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Illinois Migrant Council Inc. v. United States Department of Labor

September 20, 1985


Petition for Review of Final Decision of the Secretary of Labor United States Department of Labor.

Author: Bauer

Before BAUER, ESCHBACH, Circuit Judges, and PELL, Senior Judge.

BAUER, Circuit Judge.

This case is before us on a petition for review of a final decision of the Secretary of Labor. A Department of Labor Grant Officer disallowed $12,487 in CETA program costs incurred by the petitioner, the Illinois Migrant Council, Inc. An administrative law judge affirmed the Grant Officer's decision. Petitioner appeals, contending that the Grant Officer's decision is invalid and his order for repayment of the disallowed costs is unenforceable. We reject petitioner's arguments and affirm the decision of the administrative law judge.*fn1


The Illinois Migrant Council, Inc. (IMC) is a private not-for-profit organization which serves migrant and seasonal farm workers in Illinois. IMC has administered federal programs in Illinois since 1966. This appeal concerns a Department of Labor grant to IMC under the Comprehensive Employment and Training Act, 29 U.S.C. 801 et seq. (Supp. V 1981) (repealed 1982) (CETA), covering the period from January 1, 1975 through December 31, 1975.

After the grant was completed, the Department of Labor authorized an audit of the funds expended under the grant. In February 1976, the public accounting firm conducting the audit sent its final audit report to a Department of Labor Grant Officer. On August 5, 1980, the Grant Officer issued a final determination notifying IMC that $12,487 of its costs for administering the CETA program has been disallowed. The Grant Officer's decision was based on the audit report, which revealed that IMC had exceeded the statutory 20 percent limitation on expenditures for administrative costs by 1.7 percent, or $12,487, without the Grant Officer's prior approval.

Shortly after IMC received notification of the Grant Officer's disallowance, IMC telephoned the Department of Labor several times to discuss the Grant Officer's determination. During these conversations, IMC alleges that the Department of Labor offered to allow IMC to repay the disallowance though "in kind" payments, such as additional program services, rather than through a direct cash payment in exchange for IMC's agreement that it would not appeal the Grant Officer's decision. IMC agreed to the Department of Labor's proposal.

Consequently, IMC submitted a number of proposals for repayment to the Department of Labor. No Grant Officer, however, acted on any of these proposals. On March 30, 1983, IMC notified the Department of Labor that it had negotiated a $11,110 rent reduction with the landlord of a building leased by IMC, and inquired whether this would suffice as an "in kind" payment. On August 17, 1983, the Department of Labor notified IMC that it would not accept any "in kind" payment of the disallowance. IMC then filed an appeal with the Office of Administrative Law Judges.

On January 26, 1984 the Grant Officer moved to dismiss IMC's appeal on the ground that the Office of Administrative Law Judges had no jurisdiction to hear an appeal concerning the Department of Labor's denial of a proposed method for repaying an established debt. The Grant Officer further contended that if IMC was appealing his determination disallowing the $12,487 in administrative costs, the claim should be dismissed as untimely. On March 19, 1984, IMC filed a cross-motion to dismiss, arguing that the disallowance was invalid because it was not made within 120 days after the Grant Officer received the final audit report, thereby violating Section 106 of CETA, 29 U.S.C. 816(b) (1978). IMC further argued that its appeal should not be dismissed as untimely because it had good cause for exceeding the ten day limit in which appeals must be filed.

The administrative law judge held that the 120 day period set forth in Section 106(b) was not jurisdictional, and that therefore the Grant Officer was not precluded from making his final determination of a disallowance after that time period expired. The ALJ further held that the ten day limitation for the filing of appeals also was not jurisdictional, but that IMC did not show good cause for exceeding that time period. Finally, the ALJ held that the method of repayment requested by the Department of Labor was reasonable and that the Grant Officer did not abuse his discretion in imposing that sanction, and thus a hearing on the propriety of the method of repayment was not necessary. Therefore, the ALJ dismissed IMC's appeal.


IMC argues that the ALJ was incorrect in holding that the 120 day time limit imposed by Section 106(b) of CETA, 29 U.S.C. 816(b) (1978), is not jurisdictional. IMC contends that if a Grant Officer does not issue a final determination within that time period, the Department of Labor is divested of jurisdiction over that case. This court recently held, however, that a "Grant Officer's failure to comply with the 120-day deadline of 106(b) [will] not divest the DOL of jurisdiction. . . ." Milwaukee County, Wisconsin v. Brock, 771 F.2d 983 slip op. at 14 (7th Cir. 1985). Accord St. Regis Mohawk Tribe, New York v. Brock, 769 F.2d 37 slip op. at 17 (2d Cir. 1985). But see City of Edmonds v. United States Department of Labor, 749 F.2d 1419 (9th Cir. 1984) (Section 106(b) is jurisdictional constraint); Lehigh Valley Manpower Program v. Donovan, 718 F.2d 99 (3d Cir. 1983) (same). We will not reiterate, but simply adopt, the thorough and cogent analysis of this issue contained in Milwaukee County. See Milwaukee County, slip op. at 3-14. See also St. Regis Mohawk Tribe, slip op. at 5-18. Therefore, we reject IMC's claim that the 120 day time limit contained in Section 106(b) is jurisdictional.

IMC argues that even if the 120 day time limit contained in Section 106(b) is not jurisdictional, "the Grant Officer's four and one-half year delay in issuing a final determination . . . so prejudiced IMC that the ALJ should have held that the final determination was unenforceable." Petitioner's br. at 26. IMC alleges that this passage of time prejudiced its ability to contest the disallowance because significant witnesses and documents are now unavailable. IMC also argues that it was prejudiced by the Grant Officer's failure to produce the administrative file before the ALJ's review of this case. Although these arguments may have had some merit in September 1980, IMC did not contest the disallowance at that time, but waited another three years after the final determination ...

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