§ 81.33 Mitigating circumstances. ( a ) A recipient that is a State or local educational agency and that has made an unallowable expenditure or otherwise failed to account properly for funds is not required to return any amount that is attributable to the mitigating circumstances described in paragraph (b), (c), or (d) of this section.
( b ) Mitigating circumstances exist if it would be unjust to compel the recovery of funds because the recipient's violation was caused by erroneous written guidance from the department. To prove mitigating circumstances under this paragraph, the recipient shall prove that— ( 1 ) The guidance was provided in response to a specific written request from the recipient that was submitted to the Department at the address provided by notice published in the Federal Register under this section;
( 2 ) The guidance was provided by a Departmental official authorized to provide the guidance, as described by that notice;
( 3 ) The recipient actually relied on the guidance as the basis for the conduct that constituted the violation; and
( 4 ) The recipient's reliance on the guidance was reasonable.
( c ) Mitigating circumstances exist if it would be unjust to compel the recovery of funds because the recipient's violation was caused by the Department's failure to provide timely guidance. To prove mitigating circumstances under this paragraph, the recipient shall prove that— ( 1 ) The recipient in good faith submitted a written request for guidance with respect to the legality of a proposed expenditure or practice;
( 2 ) The request was submitted to the Department at the address provided by notice published in the Federal Register under this section;
( 3 ) The request— ( i ) Accurately described the proposed expenditure or practice; and
( ii ) Included the facts necessary for the Department's determination of its legality;
( 4 ) The request contained the certification of the chief legal officer of the appropriate State educational agency that the officer— ( i ) Examined the proposed expenditure or practice; and
( ii ) Believed it was permissible under State and Federal law applicable at the time of the certification;
( 5 ) The recipient reasonably believed the proposed expenditure or practice was permissible under State and Federal law applicable at the time it submitted the request to the Department;
( 6 ) No Departmental official authorized to provide the requested guidance responded to the request within 90 days of its receipt by the Department; and
( 7 ) The recipient made the proposed expenditure or engaged in the proposed practice after the expiration of the 90-day period.
( d ) Mitigating circumstances exist if it would be unjust to compel the recovery of funds because the recipient's violation was caused by the recipient's compliance with a judicial decree from a court of competent jurisdiction. To prove mitigating circumstances under this paragraph, the recipient shall prove that— ( 1 ) The recipient was legally bound by the decree;
( 2 ) The recipient actually relied on the decree when it engaged in the conduct that constituted the violation; and
( 3 ) The recipient's reliance on the decree was reasonable.
( e ) If a Departmental official authorized to provide the requested guidance responds to a request described in paragraph (c) of this section more than 90 days after its receipt, the recipient that made the request shall comply with the guidance at the earliest practicable time.
(Authority: 20 U.S.C. 1221e-3, 1234(f)(1), 1234b(b), and 3474(a))
[54 FR 19512, May 5, 1989. Redesignated at 58 FR 43473, Aug. 16, 1993]