《DEPARTMENTAL APPEALS BOARD》.pdfVIP

Department of Health and Human Services DEPARTMENTAL APPEALS BOARD Appellate Division SUBJECT: Arlington Community Action DATE: January 2, 2008 Program, Inc. Docket No. A-07-87 Decision No. 2141 DECISION Arlington Community Action Program, Inc. (ACAP), a Head Start grantee in Arlington County, Virginia, appeals a determination by the Administration for Children and Families (ACF) disallowing a total of $520,036 that ACAP charged to its Head Start grant for the fiscal year ending (FYE) June 30, 2005. ACF disallowed the funds on the grounds that ACAP either spent them on costs that are not allowable charges to federal Head Start funds under the applicable cost principles or failed to provide adequate documentation demonstrating that they were allowable charges. On appeal, ACAP states that it contests the disallowance but that it is no longer in business and has no employees or sufficient funds to engage personnel to review its records and respond to the disallowance. ACAP therefore seeks equitable relief from the disallowance and requests that the disallowed amount be deemed uncollectible. As explained below, we sustain the disallowance. Applicable law, regulations, and policies Cost principles applicable to Head Start grantees such as ACAP provide that, in order for a grantee’s costs to be allowable charges to federal grant funds, the costs must be reasonable for the performance of the grant award and allocable thereto.1 1 Head Start is a national program providing comprehensive developmental services, including health, nutritional, educational, social and other services, to economically disadvantaged preschool children and their families. 42 U.S.C. § 9831. The Department of Health and Human Services (HHS), through ACF, provides funds t