UNITED STATES DEPARTMENT OF EDUCATION
WASHINGTON, D.C. 20202
In the Matter of Docket No. 96-63-SP
UNIVERSITY OF TEXAS AT TYLER, Student Financial
Respondent. PRCN: 95106009
The University of Texas at Tyler (UTT) participates in the various student financial assistance programs authorized under Title IV of the Higher Education Act of 1965, as amended (HEA). 20 U.S.C. § 1070 et seq. and 42 U.S.C. § 2751 et seq. These programs are administered by the office of Student Financial Assistance Programs (SFAP), U.S. Department of Education (ED). On March 29, 1996, SFAP issued a Final Program Review Determination (FPRD) in which it sought the return of $294,187 in federal funds. The FPRD is based upon the program review report for the 1991-92 and 1992-93 award years. UTT filed a request for review on May 10, 1996. Both parties filed submissions to this tribunal in response to the Order Governing Proceedings.See footnote 11
SFAP contends that UTT initially provided SFAP with incorrect information on its applications for Campus-Based awards.See footnote 22 After the school provided the correct information, SFAP's recalculation revealed that the school improperly received $293,095 of Campus-Based program funds as a result of its submission of incorrect information.
UTT responds that it should not be liable to repay the $293,095 because it cannot
ascertain the formula used by SFAP to calculate this amount; because the school did not misuse
those funds and no individual overawards occurred; and because there has been no allegation or
showing of wrongful intent by the school.See footnote 33
Under 34 C.F.R. § 668.116(d), UTT has the burden of proving that the expenditures
questioned in the FPRD were proper and that the school complied with program requirements by
presenting a prima facie case. Here, SFAP has alleged that UTT provided incorrect information
on its FISAP. Furthermore, UTT admitted to that fact and provided corrected information.
Finally, SFAP has submitted various documents to support its recalculation of UTT's awards.
Ex. ED-4 through ED-8. Specifically, the calculations contained in Appendix B of the FPRD are
documented at Ex. ED-7 and ED-8. Therefore, I find that SFAP has established a prima facie case.
Once SFAP has established a prima facie case, the burden then falls upon the institution
to prove that the expenditures questioned in the FPRD were proper and that the school complied
with program requirements. Here, UTT raises several arguments. First, the school questions the
accuracy of SFAP's calculation of $293,095 on the basis that SFAP was unable to provide UTT
with the complete formula that it uses to calculate Title IV program funding for institutions.
Other than to question the accuracy of SFAP's numbers, however, UTT has not provided any
other data or calculations to refute the recalculation performed by SFAP or to otherwise
document that the school's questioned expenditures were proper. The school states that it
attempted to reconstruct the eligible aid applicant grids at issue and ascertain the effects of the
inaccurate information contained in its original FISAPs, but that it was unable to calculate the
exact monetary impact. This effort is insufficient to satisfy the school's burden of persuasion
under 34 C.F.R. § 668.116(d). In In re Phillips Colleges, Inc., Dkt. No. 93-39-SP, U.S. Dep't of
Educ. (May 16, 1994), this tribunal stated:
UTT also contends that it did not misuse the funds and that no overawards occurred. As
SFAP correctly notes, however, it is well-settled that a school misuses Campus-Based program
funds when it receives them as a result of providing incorrect FISAP income grid information. In
re Macomb Community College, Dkt. No. 91-80-SP, U.S. Dep't of Educ. (May 5, 1993) at 7-8;
In re Phillips Colleges, Inc., Dkt. No. 93-39-SP, U.S. Dep't of Educ. (May 16, 1994) at 4; In re
Phillips Colleges, Inc., Dkt. No. 94-4-SP, U.S. Dep't of Educ. (Nov. 2, 1994) at 3. In addition,
since UTT failed to provide any data or calculations to refute the recalculation performed by
SFAP or to otherwise document that the school's questioned expenditures were proper, it has
failed to prove its claim that no overawards occurred.
Finally, UTT alleges that there has been no allegation or showing of wrongful intent by
UTT. SFAP is not required to allege or show wrongful intent in order to recover funds under a
FPRD. If the FPRD finds that the institution did not properly document its expenditures and the
institution cannot prove that its expenditures were proper, SFAP is entitled to recovery of the
undocumented funds, regardless of whether the institution had any wrongful intent.
In conclusion, UTT has failed to satisfy its burden of persuasion under
34 C.F.R. § 668.116(d) to show that its expenditures were proper. Therefore, I find that UTT must refund the $293,095 in questioned funds to the U.S. Department of Education.
Judge Richard F. O'Hair
Dated: January 28, 1997
A copy of the attached document was sent to the following:
Hannah D. Huckaby, Esq.
Office of General Counsel
The University of Texas System
201 West Seventh Street
Austin, TX 78701-2981
Stephen M. Kraut, Esq.
Office of the General Counsel
U.S. Department of Education
600 Independence Avenue, S.W.
Washington, D.C. 20202-2110