UNITED STATES DEPARTMENT OF EDUCATION
WASHINGTON, D.C. 20202
In the Matter of Docket No. 95-76-SP
CONCORDE CAREER INSTITUTE, Student Financial Assistance Proceeding
____________________________________ PCRN: 93409044
Appearances: David H. Larry, Esq., Manatt, Phelps & Phillips, Washington, D.C., for Concorde Career Institute
Steven Z. Finley, Esq., Office of the General Counsel, United States Department
of Education, Washington, D.C., for Student Financial Assistance Programs.
Before: Edward J. Kuhlmann, Administrative Law Judge
SFAP found in finding # 11 that the Respondent held excess cash in its Federal EDPMS
account during the 1990/91, 1991/92, and 1992/93 award years. SFAP stated that when an
institution maintains excess funds, this causes the Federal Government to pay excess interest on
these funds. Therefore, it concluded that Respondent is liable for the cost incurred by the Federal
Government on the excess cash outlays. SFAP determined that Respondent owed $297.00.
Respondent argues that SFAP lacks legal authority to recover interest costs for excess
cash balances maintained in the institution's federal account. That issue has been repeatedly
decided to the contrary. In the Matter of Phillips Colleges, Inc., Docket No. 92-64-SA, U.S. Dep't of Educ., Initial Decision (Aug. 24, 1994), Final Decision (May 25, 1995), Motion to
Reconsider Denied (Jul. 13, 1995); In the Matter of International Career Institute, Docket No. 92-144-SP, U.S. Dep't of Educ., Initial Decision (Jul. 7, 1994), Final Decision (May 15, 1995); In the Matter of New York Business School, Docket No. 93-81-SP, U.S. Dep't of Educ., Initial Decision (Jul. 22, 1994); and In the Matter of Puerto Rico Technology and Beauty College, Docket No. 92-73-SA, U.S. Dep't of Educ., Initial Decision (Aug. 31, 1992), Final Decision
(Oct. 9, 1992). Respondent raises no new legal arguments about the Department's authority
which would warrant a result different from that reached in the previously decided cases. In
addition, Respondent and SFAP agree that the issue is moot since Respondent has demonstrated
in its brief that it has returned interest earnings on its federal bank account for the period covered
in the FPRD in an amount greater than the $297 liability asserted in the FPRD. SFAP points out
that the "repayments are consistent with the institution's fiduciary obligations to compensate the
government for interest costs associated with making such funds available, and satisfy the liability
sought in the FPRD." The legal issue presented by Respondent is therefore moot since SFAP has
determined that Respondent has no further liability.
Respondent was assessed $6,550.00 in "informal" fines. SFAP explained in the FPRD that
such fines are not subject to the formal appeal process outlined in the appeals information section
for liabilities. SFAP states in the FPRD that "[t]he institution is not obligated to pay this fine."
Nevertheless, Respondent seeks a determination on the legality of "informal" fines. This office
has repeatedly held that the issue of informal fines is not included within its appeal authority. In the Matter of Indiana Barber/Stylist College, Docket No. 94-111-SP, U.S. Dep't of Educ., Initial Decision (Mar. 23, 1995) at 7, Final Decision (Aug. 25, 1995); In the Matter of Kane Business Institute, Docket No. 94-70-SP, U.S. Dep't of Educ., Initial Decision (Oct. 21, 1994), at 2 n.2, Final Decision (Nov. 30, 1994). Therefore, it would be inappropriate to rule on Respondent's
legal questions regarding "informal" fines since such matters are outside the scope of this
2. Respondent's request to determine the legality of the "informal" fines assessed by SFAP
is not within the scope of authority of this proceeding and therefore the request is denied.
Edward J. Kuhlmann
Administrative Law Judge
Dated: May 28, 1996
A copy of the attached initial decision was sent by certified mail, return receipt requested to the
David H. Larry, Esq.,
Manatt, Phelps & Phillips
1501 M Street, N.W.
Washington, D.C. 20005
Steven Z. Finley, Esq.
Office of the General Counsel
U.S. Department of Education
600 Independence Avenue, S.W.
Washington, D.C. 20202-2110