APPEAL FROM THE DECISION OF THE UNITED STATES DEPARTMENT OF EDUCATION
(No. 93-136-R) (No. 93-44-R)
Before the ALJ, Pennsylvania presented evidence, consisting of nineteen exhibits including affidavits, and legal arguments in seeking to establish that it had complied with the maintenance of effort requirement for FY's 1989 and 1991. Pennsylvania's theory was that the CJT costs should not have been included in the calculations as state funds spent on vocational education because: (1) it was within the sole discretion of the state to determine whether the CJT program was a vocational education program for the purposes of determining its maintenance of effort; and (2) the CJT program did not fall under the definition of "vocational education" as set forth in the Perkins Act. 20 U.S.C. Section(s) 2471(31).
The Commonwealth of Pennsylvania's Department of Eduction ("PDE") appeals from a final decision of the United States Secretary of Education requiring Pennsylvania to refund $3,082,088.95 to the United States. PDE argues that the Secretary erred in denying PDE an evidentiary hearing, and that the Secretary's decision violates Pennsylvania's sovereign right to interpret its own statutes. For the following reasons, we will affirm the decision of the Secretary.
The underlying facts of this case involve the interplay between federal and state programs which fund vocational education, and the requirements states must meet in order to receive federal funding. Under the Perkins Vocational Education Act, 20 U.S.C. Section(s) 2301-2471 (1988) ("Perkins Act"), federal grants are issued to the states to "assist the States to expand, improve, modernize, and develop quality vocational education programs in order to meet the needs of the Nation's existing and future work force for marketable skills and to improve productivity and promote economic growth." 20 U.S.C. Section(s) 2301(1). The Perkins Act defines vocational education as:
organized educational programs which are directly related to the preparation of individuals in paid or unpaid employment in such fields as agriculture, business occupations, home economics, health occupations, marketing and distributive occupations, technical and emerging occupations, modern industrial and agriculture arts, and trades and industrial occupations, or for additional preparation for a career in such fields, and in other occupations, requiring other than a baccalaureate or advanced degree and vocational student organization activities as an integral part of the program; and for purposes of this paragraph, the term "organized education program" means only (A) instruction (including career guidance and counseling) related to the occupation or occupations for which the students are in training or instruction necessary for students to benefit from such training, and (B) the acquisition (including leasing), maintenance, and repair of instructional equipment, supplies, and teaching aids; but the terms do not mean the construction, acquisition, or initial equipment of buildings, or the acquisition or rental of land.
20 U.S.C. Section(s) 2471(31) (emphasis added).
Funding under the Perkins Act, however, is contingent upon the state maintaining or exceeding its own level of financial support for these programs. According to the Act:
No payments shall be made under this chapter for any fiscal year to a State unless the Secretary determines that the fiscal effort per student or the aggregate expenditures of such State for vocational education for the fiscal year preceding the fiscal year for which the determination is made, equaled or exceeded such effort or expenditures for vocational education for the second preceding year.
20 U.S.C. Section(s) 2463(a). This requirement is reflected in the Act's implementing regulations which provide that:
[t]he Secretary may not make a payment under the Act to a State for any fiscal year unless the Secretary determines that the fiscal effort per student, or the aggregate expenditures of that State, from State sources, for vocational education for the fiscal year (or program year) preceding the fiscal year (or program year) for which the determination is made, at least equaled its ...