour at the begimiing of a class period shall be considered as “late.” All absences from class periods in excess of one (1) hour shall be recorded as hours of absence.
f. It is agreed that the institution will notify the Veterans Administration promptly regarding the interruption of training of any veteran.

(c) Although, as noted in finding 31, supra, plaintiff was advised by letter dated July 17, 1952, that as of that date it would be required to submit billings by individual veterans, there is nothing in the record that shows the above-detailed billing procedures as to individual students, applicable commencing January 1, 1950, were furnished to plaintiff prior to September 26, 1952. The first vouchers submitted by plaintiff to the Veterans Administration on the individual student basis were dated November 17, 1952, and December 4, 1952.

(d) Plaintiff did not bill the Veterans Administration at the rate of $.419 per student-hour of instruction it provided after January 1, 1950, until after the Board rendered its decision on January 16, 1953, setting that rate. However, it should be made clear that prior to said decision, plaintiff billed the Veterans Administration for instruction provided after January 1, 1950, at the interim rates lower than $.419 per hour. Subsequent to the Board’s said decision, plaintiff obtained payment of the differential between the rate at which it had been paid and $.419 for all instructional hours furnished from January 1, 1950.

33. (a) Plaintiff contends that under Veterans Administration regulations, students were allowed to incur a certain number of absences for which plaintiff could be paid, but that absences in excess of the allowable number were not compensable to plaintiff; that after July 17, 1952, plaintiff was entitled to bill the Veterans Administration each month for the hours of instruction provided each veteran student; that the foregoing fact situation required that when plaintiff submitted a final billing to the Veterans Administration for an individual student, an adjustment be made for any absences which, in the aggregate, exceeded the total number of allowable absences; and that adjustments for absences were not, and could not be, included in its billings to the Veterans Administration until after July 17,1952, when the latter authorized and directed plaintiff to submit detailed vouchers on the basis of itemized billings by individual veterans; that until plaintiff was authorized by the Veterans Administration’s letter of July 17,1952, to bill for individual students, plaintiff only received payments on what was, in effect, a running account which could not be settled until such authorization of July 17, 1952 was received.

Defendant disputes the foregoing and asserts that plaintiff could have made adjustments for non-allowable absences from the time it received the Veterans Administration’s letter of November IS, 1950 (mentioned in finding 29, supra), since that letter authorized plaintiff to submit vouchers “on the basis of total hours or other units” of instruction which was provided to veterans. Defendant argues that under the instructions contained in the above-mentioned letter, additional billings for any absences were unauthorized and that correct vouchering by plaintiff would have provided no payment for absences.

(b) Considering the whole record, particularly the letters sent to plaintiff by the Veterans Administration under date of July 17,1952 (finding 31, supra), and September 26,1952 (finding 32, supra), it may be reasonably inferred that there was a mutual understanding between plaintiff and the Veterans Administration throughout negotiations for a contract that plaintiff would be paid for a reasonable number of veteran-student absences, not exceeding standards eventually to be established by the Veterans Administration.

(c) The record shows that plaintiff did not, and could not, properly make adjustments for absences in billings submitted to the Veterans Administration until after the latter’s letter of September 26, 1952, which established the standard of reasonable and permissible absences and set forth detailed procedures for the preparation of itemized billings by individual veteran-students.

(d) The evidence shows that in some instances, plaintiff did not submit billings for instruction provided veteran-students during the period prior to May 15,1951, until after the Board approved the rate of $.419 on January 15, 1953. In some instances, plaintiff could not submit a billing for a particular student until some sis to nine months after he had commenced the course because it took this long for the Veterans Administration to process the student’s claim for approved training. Therefore, it is clear that some of the billings submitted by plaintiff did not include charges for all of the instruction provided students during the period covered by a particular billing; that certain adjustments in some of these billings were in order; and that any required adjustments for a particular pay period could not be made until the submission of supplemental billings at a later date.

Ill

Defendant’s Counterclaims

34. Defendant’s first and second counterclaims are predicated on the False Claims Act, 12 Stat. 696, 31 U.S.C. § 231.

A. FIRST COUNTERCLAIM

35. Defendants’ first counterclaim alleges violations by Frank Simon, Benjamin Eizenman, and Eastern School, of the False Claims Act (see finding 34, sufra, and footnote 7), with respect to vouchers submitted 'by plaintiff to defendant covering billings by Eastern School for instruction furnished to veterans studying Badio Technology in Eastern School under Public Law (P.L.) 346. (See finding 12(a), supra.) Defendant alleges that Eastern School failed to report certain absences of eight veterans which information was contained in five separate vouchers. Defendant further alleges that Eastern School was overpaid for 213.5 hours of claimed instruction, or an overpayment totaling $89.33, due to plaintiff’s failure to report absences of eight veterans listed on the five vouchers. Defendant contends that as a consequence of the foregoing, Frank Simon, Benjamin Eizenman, and Eastern School are liable, jointly and severally, for $178.66 (double the amount of $89.33, the actual damage suffered by defendant) and for $10,000, which consists of five forfeitures of $2,000 each ($2,000 for each of the five vouchers in which Eastern School failed to report the absences of eight veterans). The recovery is based on the damages set forth in the False Claims Act. I bid.

36. The students involved in the first counterclaim were enrolled in Eastern School pursuant to P.L. 346, supra, and are commonly referred to as “Public Law 346 students.” The aforesaid P.L. covered mainly World War II veterans and generally, thereunder, the Veterans Administration entered into contracts with approved schools, such as plaintiff school, whereby the Veterans Administration agreed to pay a particular school a stipulated amount per hour of instruction rendered (referred to in previous findings as the “student-hour rate”). In order to obtain such payments, the school was supposed to compute the number of hours each eligible veteran attended classes, multiply that figure by the tuition rate stipulated in the contract, include the product of this computation in a voucher and present the voucher to the Veterans Administration for payment. If the school reported the student as having been in attendance for more hours than he actually was present, such an overstatement resulted in an improper increase in the payment the school would receive from the Veterans Administration.

37. (a) During all times material here, including the period between June 1954 to and including July 1957, which is specifically material to both defendant’s first and second counterclaims, Frank Simon and Benjamin Eizenman were two of the partners in the Eastern School and they were active in the management of said institution. Mr. Simon was the Director of the school and Mr. Eizenman was its Eegistrar.

'(b) Neither Frank Simon nor Benjamin Eizenman were in the military or naval forces of the United States, or in the militia called into or actually employed in the service of the United States during the times material to this action.

38. During the period commencing in or about July 1947, and continuing to in or about June 1957, plaintiff enrolled veterans of the United States Armed Forces under P.L. 346, supra, in accordance with contracts as extended from time to time by formal amendments and interim rate letters.

39. In the years 1954 and 1955, plaintiff billed the Veterans Administration, and received payment, for instruction rendered veterans enrolled under P.L. 346, pursuant to an interim rate letter from the Veterans Administration to plaintiff dated February 20, 1953, as supplemented and amended by letters from the Veterans Administration to plaintiff dated April 80, 1953, March 17,1954, February 24, 1955, and June 13, 1955.

40. The interim rate letter of February 20, 1953 (finding 39, supra), which pertains to the Radio Technology course, provided that plaintiff was to prepare and certify vouchers for tuition fees at the rates prescribed therein and to present the same for payment at the end of each calendar month. The amounts to which the school would be entitled would be based' upon the actual number of hours of scheduled instruction attended by each veteran enrolled under P.L. 346, including payment for reasonable absences not in excess of the number set forth in Schedule I attached to said letter.

41. In a voucher dated August 17, 1955, numbered 1129, submitted on behalf of plaintiff to the Veterans Administration for payment, it was reported that Anthony P. Papevies, a student enrolled in the Radio Technology course from July 26,1954 to December 1, 1955, had been absent only two days in July 1955. Defendant contends that Papevies was absent from classes two weeks, or eight school days. Papevies, who was scheduled to attend classes four evenings per week, testified that he was absent from his classes for a period of two weeks during July 1955, while he was on vacation in West Wyoming, Pennsylvania, where he formerly resided. Some time prior to going away, Papevies went to the school office and talked with either Mr. Eizenman or Mr. Simon, who told this student that it would be all right for him to be absent from classes for the purpose of going on a vacation. Although the record indicates that prior to the trial this student furnished information to defendant that he was away a total of five days in July 1955; that he was unable to recall certain facts, e.g., the names of his instructors, the number of days per week he was supposed to attend classes, the length of the course in which he was enrolled, and the method used in taking attendance; and that his testimony does not not conclusively show which two weeks in July he was absent, Papevies’ testimony is accepted as credible evidence that he was in fact absent from classes for an overall period of two weeks sometime in July 1955. The Radio Technology course in which Papevies was enrolled did not meet on July 4,1955; therefore, in the absence of proof by defendant that the two-week period that Papevies was absent did not include the July 4 holiday, it is found this student missed seven days in July 1955.

42. In a voucher dated September 13,1955, numbered 7015, submitted on behalf of plaintiff to the Veterans Administration for payment, it was reported that a veteran-student named Greorge Ford, a student in the Radio Technology course, had been absent one day in August 1955. Defendant contends that F ord was absent from school two weeks, or eight days in August 1955. Ford, who was scheduled to attend classes four evenings a week, testified that he took a two-week vacation in either August 1954, or August 1955. Ford’s testimony was uncertain, inconclusive, and conflicting as to the year in which he actually took this particular vacation. He did testify, without contradiction, that he took the two-week vacation between the time he completed the FM and Television Technician course, and the time he started the Radio Technology course. In view of the fact that plaintiff’s records established that Ford finished the FM and Television Technician course on June 1, 1954, and entered the Radio Technology course on June 16, 1954, there is serious doubt as to whether the two-week vacation even occurred in the month of August of either year 1954 or 1955. On the basis of Ford’s testimony, it cannot be found that Ford was absent more than one school day in August 1955.

43. In a voucher dated October 28, 1954, numbered 21673, submitted on behalf of plaintiff to the Veterans Administration for payment, it was reported that Maurice E. DeCuir, a veteran-student in the Radio Technology course, had not been absent in August 1954. Defendant contends that this student was absent from school “at least” two weeks, or eight school days, during said month. DeCuir testified that sometime in the month of August 1954 he took a vacation of “at least” two-weeks duration during which time he and his wife traveled to California; that he was absent from classes throughout this two-week or more period; and that about a week before leaving for California he was told by “someone” in the office at the school that it would be all right for him to “take the vacation”.

Inconsistent with the foregoing, DeCuir’s attendance record card for the month of August 1954 bears his signature at two places opposite each school day in the month, one signature indicating that he signed in, and the other signature indicating that he signed out. At one point DeCuir stated that he signed under the “in” column when he reported for class and again signed under the “out” column before he left. Later on, in response to questions as to whether he signed attendance cards of this nature once a day, or twice a day, or “sometimes sign several at a time”, DeCuir stated “I only signed once”. On the basis of the whole record, including defendant’s offer of proof (see footnote 9, supra), it is concluded and found that DeCuir was absent from class twelve days during the month of August 1954.

44. In a voucher dated August 17, 1955, numbered 1129, submitted on behalf of plaintiff to the Veterans Administration for payment, it was represented that J ake Gross, a student in the Eadio Technology course, had been absent only two days in July 1955. The above voucher shows a credit in favor of defendant for 29.25 hours of excess absences for which payment had been received in the name of Jake Gross. Defendant contends that Gross was absent from school at least eight days in July 1955. Gross, who was scheduled to attend classes four evenings per week, testified that he was absent at least eight days in both the months of June and July, 1955. Gross’ testimony as to his absences in June 1955, corresponded with plaintiff’s records for that month, and there is no evidence in the record to rebut the testimony presented by this witness; however, Gross was unable to associate his absences during either the month of June or July, 1955 with a specific event, such as a vacation or period of illness. Furthermore, the record shows that Gross was unable to state exactly what days he was absent in May, June, or July, 1955, the date he terminated at the school, or the number of days he was scheduled to attend school. Plaintiff interrupted Gross on August 2, 1955, about six months before the expiration of his entitlement, from which an inference might be made that he was considered an unsatisfactory student because of excessive absences and that he was actually absent during July more than the two days reported by plaintiff; but it cannot be found, solely on the basis of Gross’ uncorroborated and non-specific testimony, that defendant has proved that Gross was absent eight days in July 1955.

45. In a voucher dated August 17, 1955, numbered 4473, submitted on behalf of plaintiff to the Veterans Administration for payment, it was represented that Louis Fishman, a student in the Eadio Technology course, had been absent two days in July 1955. Defendant contends that Fishman was absent from classes over a period of three weeks, or twelve school days, during that month, or 11 days giving plaintiff the benefit of the July 4 holiday. Fishman, who was scheduled to attend classes four evenings per week, testified that he was on vacation from his job for three weeks sometime in July 1955; that he rented a bungalow at the Sheykowitz Bungalow Colony, South Fallsberg, New York, and remained there with his family throughout this entire three-week vacation period; that he did not attend any classes at Eastern School during those three weeks; and that prior to going on this vacation, he notified both his instructor and Mr. Eizenman that he was planning on being away for three weeks. While it is true that Fishman was unable to recall with exact certainty the date in 1954 that he started at Eastern School, or the exact three weeks in July 1955 that he was on vacation, and that no documentary evidence was offered in evidence showing the exact dates Fishman rented the bungalow in which he stayed while on vacation, it is found, on the basis of Fishman’s credible testimony, that he was absent from Eastern School three weeks in July 1955. Since defendant has not proven that July 4, 1955, a school holiday, did not fall in one of the three weeks during which Fishman was on vacation, it is found that Fishman was absent from Eastern School eleven school days in July 1955.

46. In two vouchers dated August 17,1955 and September IS, 1955, numbered 4473 and 7015, respectively, submitted on behalf of plaintiff to the Veterans Administration for payment, it was represented that Rudolph Stone, a student in the Radio Technology course, had been absent only two days in July 1955, and only two days in August 1955. Stone was scheduled to attend classes four evenings a week. Defendant contends that this veteran-student was absent from school one week, or four days, in both July and August 1955. Stone testified that he was on vacation at Sackett Lake during the last week in July 1955 and the first week in August 1955, and that he did not attend Eastern School during this period of time. Prior to going on vacation, Stone told some unidentified representative of the school that he was going away and this person said “we will take care of it in the office.” Plaintiff specifically attacks the credibility of this witness for a number of reasons, including the fact he could not recall, without prompting, when he first studied at Eastern School, when he finished, the name of his teacher, the number of nights he was scheduled to attend classes, or the total number of hours required for the course. Considering the long period of time that had elapsed between the period Stone attended Eastern School and the time he testified, it is not considered unusual that he could not remember some of the things mentioned by plaintiff. This witness was certain that he was away on vacation during the above-mentioned times and was able to unequivocally connect such absence with a specific vacation location. On the basis of Stone’s credible and acceptable testimony, it is found that he was absent from Eastern School the last four school days in July 1955, and the first four school days in August 1955.

47. In a voucher dated November 10,1955, numbered 3278, submitted on behalf of plaintiff to the Veterans Administration for payment, it was represented that George Hasten, a student in the Radio Technology course, had been absent thirteen days during the period July through September 1955. Hasten was scheduled to attend classes four days a week. Defendant contends that Hasten was absent from school “approximately” 24 days during the period in question. Hasten testified that from June 1955 through October 1955, he attended classes sporadically, i.e., that he might take one day off, and attend classes the next day, or attend classes completely for one week and then miss some classes the next week, and that his average attendance was about 2 days a week. However, Kasten’s testimony was of such a conflicting, non-specific, vague and inconclusive nature that it must be rej ected. The evidence of record will not support a finding that Hasten was absent more days than reported by plaintiff.

48. In a voucher dated October 28,1954, numbered 21673, submitted on behalf of plaintiff to the Veterans Administration for payment, it was represented that Joseph Steinberg, a student in the Radio Technology course, had been absent only two days in July 1954. In another voucher, dated August 17, 1955, numbered 4473, submitted to the Veterans Administration for payment it was represented that Stein-berg had not been absent at all in July 1955. Steinberg was to attend classes four nights a week during the months covered by the two above-mentioned vouchers. Defendant contends that in fact Steinberg was absent from his classes two weeks, or eight school days, in July 1954, and two weeks, or eight school days, in July 1955. Steinberg presented credible testimony that he was absent from school for a period of two weeks sometime in the month of July in each of the years 1954 and 1955, during which periods of time he was on vacation with his family at Bradley Beach, New Jersey, located about 60 miles from New York City. Prior to going on vacation in July 1954, Steinberg talked about his plans for a vacation with Mr. Simon who said “Go ahead. Don’t worry about it”. Before going on vacation in July 1955, Steinberg again contacted Mr. Simon about his vacation plans who indicated he was too busy to talk about the matter and suggested it 'be taken up with Mr. Eizenman. Thereafter, Steinberg talked with Eizenman who stated “Well, go ahead, don’t worry about it.” In addition to attacking the credibility of Stein-berg’s testimony on the grounds he was unable to pinpoint the exact dates he was on vacation, or to recall other times he was absent from school, or to remember dates generally, plaintiff suggests a number of reasons in support of its argument that the evidence does not establish that Steinberg was absent as claimed.

After considering all of plaintiff’s aforementioned reasons, they are rejected as being speculative in nature; and it is concluded and found, on the basis of Steinberg’s testimony and all of the evidence of record, that he did not attend school for a period of two weeks in both July 1954 and July 1955. Although July 4, 1954, a designated holiday, fell on Sunday, it is reasonable to assume that no classes were held on Monday, July 5, 1954. Since the evidence does not show which two-week period in J uly of 1954 Steinberg was away on vacation, plaintiff is entitled to the benefit of the doubt that this student was required to attend classes only three days during the week of July 4; therefore, it is found that Steinberg was absent from classes seven days during a two-week period in July 1954. The 4th of July 1955 fell on a Monday, and consistent with the foregoing rationale, it is found that Steinberg was absent from classes seven days during a two-week period in July 1955.

49. The vouchers submitted to the Veterans Administration for payment were prepared in plaintiff’s office and sent by clerks who worked under the supervision, direction, and control of Frank Simon and Benjamin Eizenman. Prior to October or November 1954, these clerks transcribed the attendance and absence of the individual veteran-students from an attendance record card. Thereafter, the transcriptions were made from an attendance register or roll book, to the school ledger, and from the school ledger to a voucher.

The teachers were required to take attendance in the class and they were the only ones who were supposed to post entries in the roll book. However, this procedure was not always followed. (See finding 81, infra.) There is no evidence that any of the vouchers reflected information different from that recorded on the applicable attendance card or register; but the attendance record or register did not, in all instances, accurately reflect a student’s absence.

50. (a) The vouchers concerning Anthony P. Papevies, Maurice E. DeCuir, Louis Fishman, Budolph Stone, and Joseph Steinberg (mentioned in findings 41, 43, 45, 46 and 48, supra, respectively), bear the certification that “The above bill is correct -and just”, and each voucher was signed by Frank Simon.

(b) There is evidence in the record that Frank Simon and Benjamin Eizenman had actual knowledge that four of the five veterans identified in (a) above, were absent from school more times than indicated on the vouchers mentioned.

(c) However, defendant has not proved by clear and convincing evidence that said vouchers constituted false and fraudulent claims under the False Claims Act. The evidence showing that Simon and Eizenman knew of the absences does not prove that they wilfully decided to mark the students present. Equally consistent with a fraud explanation of the evidence is that plaintiff’s attendance system may have been deficient, or its record-keeping practices were possibly inaccurate or sloppy.

51. The allowable absences for which the Veterans Administration would make payment with regard to the veterans involved in defendant’s first counterclaim, all of whom were scheduled to attend four evenings per week, 3% hours per session (including *4 hour non-reimbursable rest period), or 15 hours per week, equaled 2.4 days, or 9 hours, per month.

52. The number of hours paid for by the government which were never furnished by plaintiff are computed as follows:

iThis total was determined after deducting allowable absences at 9 hours per month. The rate of converting days into hours was 3% hours per day, which rate was proposed by defendant.
2 As noted in finding 41, supra» it was found that Papevies was absent 7 days rather than the eight days claimed by defendant.
8 Although defendant contended that DeCuir was absent only “at least 8 days”, the evidence clearly shows he was absent at least 12 days (see finding 43, supra) ; therefore the latter absence figure was used as a factor in this computation.
* As noted in finding 45, supra> it was found that Fishman was absent 11 days rather than 12 days which defendant used in its computation.
B As a result of defendant’s failure to deduct two months of allowable absences for Stone, it used a figure of 19 excessive absences as a factor in computing damages whereas the correct figure is 10.
0 As noted in finding 48, supra» it was found that Steinberg was absent seven days in both July 1954 and 195-5, rather than eight days in each of said years as claimed by defendant, which used a 16-day absence figure in computing its damages.

53.On the basis of the whole record, it is concluded that vouchers submitted by plaintiff to the VA overstated attendance of P.L. 846 students by 119.0 hours, but that defendant has not proved by clear and convincing evidence that plaintiff, its partners or its agents knowingly overstated attendance in violation of the False Claims Act.

B. SECOND COUNTERCLAIM

54.Defendant’s second counterclaim alleges violation by Frank Simon, Benjamin Eizenman, and Eastern School of the False Claims Act, with respect to monthly certificates of training submitted by plaintiff school to the Veterans Administration pursuant to Public Law 550, 66 Stat. 663 (1952). Defendant alleges that Eastern School failed to report absences involving nine veterans on twelve monthly certificates of training. As a consequence of this, defendant contends that Frank Simon, Benjamin Eizenman, and Eastern School are jointly and severally liable for $24,000, which consists of twelve forfeitures of $2,000 each ($2,000 for each of the twelve monthly certificates of training in which Eastern School failed to report the absences of nine veterans enrolled in its school). The recovery is based on the forfeiture clause contained in the False Claims Act. Ibid. Defendant has not requested damages based on double the amount of actual damages as requested in its first counterclaim. The students involved in the second counterclaim were all enrolled in Eastern School pursuant to Public Law 550, which covered mainly Korean War Veterans. The students are commonly referred to as “Public Law 550 students”.

55. A veteran who wished to study at plaintiff school under Public Law 550 would apply to the school and join with it in submitting the necessary application to the Veterans Administration. If the veteran was approved for training 'by the Veterans Administration, it issued a Notice of Training Status form showing the name of the institution, the period of the veteran’s entitlement to training, and the amount of his monthly education and training allowance. Public Law 550 provides that no payment of education and training allowance may be made until the Veterans Administration receives a certification as to actual attendance from the veteran, and a certification or an actual endorsement from the school that the veteran was enrolled in, and pursuing a course of, education or training during such period. Each month a monthly certificate of training, form VB-7-1996b, executed 'by the veteran and the plaintiff school, would be submitted by the plaintiff to the Veterans Administration for each veteran pursuing a course of study under Public Law 550. This monthly certificate of training, which was a prerequisite to the disbursement to the veteran of the education and training allowance each month, set forth the days the veteran was actually in attendance for instruction and training, the days of the veteran’s absence and the days which were holidays.

56. The veterans enrolled in Eastern School under Public Law 550 were entitled to accrued leaves of absence at the rate of 2% days per month not to exceed 30 days per year. Eor each absence in excess of 30 days within a twelve-month period, or pro-rata part thereof for enrollments of less than twelve months, y2B of said veteran’s monthly education and training allowance was deducted 'by the Veterans Administration. Leaves of absences, in addition to the ordinary leave described above, may be taken under exceptional circumstances which include personal illness and personal hardship. Without regard to ordinary leave, these leaves may 'be granted not to exceed a total of 30 days in each of twelve months of training status beginning with the date of the veteran’s entrance into training. Personal hardship includes illness or death in the veteran’s immediate f aanily.

57. At the time the Veterans Administration determined the amount, if any, to be deducted for excess absences from a Public Law 550 veteran’s monthly education and training allowance, the sole information as to a veteran’s attendance was the report of absences reflected on the monthly certificate of training, form VB-7-199f>b, submitted by plaintiff. Such forms were relied upon by the Veterans Administration for that purpose.

58. (a) At the time the monthly certificates of training, form VB-7-1996'b, were distributed by plaintiff to the veterans for their signatures, no entries appeared in the section thereof designated as item 5 “Dates of Absence”. Such entries were placed in said section by plaintiff’s agents or employees after the veterans had signed and returned the forms; thereafter, the completed forms were transmitted to tbe Veterans Administration without examination by the veterans.

(b) Initially, after the Public Law 550 program began at the school, the school gave the monthly certificate of training to the veterans but the plaintiff found the veterans were not marking item 5 “Dates of Absence” properly. Subsequently, it found that the only practical manner in which to process the monthly certificate of training in order to have this document in the hands of the Veterans Administration by the 10th of the month, thereby enabling the veteran to receive his training allowance by the 20th of the month following the end of the month in which training was taken, was to follow the above-described procedure.

(c) The instructions on the back of the monthly certificate of training states that the veteran is to mark item 5 “Dates of Absence”. One of the plaintiff’s officials discussed with officials of the Veterans Administration the procedure described above whereby the veterans would sign their names on the blank monthly certificate of training and the plaintiff school would afterwards fill in item 5 “Dates of Absence”, but the record does not show that the Veterans Administration specifically approved this practice.

59. Plaintiff charged the Public Law 550 students tuition based upon the number of hours of instruction provided by plaintiff, and the tuition was not reduced by reason of the absence of the student. In August 1956, plaintiff discontinued its Saturday classes, except for a couple of classes that were finishing up, because Mr. Simon was concerned about the poor attendance on that day. Such action resulted in a 25 percent loss in the amount of the tuition plaintiff could charge full-time students, as well as a similar reduction to the veterans involved in their training allowance, and in the salary received by each teacher affected.

60. Plaintiff had 1,004 veterans training at its school under Public Law 550, during the period from 1953 through August 1957, when it ceased active operation. During that period, it had sent in about 13,000 monthly certifications of training on Public Law 550 students. Over the ten years it gave training, plaintiff had about 9,000 veterans who took training in its institution. In the radio and electronics part of the school’s operation, plaintiff bad 17 instructors in 1957, 16 instructors in 1956, and 15 instructors in 1955, and in this period of time bad from 4 to 7 people working in its office.

61. Plaintiff caused to be prepared and presented to the Veterans Administration a certain monthly certificate of training form VB7-1996b, in which it was represented that Gabino Ocasio-Santiago had been absent six days in July 1956. Santiago was enrolled as a full-time student scheduled to attend classes six days a week, Monday through Friday evenings and on Saturday during the month in question. Defendant contends that this student was absent from school “about” three weeks, or 18 days, in July 1956. Santiago testified that he visited Puerto Pico during the first three weeks in July 1956, and did not attend his classes at Eastern School throughout this period of time. Santiago’s testimony is accepted as credible evidence that he was absent from his classes 17 school days in July 1956. The figure of 17 days takes into account the July 4th holiday, since classes at Eastern School did not meet on that date.

62. Plaintiff caused to be prepared and presented to the Veterans Administration a certain monthly certificate of training form VB7-1996b, in which it was represented that Luis Cruz-Velez had been absent two days in March 1956. Defendant contends that this veteran was absent “about” 2 or 3 days per week, or 12 days in said month. Velez was scheduled to attend classes 6 days a week during that time. He testified that he attended classes about two or three days a week in March 1956. Velez’ testimony was of such a vague, conflicting, and inconsistent nature that it cannot be considered reliable or acceptable as credible evidence that he was absent from his classes two or three times a week in March 1956. On the basis of the record, it cannot be found that Velez was absent from school more than two days during that month.

63. Plaintiff caused to be prepared and presented to the Veterans Administration certain monthly certificates of training, form VB7-1996b, in which, it was represented that Mannel Garcia had been absent two days in June 1955, and two days in July 1955. Defendant contends that this veteran was absent from school five days in June 1955, and 7 days in July 1955 (excluding the 4th of July). Garcia was scheduled to attend classes six days a week, Monday through Friday evenings and on Saturdays dui'ing the month in question. Garcia testified that he was absent from his classes for two weeks starting June 27,1955, the date of his daughter’s birth. At the trial, Manuel Garcia was shown a monthly certificate of training, form VB7-1996b, dated July 5, 1955, and he testified that he signed this document on said date at which time he was at the school. Considering all of Garcia’s testimony, it is rejected as being too vague, conflicting, inconsistent, and unreliable. On the basis of the record, there is no credible testimony or other acceptable evidence that will support a finding that Garcia was absent from school more than two days in either June or July, 1955.

64. Plaintiff caused to be prepared and presented to the Veterans Administration a certain monthly certificate of training form VB7-1996b, in which it was represented that Marcos Diaz had been absent one day in April 1956. Defendant contends that this veteran was absent from school 15 days in said month. Diaz was scheduled to attend classes Monday through Friday evenings and Saturday afternoons during the month in question. He testified that about April 4 or 5, 1956, he “broke his hand”, which necessitated a visit to Bellevue Hospital in New York City, and that as a result thereof, he was out of school about 15 or 20 school days in April 1956. During all times material here, Diaz was employed by A. Klein and Company, New York City. Employment records of said company relating to Diaz show that he worked a total of 24 hours during the week ending April 7, 1956, but the records do not disclose the particular days he worked during that week. The employment records further disclose that Diaz did not work after the week ending April 7, 1956, until the week ending April 28, 1956, during which week he worked four hours; that he again went off work and did not return until the week ending June 2, 1956, during which week he worked 49 hours; and that the period of his unemployment from the week ending April 7, 1956 to the week ending April 28, 1956, and from the week ending April 28, 1956 to the week ending June 2, 1956, was due to a disability on his part.

Diaz also presented additional credible testimony that subsequent to the first time he was treated at Bellevue Hospital in April 1956, he was allowed to resume work and that, thereafter, he again hurt his hand while at work and had to return to the hospital.

Plaintiff submits a number of reasons in support of its argument that Diaz presented conflicting and inconsistent testimony; that defendant’s contention is not supported by credible evidence; and that, in fact, Diaz was absent 14 days in March 1956, rather than in April 1956. While Diaz was unable to recall being absent in March 1956, the record clearly shows that this veteran was absent 14 days in that month. Although it appears from testimony presented by Eizenman and certain documentary evidence of record that the Veterans Administration possibly may have charged Diaz with an excessive number of absences in March 1956, resulting in his receiving a “short” check for that month, the facts relating to the foregoing do not justify a finding that Diaz broke his hand and was absent from school in March, rather than April, 1956. The record also contains convincing proof that he broke his hand sometime during the early part of the first week in April 1956; that he returned to work during the week ending April 28,1956 and reinjured his hand; and that he was absent about 15 days in April 1956, as well as 14 days in March 1956.

65. Plaintiff caused to be prepared and presented to the Veterans Administration a certain monthly certificate of training form VB7-1996b, in which it was represented that Jose A. Huertos-Ramos had been absent from school three days in February 1956. Defendant contends that this veteran was absent 16 days in said month. Ramos was required to attend school Monday through Friday evenings and on Saturday during February 1956. He testified that sometime in February 1956, he traveled to Puerto Rico to visit his mother who was very ill, and remained out of the country for 15 or 16 days in that month during which time he was absent from school. Upon his return from Puerto Rico, Ramos discussed his absence and the effect it would have on his check from the Veterans Administration for the month of February with Frank Simon who told Ramos “Don’t worry about it.” At the time Ramos signed his monthly training certificate for February 1956, the boxes appearing on the form for the recording of the dates of absences were blank. While Ramos testified that in recent years he had made a number of visits to Puerto Rico, his recollection as to certain events and dates was not entirely accurate, but considering all circumstances, his testimony is accepted as reliable and credible evidence of the fact that he was absent from school about 15 days in February 1956.

66. Plaintiff caused to be prepared and presented to the Veterans Administration a certain monthly certificate of training form VB7-1996b, in which it was represented that Jose Rosa-Garcia had been absent four days in March 1956. Defendant contends that Garcia was absent 12 days in that month. Garcia was scheduled to attend classes Monday through Friday evenings and on Saturday during March 1956. It appears from Garcia’s testimony that on March 18, 1956, he traveled to Puerto Rico, the occasion of the trip being the death of his mother, Julia Garcia Roman, who resided in that place; that he returned to the United States on April 6, 1956; and that the first day he attended classes at the school after his return from Puerto Rico was on or about April 7, 1956. A death certificate in evidence shows that Garcia’s mother died on March 16, 1956. Before going, Garci'a told his instructor Rancier of his plans. Upon Garcia’s return from Puerto Rico, he discussed his absence with Mr. Simon who gave him a blank monthly certificate of training form VB7-1996b to sign for the month of March 1956. After signing this certificate, which bears the date of April 6,1956, opposite Garcia’s signature, Simon made an entry in a book and told Garcia to rejoin his class.

Plaintiff submitted a number of reasons in support of its argument that Garcia’s testimony should be rejected as unreliable and that if, in fact, Garcia was absent more times in March 1956 than reported, Simon had no knowledge of such fact. Although Garcia was unable to recall certain dates or the names of his instructors, upon consideration of his testimony, it is accepted as credible evidence. On the basis of the whole record, it is found that Garcia was absent from school 12 days during the month of March 1956, and that Simon had knowledge of the fact that Garcia was absent more than four days in said month as represented in the above-mentioned training certificate.

67. Plaintiff caused to be prepared and presented to the Veterans Administration a certain monthly certificate of training form VB7-1996b, in which it was represented that Juan Velezquez-Felix had been absent two days in July 1956. Defendant contends that this veteran was absent from school “about” ten days in July 1956. Felix was scheduled to attend classes Monday through Friday evenings and on Saturday during that month. He testified that he was absent nine, ten, or eleven days in each of the last two months of his enrollment at Eastern School and that he left Eastern School in 1956, but he could not remember which month he terminated. Documentary evidence of record shows that Felix’s training at Eastern School was interrupted on August 9, 1956. Felix’s testimony is rejected as being too vague and unreliable to be accorded any weight, or accepted as credible evidence relevant to the issues involved in this case. On the basis of the record, it cannot be found that Felix was absent more than two days in July 1956.

68. Plaintiff caused to be prepared and presented to the Veterans Administration a certain monthly certificate of training, form VB7-1996b, in which it was represented that Dolando Luis Blanco had not been absent in December, 1955. Plaintiff also caused to be prepared and presented to the Veterans Administration another certain monthly certificate of training form VB7-1996b, in which it was repre-seated that Blanco had not been absent in January 1957. Defendant contends that Blanco was absent about two weeks, or 12 days, in December 1955, and two or three weeks, or between 10 and 15 days (excluding Saturdays), in January 1957. Blanco was scheduled to attend classes six days a week during December 1955 and 5 days during January 1957. At the trial, Blanco presented testimony which is of such a vague, non-specific, and contradictory nature that it must be rejected as credible evidence. Considering Blanco’s testimony and the entire record, it cannot be found that defendant has proved that this veteran was absent from school in either December 1955, or January 1957.

69. Plaintiff caused to be prepared and presented to the Veterans Administration certain monthly certificates of training forms VB7-1996b, in which it was represented that Enrique Nieves-Maldonado had been absent one day in December 1956, and one day in J anuary 1957. Defendant contends that this veteran was absent from school beginning December 26, 1956, through about January 16, 1957, inclusive, or four days in December 1956, and 11 days in January 1957. It is not entirely clear whether Maldonado was required to attend classes five or six days a week during December 1956 and J anuary 1957; but since defendant’s requested findings indicate it is content with five days a week, this figure is adopted. It is clear from testimony presented by Maldonado, and supporting documentary material introduced in evidence through him, (airline tickets — see Defendant’s Exhibit Nos. 108 (a) and (b)) that on December 24, 1956, he left the United States for Puerto Pico and returned therefrom on January 17, 1957. After considering all of the reasons submitted by plaintiff in support of its argument that there is no credible evidence that Maldonado was absent from the country and his classes during the above-mentioned period of time, it is found, on the basis of the whole record, that he was absent from school four days in December 1956, and 11 days in January 1957. It is further found that subsequent to the time he returned from Puerto Rico and resumed classes, Maldonado spoke to Frank Simon about his absences while on the trip and was told it was “okay”; that Maldonado signed the monthly training certificate for the month of December 1956, in blank, in conformity with plaintiff’s practice but that he did not sign it on January 3,1957, the date appearing thereon in item 9 as the date of signing, nor did he enter said date.

70. The monthly certificates of training, form VB7-1996b, submitted to the Veterans Administration were prepared in plaintiff’s offices and sent by clerks who worked under the supervision, direction, and control of Frank Simon and Benjamin Eizenman. Prior to October or November 1954, these clerks transcribed the attendance and absences of the individual veterans from an attendance record card. Thereafter, the transcriptions were made from an attendance register or roll book, to the school ledger, and to the monthly certificate of training, form VB7-1996b, simultaneously. After the monthly certificates of training were completed, they were double-checked with the school ledger before they were sent to the Veterans Administration. The teachers were required to take attendance in the class and they were the only ones who were supposed to post entries in the roll book. The Public Law 550 students, with a few exceptions not material here, were billed by the plaintiff school for the time they were enrolled and not for actual attendance. There is no evidence that any of the monthly certificates of training reflected information different from that recorded on the applicable attendance card or register, but the attendance record or register did not, in all instances, accurately reflect a student’s absence.

71. It was certified by, or on behalf of, plaintiff in each of the monthly certificates of training, form VB7-1996b, concerning Gabino Ocasio-Santiago, Marco Diaz, Jose A. Huertos-llamos, Jose Bosa-Garcia and Enrique Nieves-Maldonado (mentioned in findings 61,64,65,66 and 69, supra, respectively), that “(1) During the period shown in item 3 this veteran was enrolled in and pursued his approved program of education and training except for the days of absence indicated herein.” All of said forms were executed by either Benjamin Eizenman or Muriel Bishop, Assistant Begistrar, who was indisputably an agent of plaintiff acting at the direction and under the supervision of Frank Simon and Benjamin Eizenman.

72. (a) It is undisputed, and tbe record is clear from testimony presented by Frank Simon and three teachers who taught Public Law 550 veteran-students during times material here, that from about 1952 or 1953, to the time the school closed in 1957, both Frank Simon and Benjamin Eizenman instructed teachers at Eastern School to leave blank spaces in the daily attendance records after a student had been absent for more than two consecutive days, even though the student was absent on the third day and following. The record shows that the above-mentioned instructions were particularly applicable to veteran-students.

(b) According to testimony presented by Mr. Simon, the policy of the school was to suspend any student who did not attend class on the third day, which meant that he could not attend class without reporting to either Mr. Simon, a supervisor, or the office, and that if a student was absent for a third consecutive day, a letter was sent to him by the school informing him that if he could not return to school, his training would be interrupted. The unconvincing reason given by plaintiff for adopting the above-mentioned policy and procedure was to cause the students to become concerned about their attendance at an early date, since they knew it was possible for them to miss 30 days of class in a year and still receive payments from the Veterans Administration.

In the absence of credible corroborating evidence, Mr. Simon’s testimony is not accepted as proof that the above-mentioned policy was actually adopted, or implemented in the manner described by him.

(c) On the basis of the record, it cannot be found, as contended by plaintiff, that the Veterans Administration knew and approved of the above-mentioned policy and procedure which plaintiff claims was followed with respect to making entries in the attendance records, suspending students with excessive absences, and notifying them they would be interrupted if their absences continued.

73. Plaintiff sharply attacks the credibility of testimony presented by Pablo R. Rancier, Meyer Glikin, and Ralph Paniague, who had been employed as teachers at Eastern School during certain times material here. None of the above-named teachers taught any of the Public Law 346 students who testified in this case, but Rancier did teach two of the Public Law 550 students who were witnesses at the trial. While these teachers were unable to recall the name of a single student whose attendance was falsely reported, they presented credible testimony to the effect that Mr. Simon and Mr. Eizenman instructed them to make entries in the blank spaces in the daily attendance records so as to indicate a certain student was present when, in fact, he was absent. This was done in order, among other reasons, to give the veterans a “break” when they were out sick, and avoid their receiving a “short” check from the Veterans Administration. 'It also may be reasonably inferred that another reason was to encourage veterans to remain in school, which would be to the financial advantage of plaintiff school. It is clear that these instructions were carried out by the teachers. Although Paniague admitted that on several occasions he marked students present when they were absent, without being specifically instructed by Simon or Eizenman to do so, because, for one reason, the student was sick and out of school, it may be reasonably inferred from the evidence that this particular teacher acted 'as stated by him, well knowing from previous instructions given to him by Simon and Eizenman that they were sympathetic to such a course of conduct and would not have any objection thereto.

Eancier and Glikin also presented credible testimony that on some occasions, after they had submitted attendance records to the school’s office which did not reflect whether a certain student was absent or present, such records were returned to them at the start of classes with the blank spaces filled in by some unidentifiable person, showing that a particular student was present when, in fact, he was absent.

On the basis of the whole record, it is found that Frank Simon and Benjamin Eizenman induced or caused the falsification of some attendance records knowing such action would result in materially deceiving the Veterans Administration as to the amount of education and training allowances certain Public Law 550 veterans should receive.

74. (a) Upon consideration of the entire record, it is concluded and found that Frank Simon and Benjamin Eizenman had knowledge that Gabino Ocasio-Santiago, Marco Diaz, Jose A. Huertos-liamos, Jose Rosa-Garcia, and Enrique Nieves-Maldonado were absent from their classes at Eastern School for longer periods of time than represented on the monthly certificates of training forms VB7-1996b, which were prepared 'and submitted to the Veterans Administration by Simon and Eizenman, or agents of plaintiff school acting under their direction and control.

(b) However, there is clear and convincing evidence that plaintiff knowingly prepared false claims only with respect to Jose Rosa-Garcia and Jose A. Huertos-Ramos. For the same reason that there was not clear and convincing evidence of a violation of the False Claims Act with respect to the witnesses who were proved absent for periods in excess of absences reported in the first counterclaim, there is no violation with respect to Gabino Ocasio-Santiago, Marcos Diaz, and Enrique Nieves-Maldonado.

(c) The clear and convincing evidence test is met by adding to the proof of absence the testimony of the teachers and notably the testimony of Rancier who taught both Ramos and Garcia. There is clear and convincing evidence that plaintiff (through its partners) instructed the teachers to falsify attendance, that Rancier followed this policy on many occasions, that Simon (who with Eizenman was responsible for the policy) knew of the absences, and that the certificate of training did not report the absences. Although there is no proof that either Simon or Eizenman actually prepared the false certificates, plaintiff Cannot avoid responsibility in these circumstances. Simon and Eizenman knew of the policy and when informed by the two students of the absences should have known there was a substantial risk that Rancier would follow the instructions.

75. On the basis of the whole record, it is concluded and found that there is clear and convincing proof that entitles defendant to recover from plaintiff Eastern school, Frank Simon, and Benjamin Eizenman, jointly and severally, $4,000, consisting of two forfeitures, under 31 U.S.C. § 231, of $2,000 each for the following two false certificates:

Certificate of Jose A. Huertos-Ramos (finding 65, supra,). Certificate of Jose Rosa-Garcia (finding 66, supra).

C. THIRD COUNTERCLAIM

76.Defendant’s third counterclaim was predicated on Section 266 of Public Law 550 (see last paragraph of footnote 7); however, defendant has not submitted any findings nor requested any damages on this counterclaim.

Summary oe Ultimate Findings and Damages

In summary, upon the basis of the entire record, it is found as follows:

I

Plaintiff’s Affirmative Claim — Tuition Rate

77. The fair and reasonable rate of tuition for the Radio Technology course, commencing January 1, 1950, is $.521 per student-hour. (See finding 26, supra.)

II

78. (a) Plaintiff provided 292,001.1 instructional hours prior to May 15,1951, and 750,899.3 hours subsequent to said date or a total of 1,042,900.3 hours. (See finding 27, supra.)

(b) It is concluded that plaintiff is entitled to additional compensation on the basis of a new tuition rate of $.521 per student-hour found to be fair and reasonable, and that plaintiff’s claim for instruction provided prior to May 15, 1951, is not barred by the six-year statute of limitations, so that plaintiff is entitled to recover the difference ($.102) between that rate and the rate of $.419 determined by the Veterans Education and Appeals Board to be fair and reasonable, times 1,042,900.3 hours, or $106,375.83 (1,042,900.3 x $.075).

III

Defendant’s Counterclaims

FIRST COUNTERCLAIM

79.Defendant is not entitled to recover anything on its first counterclaim.

SECOND COUNTERCLAIM

80. (a) Two monthly certificates of training form VB7-1996b, which were prepared and submitted to the Veterans Administration by Frank Simon and Benjamin Eizenman, or agents of plaintiff Eastern School acting under their direction and control, contained representations concerning the attendance of certain Public Law 550 veteran-students which Simon and Eizenman should have known to be false, fraudulent, or fictitious; such certificates were made and used for the purposes of obtaining, or aiding to obtain, payment or approval of the claims of such students for education and training allowances; and the Veterans Administration made payments to these veterans relying upon false representations contained in said monthly certificates. (See finding 74, supra.)

(b) Defendant, on its second counterclaim, is entitled to recover from plaintiff Eastern School, Frank Simon, and Benjamin Eizenman, jointly and severally, for two forfeitures of $2,000 each, or $4,000 under the False Claims Act. (See finding 74, supra, also finding 84, supra and footnote 7.)

THIRD COUNTERCLAIM

81. Defendant is not entitled to recover anything on its third counterclaim.

CONCLUSION OP LAW

Upon the foregoing findings of fact, which are made a part of the judgment herein, the court concludes as a matter of law that plaintiff is entitled to recover the amount of one hundred six thousand, three hundred seventy-five dollars and eighty-three cents ($106,375.83) on its affirmative claim. The court further concludes that defendant is entitled to recover the amount of four thousand dollars ($4,000) on its second counterclaim, and offsetting one recovery against the other, judgment is entered for plaintiff in the sum of one hundred two thousand, three hundred seventy-five dollars and eighty-three cents ($102,375.83). The defendant is not entitled to recover on its other counterclaims which are dismissed. 
      
      
        E.g., National Schools v. United States, 175 Ct. Cl. 578, 361 F. 2d 250 (1966); Chicago School of Automotive Trades, Inc. v. United States, 167 Ct. Cl. 106 (1964); West Coast University v. United States, 162 Ct. Cl. 310 (1963); Honolulu Trade School, Ltd. v. United States, 154 Ct. Cl. 397 (1961); Central Technical Institute v. United States, 151 Ct. Cl. 693, 284 F. 2d 377 (1960); Germain School of Photography, Inc. v. United States, 150 Ct. Cl. 841, 281 F. 2d 452 (1960); B. & S. Lenox Trade School, Inc. v. United States, 145 Ct. Cl. 723 (1959); Hemphill Schools, Inc. v. United States, 146 Ct. Cl. 559 (1959); Tennessee Mechanical Institute, Inc. v. United States, 145 Ct. Cl. 344 (1959); Empire Institute of Tailoring, Inc. v. United States, 142 Ct. Cl. 165, 161 F. Supp. 409 (1958); Honolulu Trade School, Ltd. v. United States, 142 Ct. Cl. 794 (1958); Massachusetts College of Pharmacy v. United States, 141 Ct. Cl. 775 (1958); Radio-Television Training Association, Inc. v. United States, 143 Ct. Cl. 416, 163 F. Supp. 637 (1958); Sawyer, d/b/a Northwest-Broadcasting School v. United States, 142 Ct. Cl 169, 161 F. Supp. 610 (1958); Little, d/b/a Southern School of Insurance v. United States, 138 Ct. Cl. 773, 152 F. Supp. 84 (1957); Art Center School v. United States, 136 Ct. Cl. 218, 142 F. Supp. 916 (1956); Feener Technical Schools, Inc. v. United States, 136 Ct. Cl. 94, 141 F. Supp. 777 (1956); National School of Aeronautics, Inc. v. United States, 135 Ct. Cl. 343, 142 F. Supp. 933 (1956); Hemphill Schools, Inc. v. United States, 133 Ct. Cl. 462 (1955); McSweeny Trade School, Inc. v. United States, 131 Ct. Cl. 445, 127 F. Supp. 591 (1955).
     
      
       We refer here to the conduct of one of the Eastern School partners who participated in the trial both as an attorney and witness. Perhaps because of his personal involvement in the case (in which he is effectually accused of fraud) he was somewhat ovmealous in his objections and cross-examinations of witBesses,
     
      
       Tie Trial Commissioner erroneously found that June 4, 1957 was the date of filing. On that day plaintiff filed its first amended petition in printed form. The second filing was required because the original petition was typewritten; rule 1(c) permits the filing of typewritten petitions' on condition that 25 printed copies be filed within 20 days thereafter.
     
      
       The students for whom the higher tuition rate is claimed received benefits under the 1944 G.I. Bill which was Public Law 346, 58 Stat. 284 (1944). They are referred to as “346” students. Also involved in this case are so-called “550” students, although no claim is made on their behalf. They are Korean War veterans who received benefits under Public Law 550, 66 Stat. 668 (1952). Their testimony is relevant in connection with defendant’s second counterclaim.
     
      
       See n. 4, supra.
      
     
      
      
        ma.
      
     
      
       Nor purposes of negotiating a new tuition rate for the calendar year 1950, plaintiff gave the VA a cost statement for the period November 1, 1948 to October 31, 1949. Actually, this cost statement only covered the 9-month period of the Radio Technology course’s life, i.e., February 1 to October 31, 1949. The negotiations continued into November 1950, making it possible for plaintiff to submit a more recent cost statement for the period November 1, 1949 to October 31, 1950. The Hearing Examiner refused to consider this later cost statement. In reviewing the Examiner and fixing a new rate, the VEAB did consider the later cost statement as well as the earlier. Both statements are now before the court as parts of the administrative record.
     
      
      .Since the issue has been raised, we think it is appropriate, to say something about the scope of judicial review in these cases. The Commissioner has ostensibly applied the familiar substantial evidence test here, thereby suggesting perhaps that he thought the VEAB decision was entitled to finality under wunderlieh Act standards. See 41 U.S.C. §§ 321-322 (1964 Ed.). His decision to conduct a de novo trial to build a new record was not inconsistent with administrative finality because review on a de novo record was accepted procedure in this court in its pre-Bianohi era. See United States v. Carlo Bianchi & Co., 373 U.S. 709 (1963). Actually there are significant differences between the government contract administrative process and the VA’s administrative process which may suggest a broader scope of review in the latter area.
      The VEAB was first established in 1949 and was made a permanent fixture of the VA the following year. 63 Stat. 631, 653 (1949) ; 64 Stat. 336, 338 (1950). Both statutes gave contractors the right to Board review of the Administrator’s decisions and subjected Board proceedings to the provisions of sections 5 and 11 of the Administrative Procedure Act. It was also provided that Board decisions “shall constitute the final administrative determination.” The combination of section 10 of the Administrative Procedure Act, which limits the scope of judicial review of administrative decisions, and the “final administrative determination” language of the VA statutes, might suggest that VEAB decisions should be entitled to finality with judicial review limited to the now familiar standard. See United States v. Utah Construction & Mining Co., 384 U.S. 394 (1966). First, regarding the application of the Administrative Procedure Act, it is important to note that we are not sitting as a court of appeals to review the actions of an administrative body ; this case is before us under our Tucker Act jurisdiction. Plaintiff might also have been entitled to review of the rate determination in another Federal court, but it chose instead to sue the united States as the other party to the transaction. See Hemphill Schools, Inc. v. United States, 133 Ct. Cl. 462 (1955). There is no suggestion in the statutes that the standards of the Administrative Procedure Act should apply to another system of review — although that would not be an unreasonable result. Second, with respect to the “final administrative determination” language, it should be noted this is very different language from that used in the standard disputes clause which provides the “decision [of the contracting officer] shall be final and conclusive upon the parties hereto.” We conclude the statute does no more than state that a Board decision marks the end of the administrative process. Of course the Board decision is entitled to some weight, perhaps great weight, and it may be desirable as a matter of policy to defer to the Board’s expertise. However, that kind of policy decision is very different from the mandate in the standard government contract’s disputes clause.
     
      
      We adopt the Commissioner’s findings regarding the three other veterans without comment; the parties have not excepted to them.
     
      
      After DeCuir was excused as a witness, defendant evidently talked with him and found out that he had duplicate airplane tickets and a stamped ticket envelope, which would corroborate his testimony. Defendant requested that DeCuir be allowed to testify again because of this “newly discovered evidence.” The Commissioner took the testimony on an offer of proof, but after the trial decided to allow the new testimony in evidence. We agree with his ruling, noting that this and a number of similar evidence problems could have been avoided had the government prepared more thoroughly. Many of the government witnesses indicated on cross-examination that they might have some records which could corroborate their testimony. Evidently the government never attempted to get this information, thereby making proof of its case more difficult.
     
      
       Under Public Law 550, 66 Stat. 663 (1952), it will be recalled that schools sent vouchers certifying veterans’ attendance to the VA, which then paid benefits directly to the veterans who, in turn, paid the schools the “fair and reasonable” tuition.
     
      
       Tr., p. 846.
     
      
       An EBI agent testified at the trial that he prepared a written statement on the basis of an interview he had in 1958 with Huertos-Ramos who refused to sign the statement because “he couldn’t remember the exact date” of his absence. The Commissioner ruled that the defendant did not have to produce the statement or show it to plaintiff because it was unsigned and not approved. Citing Campbell v. United States, 373 U.S. 487 (1963), which was decided subsequent to the trial, plaintiff argues now that under the .Tencks Act, 18 U.S.C. § 3500 (1964 Ed.), plaintiff was entitled to see the statement, that statements producible under the .Teneks Act include not only “signedi” statements, but also any statements “otherwise adopted or approved,” § 3500(e)(1), and that by reason of defendant’s failure to produce the statement in question, the testimony of Huertos-Ramos should be stricken.
      We think the Commissioner made the correct ruling. It should be noted first that the Jencks Act applies only to criminal proceedings by its express terms, § 3500(a). This is neither a criminal nor a quasi-criminal proceeding as the discussion of double jeopardy in the text, infra, makes clear. Second, it should be emphasized that Huertos-Ramos did not sign the statement or otherwise approve the contents.
     
      
       The defendant might be entitled to its “costs of suit” under the False Claims Act. No allowance is made for this item, however, because the defendant has not offered any evidence concerning these costs, nor has it made any claim therefor.
     
      
       The parties agree the vouchers show that plaintiff provided a total of 1,043,019.3 compensable hours of instruction to “346” students enrolled in the Radio Technology course. (This is the only subject matter of the affirmative claim.) The government asserts in its first counterclaim, which relates to “346” students, that plaintiff over-reported attendance for 213.5 hours. We have adopted the Commissioner’s findings that the plaintiff over-reported 119.0 hours. Accordingly, we have reduced the number of compensable hours to 1,042,900.3.
     
      
       See finding 27, infra, relating to the number of instructional hours involved in this action. In this connection, it should be noted that during pretrial proceedings in this court, the commissioner allowed plaintiff’s motion to amend its petition to increase the amount claimed from “not to exceed $100,000” to “not to exceed $120,000.”
     
      
      This cost statement was before the Board and is the only one submitted (and not withdrawn) by plaintiff in the instant case pursuant to order issued under old Rule 28(b).
     
      
       This cost statement was also before the Board and was submitted in the instant case pursuant to order issued under old Rule 28(b), but, subsequently it was withdrawn.
     
      
       As indicated in footnotes 2 and 3, supra, plaintiff’s claim in instant case for an amount over and above that allowed 'by the Board for laboratory assistants is based upon testimony presented by plaintiff during the trial which is not supported by books and records or schedules prepared on the basis thereof as contemplated by old Rule 28 (b).
     
      
       As indicated hereinbefore, this cost statement was submitted but later withdrawn by plaintiff. The evidence introduced by plaintiff during the trial of the case in support of the item of expense consisted of oral testimony which was not supported by boohs, records, or other documentary evidence. Defendant objected to findings based upon such testimony on the grounds that plaintiff had not complied with the commissioner’s Rule 28(b) order; however, defendant stated at the trial it had no objection conditioned on the assumption that plaintiff was required to have a 22 to 1 student-teacher ratio. The present finding is based on both cost statements; this does not prejudice the defendant because both were part of the record before the Board.
     
      
      The comparable schedule of the Board appears In finding 9(a), supra.
      
     
      
       The relevant portions of this statute read as follows:
      “Liability of persons making false claims. Any person not in the military or naval forces of the United States, or in the militia called into or actually employed in the service of the united States, who shall make or cause to be made, or present or cause to be presented, for payment or approval, to or by any person or officer in the * * * service of the united States, any claim upon or against the Government of the United States, or any department or officer thereof, knowing such claim to be false, fictitious, or fraudulent, or who, for the purpose of obtaining or aiding to obtain the payment or approval of such claim, makes, uses, or causes to be made or used, any false bill, receipt, voucher, roll, account, claim, certificate, affidavit, or deposition, knowing the same to contain any fraudulent or fictitious statement or entry, or who enters into any agreement, combination, or conspiracy to defraud the Government of the united States, or any department or officer thereof, by obtaining or aiding to obtain the payment or allowance of any false or fraudulent claim, * * * shall forfeit and pay to the United States the sum of $2,000, and, in addition, double the amount of damages which the United States may have sustained by reason of the doing or committing such act, together with the costs of suit; * *
      The first counterclaim is brought under the first provision of the statute, i.e., the clause which reads in part: “* * * knowing such claim to be false, fictitious, or fraudulent”. The second counterclaim is brought under the second provision of the statute, i.e., the clause which reads in part: “* * * knowing the same to contain any fraudulent or fictitious statement or entry”. Defendant also alleged a conspiracy to defraud on the part of plaintiff in violation of the third provision of the statute, i.e., the clause which reads in part: “* * * enters into any agreement, combination or conspiracy to defraud the united States * *
      In making conelusionary findings, the standard of proof used by the commissioner to test the validity of defendant’s counterclaims was whether or not defendant had adduced “clear and convincing” evidence that plaintiff knew that the claims in question here were false, fictitious, or fraudulent.
      Defendant brought a third counterclaim pursuant to the provisions of Section 266, Public Law 550, 82nd Congress, 11 Stat. 680, under the authority of 28 U.S.C. § 1503, rather than under the False Claims Act. However, as noted in finding 76, infra, defendant did not request findings or submit evidence of any damages with respect to this claim and appears to have abandoned the same.
     
      
       While it is not entirely clear from the record, it appears that except for the letter of June 13, 19S5, which did not relate to the Radio Technology course in any way, that these letters concerned either the Radio Technology course alone, or both that course, the Radio Technician, and FM and Television Technician, courses.
     
      
       After DeCuir testified on direct and cross-examination, was excused, and talked with defendant’s counsel, the latter reguested that DeCuir be permitted to resume the stand for the stated purpose of “clarifying” his previous testimony. under the foregoing circumstances, in the interest of fairness to plaintiff and due to the unusual difficulties encountered! in conducting the trial in an orderly manner, the commissioner sustained plaintiff’s objection to the recall of this witness. Some days later, defendant made another request that DeCuir be allowed to present additional testimony on the stated grounds of “newly discovered evidence”. Plaintiff’s objection to defendant’s last-mentioned request was sustained, but defendant was permitted to recall DeCuir to present further testimony and evidence on an offer of proof. As a part of the offer of proof, DeCuir produced the duplicate originals of two sets of airplane tickets issued on August 2, 1954, by Trans World Airlines, Inc., which showed that air transportation was purchased by DeCuir and his wife from New York City to Los Angeles, California, with a scheduled departure date from New York of August 6, 1954, and from San Francisco to New York, via Chicago, with the scheduled departure from San Francisco on August 25, and from Chicago on August 29, 1954. A TWA ticket envelope for a “Group of 2”, stamped at Chicago August 29, 1954, also was included as part of defendant’s offer of proof. (The above-mentioned tickets and envelope were marked for identification as Defendant’s Exhibits No. 114 (a), (b) and (c), respectively, and were filed by the reporter with the transcript of the evidence, pursuant to Rule 49(c)(2)). Plaintiff was given an opportunity to cross-examine DeCuir on the testimony and documentary evidence presented on the offer of proof.
      After the trial, the commissioner decided to allow the new testimony in evidence. The court agrees with his ruling. Regarding the conflicting evidence that DeCuir signed attendance cards every day in August 1954, it can only be reconciled by assuming that the card was signed either before or after the trip. No finding is made to that effect, however. It is simply found that the testimony regarding the trip and the corroboration provided by the airline ticket should be entitled to considerably more weight than the attendance card.
     
      
       At the trial, Fishman identified Ms signature on a written statement obtained from Mm by two FBI agents on April 29, 1958. While this statement was not received in evidence, it appears that Fishman stated therein that he was on vacation in June or July 1955. At the trial, Fishman stated un-eguivocally that he took his vacation in July 1955, and that the June date was incorrect. Fishman also testified that he also was absent from school “at least eight days” in June 1955, and plaintiff’s records reflect that Fishman was absent ten days in June 1955. On the basis of the foregoing, plaintiff suggests the unacceptable inference that Fishman was actually on vacation in .Tune, rather than July, 1955.
     
      
      Defendant asserts that plaintiff represented Kasten had been absent 12 days during this period; but the voucher in question shows plaintiff indicated absences totaling 13 days.
     
      
       See finding 34, supra, and footnote 7.
     
      
       Different procedures were involved under Public Law 550 and Public Law 346. TJnder Public Law 346, the Veterans Administration paid the school a stipulated amount per hour of instruction pursuant to contracts extended from time to time by formal amendments and interim rate letters. Under Public Law 550, the Veterans Administration, after the school and the veteran had certified to the Veterans Administration that the veteran was in attendance and was pursuing his course of study, would make payment directly to the veteran at a rate fixed by the Veterans Administration, and the veteran, in turn, would pay the school based on the number of hours of monthly instruction furnished by the school. Apparently, under Public Law 550, there was no direct contract between plaintiff and defendant.
     
      
       Subsequent to August 1956, most classes on Saturdays were discontinued (see finding 59, supra) • so that defendant excludes absences on Saturdays from that date in computing the absences in terms of days relative to this veteran and all the other Public Law 550 veterans mentioned in findings, infra, Involved in defendant’s second counterclaim.
     
      
       An FBI agent testified at the trial that he prepared a written statement on the basis of an interview he had in 1958 with Ramos who refused to sign the statement because “he couldn’t remember the exact date” of his absence. The commissioner ruled that the defendant need not produce the statement nor show it to plaintiff because it was unsigned and not approved. Plaintiff, citing Campbell v. United States, 373 U.S. 487 (1963), decided subsequent to the trial, argues that under the Jencks Act, 18 U.S.C. § 3500 (d), (e) (1904), plaintiff was entitled to see the statement; that statements producible under the Jencks Act, Sec. (e)(1), include not only “signed” statements but also any statement “adopted or approved”, and that by reason of defendant’s failure to produce the statement in question, the testimony of Ramos should be stricken. ,It should be emphasized that Ramos did not sign the statement or specifically approve the contents thereof.
     
      
      In arriving at tMs total of 15 days, Christmas Day (1956), New Years Day (1957), nor Saturdays (in 1956 or 1957) were counted as school days.
     
      
       One of the teachers testified that he left attendance records on a shelf in the “storeroom” at night and would pick them up in the office or “stockroom” at the start of the class on the following day, and that, during the intervening period, the records were marked as indicated. It is not clear from the record whether the foregoing procedure was the one regularly followed by all of the teachers when they “submitted the attendance records to the school office.”