IN THE MATTER OF BNOS JERUSALEM RABBINICAL SEMINARY,
Docket No. 93-99-SP
Student Financial Assistance Proceeding
ORDER RE ED'S MOTION TO AMEND THE
FINAL PROGRAM REVIEW DETERMINATION
On October 5, 1993, some two days before the due date of its
brief and supporting evidence, the Office of Student Financial
Assistance Programs (ED) filed a motion for an order requesting
permission to amend the final program review determination issued
in this case. Due to ED's approaching deadline, it was necessary
for the tribunal to suspend the proceeding in order to obtain the
views of Bnos Jerusalem Rabbinical Seminary (Bnos). Bnos
responded on October 20, 1993, and agreed to the amendment
concept providing the amended final program review determination
was used solely to clarify the existing charge that Bnos had
caused its students to utilize its address rather than the
students' addresses for purposes of receiving the student aid
reports. Bnos objected to the possible utilization of this
approach as a means to create a new set of adverse findings or to
establish a new set of deadlines for the admission of evidence.
ED filed a reply on November 1, 1993.
Upon review of the submissions, the tribunal requested ED to
submit a draft of the revised final program review determination
to Bnos to assist the parties in formulating a proposal agreeable
to the parties. The draft was reviewed by Bnos and, thereafter,
the parties failed to resolve this matter. Thus, the motion to
amend is presently before the tribunal.
In In re Missouri Valley College, U.S. Dep't of Education, Dkt. No. 92-71-SP (Order of Nov. 13,
1992), the tribunal held that it
had the discretion whether to grant a request by ED for a
dismissal without prejudice where ED intended to reissue the
final audit determination. The analysis in Missouri Valley is equally applicable in the instant
case where ED's request is one
to amend a final program review determination--
The next matter for resolution is whether OSFA may obtain a dismissal without prejudice from the administrative law judge in order to reissue a final audit determination. This is a matter normally within the sound discretion of the
tribunal. United States v. Gunc, 435 F.2d 465, 467 (8th Cir. 1970); Millsap ex rel. Millsap v.
Jane Lamb Memorial Hosp., 111 F.R.D. 481, 483 (S.D. Iowa 1986); 9 Charles A. Wright
& Arthur R. Miller, Federal Practice and Procedure § 2364, at 161 (1971).
There are, however, several overriding factors which
distinguish these administrative proceedings from judicial
proceedings. Under 20 U.S.C. § 1094(b)(2) (1990), Congress
provided, in effect, that the hearing shall take place not
later than 150 days after the Secretary receives the
institution's request for review of the final audit
determination. Thus, Congress sought a quick resolution of
these matters--an objective which would thwarted under
In addition, the regulations governing this proceeding also
provide restrictive limitations regarding the submission of
evidence. 34 C.F.R. §§ 668.116(e) and (f). The reissuance of the final audit
determination would allow OSFA to
circumvent the regulations by granting it another
opportunity to submit evidence as well as to add other
matters.[footnoted omitted] Thus, the nature of the
statutory and regulatory schemes contemplates that initial
audits are final and re-audits are discouraged.
This finality of the audit rationale has been adopted by
Congress for other governmental agencies. For example, the
Internal Revenue Code dictates that once a deficiency
letter--which is akin to a final audit or program
determination--is issued to a taxpayer, further deficiency
letters are restricted. 26 U.S.C. § 6212(c)(1) (1989)
[i]f the Secretary has mailed to the
taxpayer a notice
of deficiency . . . and the taxpayer files a petition
with the Tax Court within the time prescribed in
Section 6213(a), the Secretary shall have no right to
determine any additional deficiency . . . .
This provision was originally adopted in 1926 and is based
on the principle that--
[f]inality is the end sought to be
attained by these
provisions of the bill, and the committee is convinced
that to allow the reopening of the question of the tax
for the year involved either by the taxpayer or by the
commissioner (save in the sole case of fraud) would be
S. Rep. No. 52, 69th Cong., 1st Sess. 26 (1926).
In McCue v. Commissioner, 1 T.C. 986, 987 (1943), the Tax Court
interpreted this Congressional directive and stated--
[i]f later the Commissioner becomes
convinced that the
deficiency has been determined in too small or too
large an amount or if he deems the grounds relied upon
and set forth by him in his notice of deficiency
erroneous or inadequate, his only remedy is to endeavor
to straighten out those matters in the proceeding
before this Court.
The Tax Court ultimately held that the Commissioner had no
right to mail a second notice and was not entitled to the
advantages which would accrue to him if his second letter
had been a statutory notice. Id. at 988. See also Stamm Int'l Corp. v. Commissioner, 84 T.C.
248, 252 (1985) (the Commissioner had no right to send the taxpayer a second
notice for the same taxable year and tax liability); Harvey Coal Corp. v. Commissioner, 12 T.C.
596, 603 (1949) (same). The rationale under the tax system applies with equal force
to the Federal student financial assistance programs and
supports the denial of OSFA's motion to dismiss.
Id. at 3-5.
Thus, amending the final program review determination appears
contrary to the statutory and regulatory schemes and the doctrine
ED urges that, in the absence of the proposed revisions to the
final program review determination, it would be impossible for
the hearing official to consider all of the material facts
necessary to render a just and proper decision. ED acknowledges
that it had the materials in its possession prior to the issuance
of the final program review determination. ED fails, however, to
disclose any meaningful explanation as to why this material was
not considered, included, or reflected in the final program
review determination which would justify overriding the statutory
and regulatory schemes and the doctrine of finality. Under the
present circumstances, amending the final program review
determination would encourage the production of deficient and
substandard final program review determinations, a matter which
the Department cannot condone.See footnote 1
Accordingly, ED's motion to amend the final program review determination is denied. In addition, the parties shall file
1. ED's brief and supporting evidence is due on or before
December 17, 1993.
2. Bnos's brief and supporting evidence is due on or before
January 11, 1994.
3. ED's reply brief is due on or before January 25, 1994.
Allan C. Lewis
Administrative Law Judge
Issued: December 1, 1993