Department of Education, State of Hawaii v. Terrel Bell, Secretary of Education, United States Department of Education

The Education Appeals Board (“EAB”) found Hawaii violated provisions of Title I of the Elementary and Secondary Education Act of 1965, Pub.L. 89-10, 79 Stat. 27, as amended, 20 U.S.C. § 2701 et seq. (1976 Supp. V) (“Title I”). The Secretary of Education (“Secretary”) demanded that Hawaii repay the Department of Education $2,109,618. Hawaii appeals from the EAB decision, claiming the Secretary misinterpreted and misapplied Title I provisions in determining the validity of the audit conducted by the Health Education and Welfare Audit Agency (“Audit Agency”). We affirm.

FACTS AND PROCEEDINGS BELOW

I. Procedural Background.

The state of Hawaii received federal funding pursuant to Title I of the Elementary and Secondary Education Act of 1965. In accordance with Title I, the federal government’s Audit Agency conducted two audits. The Audit Agency issued Final Determination letters on December 2, 1977 and April 9, 1979, finding Hawaii had violated Title I provisions. Based on those findings, the Department of Education sought recovery from Hawaii of $2,109,618. Hawaii petitioned the EAB regarding both audits. The EAB heard the appeals simultaneously and affirmed both audits in…