Opinion ID: 467580
Heading Depth: 2
Heading Rank: 1

Heading: Claim of Due Process Violation.

Text: 12 The City asserts that it was never informed of the specific CETA provisions or regulations which prohibit either payments to ineligible participants or undocumented expenditures due to lost or misplaced files of participants. The City contends that it was thereby deprived of the due process right to notice of prohibited conduct prior to being penalized for alleged transgression. We disagree. In his opinion, the ALJ noted that: 13 The record, worked out by the parties, does not contain the details of the programs covered thereby or the texts of the grants. It can be inferred from the Audit Report    and from certain aspects of the controversy    that the grants must have contained the customary and usual General Assurances which obligate a CETA grantee to abide by the Act and present and further regulations issued thereunder   . 14 (ALJ Op. at 2). On appeal, the City did not contest this conclusion. 29 U.S.C. Sec. 835(a)(1) (1978) clearly provides that [e]very recipient of funds    shall make, keep, and preserve such records as the Secretary shall require with regard to each employee and each participant. The applicable regulations further require prime sponsors to ensure that contractors and subrecipients maintain and make available for review    all records pertaining to the operations of programs    consistent with the maintenance and retention of record requirements. 20 C.F.R. Sec. 676.37(a)(3). These provisions clearly require complete documentation concerning CETA participants. Further, in the stipulation to the ALJ, the City conceded that it did not properly maintain its filing system under the CETA grant. In light of the express provisions of the Act and regulation, and the City's concession, we reject the City's contention that it received inadequate notice of its recordkeeping responsibilities. 15 We also note that in the stipulated record the City appears to concede that it must repay the disallowed costs based on monies paid to ineligible participants. Furthermore, the City sought from the ALJ a waiver of part of this non-eligibility disallowance based on lost files. 3 Thus, we conclude that the City received adequate notice that the Act prohibited payment to non-eligible participants. As such, we believe that no violation of the City's due process right to notice occurred. 16 Moreover, in failing to comply with the recordkeeping and eligibility requirements of CETA and its regulations, the City misspent federal funds within the meaning of the statute. Montgomery County, Maryland v. Department of Labor, 757 F.2d 1510, 1513 (4th Cir.1985) (citation omitted). Because the City offered no evidence to demonstrate the eligibility of these participants or to substantiate these expenditures, the Secretary properly disallowed these costs. 17