Opinion ID: 467580
Heading Depth: 2
Heading Rank: 4

Heading: Merit Staffing Violations.

Text: 26 The City asserts that the Secretary erred in disallowing costs due to the City's violation of Merit Staffing Principles. The City contends that a 1979 audit referred only to the apparent circumvention of Merit Staffing Principles, and that genuine confusion existed as to whether the City's practices, in fact, violated these principles. Further, the City submits that because a later audit, dated December 15, 1980, stated that only future violations of this sort would result in disallowances, the Department should be barred from disallowing these costs. 27 29 C.F.R. Sec. 98.14 provides in part that [e]ach prime sponsor    shall assure that it will maintain personnel policies and practices for its employees in accord with state and local laws and regulations that adequately reflect the merit principles declared in the Intergovernmental Personnel Act (IPA) of 1970 (Pub.L. 91-648). This regulation has been in effect and unchanged since May of 1975. See 40 Fed.Reg. 22712. The record demonstrates that although the City may have been confused initially, the Department advised the City of this violation and recommended an end to these practices in 1977. The record also shows that the Department never approved the City's violation of Merit Staffing Principles. In late 1978, the City took steps to rectify the alleged violations. In light of the clear language of the regulation and the facts of this case, we believe that the Secretary properly disallowed these costs. 28