Community Action Program Committee, Inc., DAB No. 450 (1983)

GAB Decision 450
Docket No. 83-26

July 19, 1983

Community Action Program Committee, Inc.;
Ford, Ceilia; Garrett, Donald Teitz, Alexander


Community Action Program Committee, Inc. (CAPC), of Pensacola,
Florida, appealed a decision of the Office of Human Development Services
(OHDS, Agency) dated January 19, 1983 disallowing $19,125 reported by
CAPC as costs under a Head Start grant from OHDS for the CAPC program
year ended November 30, 1981. The Agency disallowed $8,769 of costs as
unallowable penalties and interest on delinquent payment of payroll
taxes, citing 45 CFR Part 74 generally. The Agency disallowed costs of
$10,356 claimed as fringe benefits for lack of documentation required by
45 CFR 74.61(g).

CAPC did not dispute the basis for disallowance of each item but
claimed that Internal Revenue Service (IRS) records would show that at
least part of the costs claimed were proper payroll expenditures. CAPC
later furnished the Agency and the Board with a letter from an
accounting firm stating that IRS records showed that $3,785 of the total
of $19,125 disallowed had in fact been paid for allowable payroll taxes,
rather than penalties and interest. The Agency agreed to accept this
verification, first by telephone conference and then by confirming
letter.

Accordingly, the disallowance is affirmed in the amount of $15,340
and reversed in the amount of $3,785.

JULY 07, 1984