Opinion ID: 507855
Heading Depth: 2
Heading Rank: 3

Heading: Field Trips

Text: 18 The Secretary set aside the Board's allowance of field trip expenditures. These field trips were all the trips charged to Title I by the District for fiscal years 1981 and 1982. There were a total of 3,320 field trips. For these trips, Title I was charged $454,955. 19 The Secretary did not take evidence or make his own findings of fact; thus, 20 U.S.C. Sec. 2581(b) does not apply. Our review of the Secretary's decision, therefore, focuses on whether he had good cause to set aside the Board's decision regarding the field trips. See 20 U.S.C. Sec. 1234a(d)(1). Without attempting to develop a complete definition of good cause in the context of 20 U.S.C. Sec. 1234a(d)(1), 4 we find it sufficient for the present case to state that, at a minimum, good cause requires that the Secretary's decision not be arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law. 5 U.S.C. Sec. 706(2)(A); see also Bell v. New Jersey, 461 U.S. 773, 792, 103 S.Ct. 2187, 2198, 76 L.Ed.2d 312 (1983). Measured by this minimal standard, the Secretary did not show good cause for setting aside the Board's determination by which it allowed California's field trip expenditures. 20 The Secretary based his rejection on three grounds. He concluded the Board had misapplied the burden of proof, based its decision on improperly faulting the auditors' sampling techniques, and misinterpreted the regulations.
21 The Secretary determined that California's presentation to the Board had not met California's burden of proving that the challenged expenditures were allowable. Although Department regulations placed this burden on California, see 34 C.F.R. Sec. 78.16 (1981), Congress has identified one circumstance under which a state does not have the burden of proving to the Board that challenged expenditures are allowable: 22 The Board shall return to the Secretary for such action as he deems appropriate any final audit determination which, in the judgment of the Board, contains insufficient detail to identify with particularity those expenditures which are not allowable. Unless the Board determines that a final audit determination lacks sufficient detail, the burden shall be upon the State or local educational agency to demonstrate the allowability of expenditures disallowed in the final audit determination. 20 U.S.C. Sec. 1234a(b) (emphasis added). 5 23 The final audit adopted and endorsed the findings and reasoning of the Department's audit report (report). The Department auditors randomly sampled 200 trips, on which they based their decision to disallow expenditures for the entire set of 3,320 trips. The propriety of disallowing expenditures for all trips based on the sample of 200 is not challenged. Of the 200 trips sampled, however, the report and final audit only described 24 trips. The report explained the basis for disallowing these 24 trips and then stated, without further substantiation, that these trips actually described were representative of the entire 200-trip sample. California responded to the report and final audit by producing more detailed descriptions of the educational benefits derived from the 24 field trips mentioned. California also produced sample school site needs assessments and argued that they should have been reviewed by the auditors before any disallowance was made. 24 In commenting on the procedures described in the report, the Board concluded: 25 The costs and basis of the disallowance of the 200 field trips actually reviewed was not included in the audit report. Rather, the audit report contained a few samples specifically picked as exemplars to prove a point. Hence, [we] cannot review the determination as to the 200 field trips [sampled by the auditors] with any specificity. 26 The Board further stated that the record did not support the auditors' determination that none of the 200 field trips sampled was justified. On this basis, the Board allowed California's field trip expenditures. 27 The Secretary, in rejecting this portion of the Board's decision, stated that California had not met its burden of proof before the Board, and that the Board did not recognize this shortcoming. Yet, the Board evidenced familiarity with the burden of proof provision in its conclusion regarding other expenses. It found that California has not sustained its burden of proving that funds totaling $244,495 for training and conference expenses was [sic] properly spent. 28 From our review of the record, it appears the part of the Assistant Secretary's final audit which disallowed California's expenditure for field trips was rejected by the Board because it failed to meet the sufficiency requirements of 20 U.S.C. Sec. 1234a(b) and 34 C.F.R. Sec. 78.11(b)(2). 6 The Assistant Secretary recognized this problem. He stated: If this final audit determination lacked sufficient detail, as the [Board] seems to imply, the proper remedy would have been to reject the final audit determination as not meeting the regulatory requirements in 34 C.F.R. Sec. 78.11 and allowing [sic] the Assistant Secretary an opportunity to correct the alleged defect. The Secretary could have accomplished what the Assistant Secretary indicated would be a proper result if he had remanded the field trips question to the Board. Instead, he simply reversed the Board on this issue and concluded that it had misapplied the burden of proof. By statute, however, California did not have the burden to demonstrate the allowability of expenditures disallowed in the final audit determination if the final audit determination lacked sufficient detail. 20 U.S.C. Sec. 1234a(b). The record indicates the final audit lacked sufficient detail. Therefore, the Board did not misapply the burden of proof, and the Secretary did not act in accordance with law in setting aside the Board's determination on this basis. See 5 U.S.C. Sec. 706(2)(A).
29 A second reason cited by the Secretary in support of his partial reversal of the Board was that [t]he [Board] based its decision not on a substantive review of the field trips in question but on the fact that the auditors extrapolated from a review of 200 randomly selected field trips to the full 3,320 field trips under audit. The Board, however, found that the 200-trip sample could not be adequately evaluated. The Board focused its objections on the quality of the sample and the inferences that it could support, not on the size of and extrapolation from the sample. The Board was concerned about the auditors' extrapolation from the 24 trips mentioned to the 200-trip sample. The Assistant Secretary agrees that extrapolation from the sample of 200 was not the problem. The Secretary's discussion of the Board's review of the 200-trip sample does not support, nor does it establish any cause, for reversing the Board on this ground.
30 The Secretary's third and final basis for reversing the Board's allowance of California's field trip expenditures was based on his interpretation of what would satisfy the regulations' requirements that Title I expenditures be focused on students' special educational needs. As described above, we give considerable deference to the Secretary's interpretation of his agency's regulations. See California, Dep't of Educ. v. Bennett, 833 F.2d 827, 830 (9th Cir.1987); McCoog v. Hegstrom, 690 F.2d 1280, 1284 (9th Cir.1982). Department regulations state that Title I funds shall be used only for projects that are designed to meet the special educational needs of the eligible children. 34 C.F.R. Sec. 200.52 (1981) (earlier version at 45 C.F.R. Sec. 116a.22(b)(4)(iii) (1980)). Title I funds may not be used for a project that has been designed to meet, or will have the effect of meeting, the general needs of--(1) a school; (2) the agency; (3) an entire grade; or (4) the student body at large in a school. Id. (earlier version at 45 C.F.R. Sec. 116a.22(b)(6) (1980)). 31 In the final audit, the Assistant Secretary disallowed the field trip expenses because California had not provided information that the field trips were designed to meet the special educational needs of educationally deprived children. The Assistant Secretary affirmed the findings of the Department's auditors, which were based on two District forms: one indicating the trip destination, and the other providing four lines for the teacher to indicate the trip's educational benefit. The auditors did not consider any needs assessment documents which identify the special needs of Title I students on which Title I monies should be focused. See 45 C.F.R. Sec. 116a.21 (1980); 34 C.F.R. Sec. 201.100, .102, .104 (1981); H.R. No. 95-1137, 95th Cong., 2d Sess. 23-24 (1978), reprinted in 1978 United States Code Cong. & Admin.News 4971, 4993-94. 32 The prohibition on using Title I funds to satisfy the general needs of a class, grade or school does not prohibit California from identifying as special those educational needs that Title I and non-Title I children share. Title I students differ from students generally because they come from low-income families and have been identified by the District as those most in need of supplemental educational assistance. See 20 U.S.C. Secs. 2701, 2732(a)(1), 2733, 2734(b); 34 C.F.R. Secs. 201.70, .100-.105 (1981). As the Secretary admitted at oral argument, Title I children suffer from no unique educational handicap. 33 The Secretary's decision applied a definition of special educational need to the field trip expenditures that conflicts with the purpose and wording of Title I and other Department regulations. The Secretary's decision required California to show that the special educational needs of its Title I students were not shared by other students. This interpretation is inconsistent with the flexibility that Title I and the regulations offer local educational agencies such as the District to define special educational needs. See 20 U.S.C. Secs. 2733(a), 2734(b); 34 C.F.R. Sec. 201.70, .100-.105 (1981); see also Bennett v. New Jersey, 470 U.S. 632, 635, 105 S.Ct. 1555, 1557, 84 L.Ed.2d 572 (1985) (Congress left to local officials the development of particular programs to meet the needs of educationally disadvantaged children.); H.Rep. No. 95-1137, 95th Cong., 2d Sess. 4 (1978) (one of the essential features of Title I is its flexibility at the local level), reprinted in 1978 United States Code Cong. & Admin.News 4971, 4974. His interpretation is also inconsistent with the language of the regulations on which he relies. We therefore do not extend the normal deference to the Secretary's interpretation, see McCoog v. Hegstrom, 690 F.2d 1280, 1284 (9th Cir.1982), and conclude that the Secretary's interpretation provides no support for the showing of good cause that he must make in order to set aside the Board's decision. 34 For the foregoing reasons we conclude that the Secretary did not show good cause in setting aside the Board's decision which allowed California's expenditure of Title I funds for the field trips.