Opinion ID: 711196
Heading Depth: 4
Heading Rank: 1

Heading: Accounting Abstract

Text: 25 The OIG's final audit determination was dated August 5, 1988. CSU filed its request for administrative review of the final audit on September 21, 1988. CSU's accounting abstract was submitted on December 30, 1988. The ALJ took the abstract into consideration in determining that the final audit was incorrect. The ALJ found that the section 668.116(e)(1)(ii), forty-five day time restriction for submitting evidence did not apply to the accounting abstract. The ALJ reasoned that the accounting abstract was based on records previously available to the Department, and therefore the abstract was not an underlying work paper, record, or material under 34 C.F.R. 668.116(e)(1)(ii). Reversing the ALJ's decision, the Secretary held that the abstract was submitted beyond the forty-five day time restriction, and thus the ALJ's consideration of the abstract was improper. 26 Under the authority of 20 U.S.C. Sec. 1094, the Secretary has promulgated regulations governing the institutions participating in the various federal programs for financial assistance for students, including the Pell Grant Program. As a condition of participation in the Pell Grant Program, the institutions must comply with the regulation which includes submitting to audits. 34 C.F.R. Sec. 668.12(a). Further, the regulations set forth the procedural requirements for appealing a final audit determination. Section 668.113 of the regulation states in relevant part: 27 (a) An institution seeking the Secretary's review of a final audit determination ... shall file a written request for review with the designated [Education Department] official.... 28 (b) The institution shall file its request for review and any records or material admissible under the terms of Secs. 668.116(e) and (f) of this subpart, no later than 45 days from the date it receives the final audit determination.... 29 34 C.F.R. Sec. 668.113 (1989). Section 668.116(e) provides: 30 (1) A party may submit as evidence to the administrative law judge only materials within one or more of the following categories: 31 (i) [Education Department] audit reports and audit work papers for audits performed by the United States Education Department Office of Inspector General. 32 (ii) Institutional audit work papers, records, and other materials, if the institution provide[s] those work papers, records, or materials to [the Education Department] no later than the date by which it was required to file its request for review in accordance with Sec. 668.113. 33 34 C.F.R. Sec. 668.116 (1989). 34 It is important to note that the term used by the ALJ, underlying work paper, is not a term found in the regulations. The regulations only refer to institutional audit work papers. The ALJ's interjection of the modifier, underlying, changes the meaning of the words, audit work papers. According to the ALJ, the abstract was admissible because it was merely a summary of the information in the records and materials previously available to the agency, and not new information. However, nowhere in sections 668.116 or 668.113 of the regulations does it state, or imply, that the time limits for submitting institutional audit papers to agency officials reviewing the final audit apply only to documents or records that were not previously available to the auditors. 35 The regulations set forth guidelines for institutions seeking review of final audits. As stated above, an agency's interpretation of its own regulations is given deference. Thomas Jefferson Univ. v. Shalala, --- U.S. ----, ----, 114 S.Ct. 2381, 2386, 129 L.Ed.2d 405 (1994). We defer to the Secretary's interpretation unless an 'alternative reading is compelled by the regulation's plain language or by other indications of the Secretary's intent at the time of the regulation's promulgation.'  Id. at ---- - ----, 114 S.Ct. at 2386-87, quoting Gardebring v. Jenkins, 485 U.S. 415, 430, 108 S.Ct. 1306, 1314, 99 L.Ed.2d 515 (1988). The Secretary rejected the ALJ's determination and found that the abstract was an institutional audit work paper and that it was not timely submitted under the regulations. We agree. The Secretary's interpretation of section 668.113 of the regulations was not arbitrary, capricious, or an abuse of discretion, and therefore, the untimely accounting abstract should have been disregarded. 36