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B-217215 1 (1986-03-20)

handle is hein.gao/gaobadmfq0001 and id is 1 raw text is: OECISION FILE: B-217215 THE COMPTROLLER GENERAL OP THE UNITED STATES WASHINQTON, 0. C. 20548 DATE: Al , on 104 L1-4.v .; .0 MATTER OF: State of Oklahoma--Liability for Interest on Debt DIGEST: The State of Oklahoma is liable for interest on debts owed under the Elementary and Secondary Education Act where the United States Department of Education made written demand upon the State for payment of the debt and advised State that interest would be charged. The State argued that it was not liable for interest because the Department failed to give adequate notice of its intent to assess interest and had not issued final regulations governing the collection of interest. The Department substantially complied with then-existing notice provisions of the Federal Claims Collection Standards. In addition, the Department's failure to publish final regulations on its policy for assessing interest does not relieve Oklahoma of its interest liability because the State had actual notice of the interest policy. The Oklahoma State Department of Education (Oklahoma) requested our opinion on whether it is liable for interest demanded by the United States Department of Education (the Department) on debts owed under titles I and IV of the Elemen- tary and Secondary Education Act (Act).1/ For the reasons stated below, we conclude that Oklahoma is liable for the interest. BACKGROUND The Department is demanding interest on two separate debts. One debt represents an audit disallowance under title I of the Act of $514,675 which was subsequently sustained by the Education Appeal Board (EAB). The other debt represents a title IV audit disallowance of $3,358.90. Oklahoma has paid the principal amount of both debts. It has also paid the interest on the title IV debt under protest. I/ Oklahoma requested our decision with the understanding that it would retain, either before or after the issuance of our decision, whatever recourse to the courts it would otherwise have had. In subsequent correspondence, Oklahoma asked us to confirm this understanding. The State is correct.

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