*1 BELL, SECRETARY OF EDUCATION
NEW JERSEY et al. No. 81-2125. Argued April 18, 1983 Decided May 31, 1983 *2 J., White, Court. a unanimous for J., opinion O’Connor, delivered 793. opinion, post, p. concurring filed peti- for argued cause Getter General Deputy Solicitor Lee, General Solicitor were the briefs on him With tioner. Shapiro, S. Harriet McGrath, Attorney General Assistant M. Chalker. and Ranter, Susan William argued the Attorney General, Deputy Hunting, Margaret Pennsylvania. With respondent Commonwealth for cause Attorney Gen- Zimmerman, LeRoy were brief her on Assistant Cole, R. Michael Trexel. Emogene eral, respondent State argued cause Attorney General, I. Irwin were brief him on Jersey. With of New Burgess, Assist- Mary Ann Attorney General, Kimmelman, Attorney ant Jay General, and nee La Regina Vecchia and Murray Mahoney, Deputy Attorneys General.* Justice O’Connor delivered the opinion of the Court. In this case we rights consider both the of the Federal Gov- ernment when a State misuses funds part advanced as of a grant-in-aid federal program under Title I Elementary Secondary Education Act and the manner in which may Government rights. assert those We hold that the Federal may Government recover misused funds, that the Department of may Education determine administratively the amount of the debt, and that may the State judicial seek agency’s review the determination. *3 rH respondents, The Jersey New Pennsylvania, and received
grants from the Federal Government under Title I of the Ele- * RichardC. Dinkelspiel, William L. Robinson, Beatrice Rosenberg, and Norman J. Chachkin filed a brief for the Lawyers’ Committee for Civil Rights Under Law as amicus curiae urging reversal. Briefs of amici curiae urging affirmancewere filedfor the of Mary- State
land et al. Stephen H. Sachs, Attorney General of Maryland, Paul F. Strain, Deputy Attorney General, Diana G. Motz and Ellen Heller, M. Assistant Attorneys General, and E. Stephen Derby; A. Allain, William Attorney General of Mississippi; Gerald Baliles, L. Attorney General of Virginia; Paul G. Bardacke, Attorney General of New Mexico;Francis X. Bellotti, Attorney General of Massachusetts; Steven L. Beshear, Attorney General of Kentucky; Chauncey H. Browning, Attorney General of West Virginia; Paul L. Douglas, Attorney General of Nebraska; John J. Eas- ton, Jr., Attorney General of Vermont; L. Edmisten, Attorney Gen- Rufus eral of North Carolina; Dave Frohnmayer, Attorney General of Oregon; Griffin; M. Thomas Neil F. Hartigan, Attorney General of Illinois; Tany S. Hong, Attorney General of Hawaii; Mattox, James Attorney General of Texas; McKay, Brian Attorney General of Nevada; Thomas Miller, J. Attorney General Iowa; Charles M. Oberly III, Attorney General of Delaware; Linley E. Pearson, Attorney General of Indiana; Sheldon Steinbach; Elliott James E. Tierney, Attorney of Maine; General Michael C. Turpén, Attorney General Oklahoma; and Robert 0. Wefald, Attor- ney General of North Dakota; for the National Association of Counties et al. by Robert Sayler; N. for the College and of the Sequoias et al. (ESEA), Pub. Secondary of 1965 Act Education
mentary and seq. §2701 et C. U. S. amended, as 27, 79 Stat. designed to program V). (1976 I created Supp. Title ed., to disad- available opportunities improve educational §2702 ed., C. U. §102, vantaged children. grants federal agencies obtain V). educational Supp. Local obtain agencies, turn which through educational state providing upon Department Education1 grants agen- educational Secretary local assurances programs. qualifying only on spend cies will V).2 §2832(a) (1976 Supp. au- In ed., 182(a), 20 U. S. through September period diting for the L. 96- Pub. 1980. until created was Education Department V). The (1976 ed., Supp. seq. §3401 et S. C. 668, 20 U. Stat. was the litigation to this relevant events many of the involved agency was involved official Education, and the the Office predecessor, sig the distinction unless simplicity, For Education. Commissioner Department and of Education the Office both nificant, will refer we the Commis to both of Education Department of Education Secretary of as the Education Education sioner of Hearing Board I Audit to both Similarly, refer Education. Appeal Board, Education as the Appeal successor, the Education and its Depart (1979), the 30528, 43807 Reg. 44 Fed. regulation, By a Board. before pending appeals Appeal Board Education to the ment transferred Board Appeal the Education when Hearing Board I Audit the Title V). 1234(f) (1976 ed., Supp. §C. created. *4 2 V), 2832(a) (1976 ed., Supp. §C. U. S. in 20 182(a), forth as set Section part: in provides made he has . . until . application approve an not Secretary shall “The in assurances is satisfied that he writing . . . findings in specific application general in its contained assurances and the application such [20 Act Provisions Education General of 435 under section out.” carried (where bewill applicable) 1232d] as V), requires (1976 § 1232d(b) ed., Supp. 435(b), 20 U. S. C. Section all with accordance in administered will be program each “that surances applications.” plans, program regulations, statutes, applicable a sub- 2188, but 95-561, 92 Stat. Pub. added 182 was Section enactment date in effect provision stantially similar 31. §206, Stat. ESEA.
August Pennsylvania 1973, and period July for the 1, 1967, through June compliance 30, 1973,to ensure with ESEA and regulations promulgated under ESEA, federal auditors determined that each misapplied State had funds. After re requested by view Appeal States, the Education Board (Board) findings modified the of the auditors and assessed a deficiency against $1,031,304 deficiency and a against Pennsylvania. $422,424.29 de clined to establishing review the orders the deficiencies, and, period after a for comment, the orders became final. See App. to Pet. for Cert. 57a, timely 86a-87a. Both States filed petitions for review in the United Appeals Court the Third Circuit, which consolidated the cases and held that Department did not authority have the to issue the Jersey Dept. orders. New Education v. Hufstedler, 662 F. 2d 208 It Jersey’s therefore did not reach New arguments that the misapplied State had not in fact Pennsylvania’s funds, id., at arguments 209, or challenging agency’s rulemaking procedures application and its provision, E SEA’s limitations ibid.
II question The threshold in this case, one that need long, detain us jurisdiction. whether the court below had Since federal courts are courts jurisdiction, of limited court below could hear the case if authorized statute. premised It jurisdiction exercise alternatively on 195 (1976 §2851 of ESEA, V), U. S. C. Supp. ed., and on §455 of the General (GEPA), Education Provisions Act amended, Pub. L. 95-561, Stat. 2350, U. S. C. 1234d (1976 V). Supp. provision ed., permits judicial The first re- appeals view in the courts of Secretary’s final action respect with permits judicial audits, and the second review appeals the courts of Although actions of the Board.3 3Both provisions originally were part enacted as of the Education Amendments of Amendments), 195,1232, §§ Pub. L.
778 a that think action, we “final” requires 195 explicitly §
only strong The section. either under necessary is order final only available be review will judicial is that presumption Metropolitan FPC v. final, becomes action agency when 5 generally see (1938); 383-385 Co., 375, U. S. Edison 304 Cooper, E. Miller, A. Wright, (1982 16 C. ed.); § 704 S. C. U. (1977), § 3942 Procedure and Practice Gressman, Federal E. & presumption. that to overcome §455 in is nothing there and made decisions of review judicial provides §455 Indeed, 1234c 1234b, 1234a, §§ S. C. 20 U. 454, 453, §§ 452, under a subsection includes of which each V), (1976 ed., Supp. a “decision” that suggesting finality with dealing 453(d), 452(d), §§ See review. subject is Board (1976 1234c(d) 1234b(d), 1234a(d), §§ S. C. 454(d), least that, at conclude we V). Consequently, ed., Supp. Mathews order, collateral an appealable the absence Cohen v. (1976); 11 Eldridge, n. 331, 424 S.U. v. Corp, 545-547 Loan U. 337 Industrial Beneficial those Appeals that the Court with agree We 2350. Stat. whether question though pretermit retroactively, apply provisions retroac apply also Amendments of the provisions substantive ESEA, was there version of pre-1978 Under at 782. infra, tively, see I Audit the Title of decisions review judicial provision explicit no C. available, 5 U. S. see is review presumption Hearing Board. Gardner, 387 U. S. v. (1982 ed.); Laboratories Abbott 701(a), §§ statute in the any indication absence with the (1967), coupled 136, 140 or agency wholly to the discretion committed is decision that'the 701(a) ed.), leads §C. 5 U. S. see precluded, otherwise review under jurisdiction had would have courts the district conclusion questions, involving federal over cases jurisdiction grant general Davis, Adminis V). 4 K. generally (1976 ed., Supp. § 1331 C.S.U. Courts of Federal (2d Law 1983); Wright, ed. 23:5, p. § Law trative the cases 1976). Department transferred (3d Once § ed. Reg. Board, Fed. Appeal the Education Hearing Board I Audit V) (au 1234(f) (1976 ed., Supp. 451, 20 S. C. U. (1979); see 30528, 43807 merely Amendments the 1978 transfer), effect thorizing the Court explained for Holmes As Justice for review. forum change the forum (1916), change 506, 508 Commons, Hallowell retroactively. apply thus can right” and away no substantive “takes *6 (1949), may the federal jurisdiction courts only exercise over a final Department. order of the We therefore must deter- mine whether this case requirement. meets that The Board’s order, which agency’s became the decision, merely established the amount of deficiency by owed States to the Federal leaving Government, for further “dis- cussion” the repayment.4 method of App. to Pet. for Cert. 88a, possibility 90a. The proceedings further in the agency to determine the repayment method of not, our view, render the orders less than “final.” The situation corresponds here ordinary adjudication to the by a trial court plaintiff that a right damages. has a Although judg- ment in plaintiff favor of the self-executing is not may and he have to undertake proceedings further damages to collect the possibility awarded, that prevent does not appellate review of the decision, which is final. interpreted Our cases have pragmatically requirement finality, administrative focusing judicial on whether at review the disrupt time will process. the administrative g., See, e. v. FTC Standard Oil Jersey New seems to take the view that the Secretary has settled the method of collection demanding repayment. See Brief for Respondent Jersey 16, New 10, n. 28, 15, n. fact, 33-34. In the record shows that each State received notice of the decision, Board’s stating: “[The State] should refund [the Department to the amount] of Education. Appropriate au thorities Department within the will be in touch you with at an early date to discuss the repayment method of of the question.” funds in App. to Pet. for 88a, Cert. 90a. Jersey New reproduced has appendix an brief a letter demand ing immediate repayment, App. to Brief for Respondent la- 2a, suggesting that the Secretary already has determined the manner of collection. That is part letter not record, and we are inclined, in any event, to view it as an proposal initial of a means of collection. 4Cf. CFR (1983) § 102.2 (regulation under Federal Claims Act, Collection Pub. L. 89-508, 3,§ 309, 80 Stat. 31 U. S. requiring agency to make writ ten demand repayment in attempting claims). collection of Moreover, the Secretary, who the petitioner, has not asked us to decide what means of collection are him, available to but he whether is a creditor. Since the case does not present issue remedies, available we do not address it. Termi- Marine Boston Port (1980); Co., S. 449 U. Transatlantic, Rederiaktiebolaget Assn. nal will time at this decision agency’s Review review than more any proceedings administrative disrupt its proc- with interferes damages award court’s a trial may expedite the judgment full review Indeed, esses. lia- ultimate their know the States since process, collection *7 the of determination agency's certainty. with bility its of statement a definitive represented here deficiency par- the obligations the rights determining position, Abbott supra, 239 (explaining Co., at Oil Standard ties, see Bos- Port (1967)); 136 Gardner, U. S. 387 Laboratories States, 363 v. United R. Co. Pennsylvania supra, 71; at ton, prop- Appeals the Court Therefore, 205 jurisdiction toowe case, and the jurisdiction took erly merits. the address to
I I I Secre the challenge first the States merits, the Turning properly if the Board that, even asserting by order tary’s Govern Federal funds, misused they determined must Thus, misused. amount recover cannot ment funds misused has State that a assuming whether, decide liable it becomes ESEA, I of Title it under granted The Education funds. for those Government the Federal Amendments), Pub. Amendments ren seq. (1976 ed., Supp. V), et § 2701 C.S. 2143, U. Stat. funds recover authority explicit dered C. 20 U. S. Stat. 185(b), recipient. aby misspent determina final V). Although (1976 ed., Supp. § 2835(b) after occurred appeals these each Board tion reviewed the audits Amendments, the 1978 enactment be that, position take Both States 1978. before periods for remedy sole Secretary’s Amendments, fore funds withhold could he was prospective: noncompliance brought the State until comply, not that did a State he or §241j, §146, compliance, into program deny applications could for funds for noncomplyingprograms, §241f.5 § 142, 20 U. S. C. they Further, contend that the operated 1978Amendments prospectively only.6 The Secre- Jersey New explains now that it object does not to what it characterizes as a “setoff” by the Secretary but that the Secretary did request remedy in the Court Appeals. Brief for Respondent Jersey New n. 10. is, That if the Secretary properly determined that New mis funds, used could, he in New Jersey’s view, withhold part of the funds that the State would otherwise be entitled to receive under I Title of ESEA in future years, and the State would undertake a smaller I pro Title gram in years. those Jersey’s New proposal not, however, amount to a “recovery” by the Federal Government. Ordinarily, a State would obtain a certain sum in I by giving its assurances that it would expend that sum I Title programs. § 142(a)(1), 20 241f(a)(l). U. S. C. New Jersey, however, proposes that it receive a smaller amount of money than it would otherwise eligible be to receive and that give assurances that it would use that smaller amount for Title I programs. See Brief for Respondent New Jersey 16, 10, 28, n. 15, 34; n. Arg. Tr. of Oral 48. In words, other the Federal pay Government would itself back cutting back on the Title I program at no cost to Jersey. The Secretary *8 does not view this form of “setoff” as satisfactory. Id., at 13-14. Thus, despite Jersey’s assertion that there is longer no any dispute between it and the Secretary over the availability of remedy, some Brief for Respondent New Jersey 17, n. a controversy remains. 6 Pennsylvania has suggested that the Education Consolidation Im and provements (ECIA) Act of 1981 governs this case. Brief Respondent for Pennsylvania 44. It not, however, seek the application of anything but the substantive standards by introduced that Act for determining com pliance. On the contrary, it explicitly argues for application the of the procedures and remedies of pre-1978 the Id., ESEA. at 42. any In event, even if misapprehend we Pennsylvania’s argument and it full seeks retroactivity of ECIA, our result differ, would not for the reme- dies of the ECIA clearly a repayment include remedy. § 452(e), as by added Pub. L. 95-561, 92 Stat. 1234a(e) (1976 20 § U. S. C. ed., Supp.V), made applicable § to by ECIA 400(b), 20 U. S. C. 1221(b); see also 47 Reg. (1982) (to Fed. 52348 be codified in 34 §200.57(a)(2)) (re- CFR quiring repayment of ECIA). funds misused under We decide here whether the can States be held liable for the funds, misuse of and we leave for the Court of Appeals on question remand the whether the substantive standards of the ECIA or the 1978 Amendments can apply grants to approved paid and under pre-1978 the ESEA. retroac- had 1978Amendments the argued that
tary both has pre- recovery in the existed right of the that effect and tive persuaded that the arewe Since of ESEA. 1978 version misusing federal contemplated pre-1978 version for the Government Federal to the a debt incur would funds possible retroac- the address we need misused, amount Amendments.7 the effect tive Pub. 207(a)(1) ESEA, added Section provided: originally Stat. provisions of subject to shall, Commissioner
“The time appropriations], inadequate [dealing with otherwise, the or State, advance pay each to time agencies State of that educational local which amount payments part. Such this under eligible to receive are (if any) which extent account into take shall any previous agency educational State payment such year) (whether fiscal same or not title under this have should which the amount than greater less or paid it.” been forum changed merely Amendments extent To the they have do already decided right, pre-existing of a assertion course, right, pre-existing 3, supra. n. effect. See
retroactive of ESEA. version pre-1978 arises from pretermit tous permits also of ESEA pre-1978 version Relying on by the offered argument alternative —that on the decision recipi any time right to recover common-law ahas Government Compare grant. the conditions with comply fails to grant ent §§ 8:12, 8:15 Agreements Cooperative Grants Federal Cappalli, R.2 necessary); Will authorization regulatory statutory or (1982) (suggesting (1969) 125, 131 Grants, L. Rev. 22 Ad. Nature Function cox, The (CA5 F. 2d Weinberger, 517 Hospital Sinai (same), with Mount statutory provi in the absence authority exists *9 1975) (suggesting v. Virginia (1976); West denied, 425 S.U. contrary), cert. sion curiam) 1981) (specific (CA4 (per 2d 417 Education, F. Secretary of Block, F. 2d 855 v. unnecessary). Cf. authority statutory California invalid misspent funds repayment of 1981) requiring (CA9 (regulation negli “gross misspent with of funds repayment required statute where (1981); Illinois, U. S. 304 v. Milwaukee generally gence”). See (1938). Wurts, S. 414 303 U. United provision, This which remained substantially unchanged as part of Title I until 1970,in gives our view, the Federal Gov right ernment a to the any amount of overpaid. plain language of recognizes the statute right,8 and the legislative history supports that reading. natural The Sen Report explained: ate “[S]ince given the State is authority no to retain paid excess sums to it under any the title, ex paid cess to a State would have to be or returned taken into making account in subsequent payments to the State.” Rep. No. Cong, 146, 89th 1st Sess., 14 Indeed, the Committee obtained assurances Department from the that it recapture would payments, these and the debate on the floor termed those assurances “an essential condition for enacting proposed legislation.” Cong. Rec. 7690 (1965).9
8The only other remotely plausible reading is that suggested by New Jersey, see n. 5, supra the Secretary is to grants —that reduce below the amount that the State would eligible otherwise be receive, and the State is to undertake a less extensive Title I program, so that the Federal Gov ernment recovers nothing: it pays less, but it receives correspondingly less way of Title I programs. Under that reading, the State would have no liability to the Federal Government misspent funds. That reading is no more than remotely plausible. First, it hardly likely that Congress intended disadvantaged children to suffer twice: once when the State misspent the funds and once when the State an cancels oth eligible erwise program because of the Secretary’s refusal to fund it. Sec ond, §207 required the Secretary to use as his starting point the amount “the local agencies educational of that State are eligible to receive” and to adjust that past amount for misuses. But a State becomes “eligible” by giving its assurances that expend will grant on I pro grams. See S. Rep. No. Cong., 89th 1st Sess., 14 (1965); § 142(a)(1), § 241f(a)(1). S. C. Section 207, then, must contemplate that Federal Government will receive the same amount in Title I programs but pay will the State something less than that amount —a net recovery. 9The debates in the House suggested also such a concern and a desire hold the States accountable in every way possible: “It would seem . . . that as the Congress insofar can accomplish end, this rules of accountability, economy, and efficiency will be insisted upon, so that no Federal funds are improperly or wastefully used or diverted to uses permitted by the act.” Cong. (1965) Rec. 6147 (emphasis added).
784 84 Stat. 91-230, Pub. GEPA, Congress enacted 1970, In pro- general bring the towas which of function main the 164, R.H. single title. a together into prior law of
visions
apply to
(1970).
provisions
Its
p. 97
91-937,
Rep. No.
Conf.
1221(b),
was
§
and
C.S.
I,
Title
programs under
of
Section
here.
years
issue
at
the
some
force
207(a)(1)
§
original
the
as
substantially
same
the
GEPA
im-
right to
a
creates
language likewise
its
and
I,10
Congress
enacting GEPA,
In
liability
States.
the
pose
on
misused
return
that
its intention
clear
again made
though
“Even
explained:
Committee
The Senate
funds.
improperly
recovery of
arising from
may be difficulties
there
Con-
if the
enforced
be
exceptions must
funds, those
used
taxpayer.”
the
responsibility to
carry
out
gress is to
(1970).11
p. 84
Rep. No.
enjoys
§
207(a)(1)
and
interpretation of
this
Moreover,
aof
view
the
course,
Congresses. Of
support
later
the
meaning of
definitively the
establish
Congress does
later
persuasive value.
it does
but
enactment,
earlier
an
415 reads:
Section
pro
applicable
any
under
or contracts
grants
pursuant
“Payments
way of reimburse
byor
in advance
installments, and
may made
be
gram
or under
overpayments
account
on
adjustments
necessary
ment, with
§ 1226a-1
20 U. S.
may determine.”
Secretary
as
payments,
V).
ed., Supp.
§425.
numbered
originally
415 was
Section
discussion
Committee’s
Senate
comes
language
quoted
The
Court
§ 415].”
renumbered
423,
[since
422,
and 425
“Sections
error, and
typographical
a
heading reflected
that
concluded
Appeals
Dept.
424. See
and
§§
referred
discussion
seem
It
208, 214-215
F. 2d
Hufstedler,
Education
why that
see
fail to
but
reference
intended
likely
rele
less
any
language
this
render
Jersey argues,
should, as New
feature
recipients
recordkeeping
types
certain
required
Section
vant.
records
required
Auditing
audit.
power to
Secretary
gave
recipient,
overpaid
had
or not
whether
reveal
would
to a
lead
would
overpayments
thought
clearly
Committee
Senate
§425.
former
provided
recovery, as
g.,
See, e. Bowsher v. Merck & Co.,
n. 12 The discussion of the 1978 Amendments to ESEA Congress reveals thought that recipients were already any liable they for funds Representative misused. explained: Corrada
“[T]itle I, ESEA . . regulations [the] . and currently provide for two main enforcement mechanisms at the Federal level: First withholding I title funds from a State or local agency educational when a violation is discovered; and repayment second, the misspent after an audit....
“[The] repayment authority following an audit has been used couple years the last on a number of occa- sions and has been an Approxi- effective measure .... mately one-third of these cases have reached final resolu- tion required and repayment. have proposed
“The amendments . prob- would . . solve the existing lems with the repayment. audit authority.” . . Cong. (1978) added). Rec. (emphasis Later, 1981, Senator DeConcini introduced an amendment prevented that would have any collection of debts aris- ing misuse I Title funds before 1978. Cong. Rec. 10643 ultimately chair ruled the amend- ment out of order, id., at 10646, 10658, but the discus- preceding sion ruling clearly reflects the view of the participants that States were liable for misused funds. As Senator Stennis observed: “It paid has to be back.” Id., at ibid, (remarks 10644; see DeConcini). of Sen. Not have Congress Members of stated their views, but Con- gress has acted on those views.12 In provi- 1974,it enacted 12 “Here we Congress at its most authoritative, adding complex and sophisticated amendments to an already complex sophisticated and act. Congress is not merely expressing opinion an . . . but is acting on what it understands prior own acts to mean.” Mount Sinai Hospital v. Wein berger, 2d, 517 F. at 343. agen- educational and local of state liability limiting
sion within them by received payments those refunds for cies Pub. liability. notice final written before years five Pennsylvania §884.13 Stat. applicability, has general provision this argued has which programs, other to cover drafted Congress funds. for misused recipients on liability impose explicitly provision 32. While Pennsylvania Respondent Brief adminis- of programs number to a apply its terms by for both fails, argument the State’s Secretary, tered history specifically legislative and the provision statutory his- legislative ESEA, I of Title under grants refer to source I as under recent audits identifies tory *12 93-805, No. H. Rep. R. See concern. Committee’s the of (1974). pp. statute, view of the our held long has Department The g., e. See, funds. of misused repayment sought often it (re 09-20033 Files Audit ESEA Education, of Department years for fiscal 6, 1975, October requested fund Amendments, in the eliminated was provision aspect of This 2305. 901(b), § 92 Stat. 95-561, by Pub. per- remedy: specific a new included 1974 bill of the version The Senate funds, recipient retained that, long as as provided The bill formance. in grant “contract” of the performance specific Secretary could seek (1974). 434(c)(2) Sess., § Cong., 2d 1539, 93d courts. the federal provision, eventually eliminated Committee Although the Conference the rem- approved (1974),the Senate p. 184 Rep. No. R. Conf. H. compliance without inducing Secretary means a gave the it edy because withholding applying in involved programs I interruption version (1974). The Senate’s 93-763, pp. Rep. No. remedy. S. addressed §415. concern than question different addresses in services not lose 434(c)(2) that beneficiaries proposed up to live grant recipient of the failure of the future because because the services already lost the beneficiaries Once duties. the Senate noncompliance, to current opposed funds, as misuse past Particularly applicable. longer is no of remedies discussion Committee’s the Sen- 884, we view enactment contemporaneous light undermining, than rather complementing, as bill the 1974 version ate’s §of 415. construction our and received May 25, 1978), (refund 05-90178 requested Sep tember 3, 1971, for period September 1, 1966-August 31, 1967, and received by October 26, 1971), (refund 04-10001 re quested January 29, 1973, for period July 1, 1965-June 30, 1969, and received by April 27,1973); H. R. Rep. No. 93-805, supra, at 79 (discussing recent audits); Washington Research Project of the Southern Center for Studies Public Policy & NAACP Legal Defense and Educational Fund, Inc., Title I of ESEA: Is it Helping Poor (rev. Children? 52 1969). 2d ed. Indeed, in the discussion of Senator DeConcini’s proposed amendment, Senator Schmitt cited some 44 instances of re payments by recipients I misused Title funds. 127 Cong. Rec. 10644-10645 Finally, is worth noting that commentators on the pre-1978 version of ESEA assumed without discussion that the Department possessed the power to request refunds, although they frequently castigated the Department for its failure to exercise that power more often.14
Arguing against this consistent understanding the pre- 1978 ESEA, the States attempt to explain § 415 a provi sion covering payments made “accidentally.” Tr. of Oral 36. Arg. Even accepting interpretation, we remain convinced that the provision covers payments misused as the Board determined these to have been. Grants of misused funds result from the “accident” of the Secretary’s reliance on assurances by the State that the recipient will use the funds *13 in a program that complies with I, Title in when fact the re cipient misuses the funds.15 14 Washington Project Research of the Southern Center for Studies in Policy Public & Legal NAACP Defense and Fund, Inc., Educational Title I of ESEA: Is it Helping (rev. Poor Children? 52 2d 1969); ed. Comment, Federal Aid to Education: I Operational at the Level, 1971 Law & 350; Soc. Order see Berke Kirst, & The Federal Role in American School A Finance: Fiscal and Analysis, Administrative Geo. L. J. 944, and n. (1973); Murphy, Title I of ESEA: The Politics of Implement
ing Federal Reform, Education 41 Harv. Educ. Rev. 35, 44-45 15Pennsylvania suggests also that “overpayment” means only funds that expended are not but remain in the treasury. State’s Brief Respond- for interpretation of against our argument substantial A more Appeals.16 of opinion of the Court by the suggested
§415 is for least at crystal that, clear it make Amendments The 1978 recipient will Amendments, by the governed any period included The Amendments funds. for misused liable be provides: 185(b), § which timely procedures to assure adopt Secretary shall
“The findings recom- of audit resolution appropriate procedures Such .... arising of audits out mendations reso- step the audit of each for timetables include shall Where, process. appeals audit an process and lution process resolution audit procedures, such under were which funds of Federal repayment requires the require the shall misapplied, the misspent or subchapter this under funds repayment the amount through audit finally determined been which misapplied. misspent or been process to have resolution from derived may funds made be repayment Such account- no funds Federal or from sources non-Federal Government. Federal required to ability of which pay- single a may in either made be repayments Such period not a payments over installment or in ment §2835(b) ed., C. years.” 20 U. three exceed V). Supp. pre-1978 interpreting the Appeals feared
The Court ren- liability funds misused providing as ESEA version 215. at We redundan[t].” 2d, 662 F. “plainly] § dered Appeals construe Court reluctance share stat- a limitation such indication see no We Pennsylvania 31. ent find indeed, and, we would history, legislative or in language utory good to obtain permit States Congress meant to believe difficult simple by Government Federal owing otherwise title to them. spending expedient deciding that argument on the Appeals relied 16 TheCourt liability of the recognize did renumbered GEPA, now §to 415. equally applies argument funds. misused to refund *14 statute in a fashion that leaves some provisions superfluous, but we cannot agree that our construction presents problem. Section 185 and the accompanying provisions the 1978 Amendments were, in the words of the Senate “clarif[y] Report, designed to HEW’s legal authority responsibility audit applicant programs” and to “specif[y] certain minimum standards concerning the resolution of out- standing audits.” S. No. Rep. 95-856, (1978) p. (empha- sis added); see H. R. Rep. No. 95-1137, p. (describing the Amendments as requiring that the Secretary “regularize” the process). As the House Report explained: “[NJothing in these new provisions should be interpreted as radically changing present relationship of the Federal government to the States .... These amendments, rather, are meant merely to out lay responsibilities more Id., at ...” clearly. 142. Section 185 itself requires the Secretary to set time- tables each step the audit resolution process, and it requires an appeals process. Further, the provision re- quires that the Secretary demand repayment once liability is established, rather than leaving the method of collection en- to his tirely discretion from the beginning. And it limits Secretary’s discretion with regard installment payments, imposing a maximum period of three years. Construing pre-1978 ESEA to provide for liability, then, does not leave § 185 meaningless. On the contrary, § 185 plays an impor- tant role in specifying the procedures to be followed in the determination of the amount of the debt and in the collection of the debt. Thus, the enactment of the 1978 Amendments does not undermine our construction. Indeed, the legisla- tive history the 1978 Amendments strongly supports view- ing the pre-1978 ESEA as we do. As we have discussed, supra, at 785, the debates the House proceeded on the as- sumption that the liability existed. The House Report also identified as one of the problems with existing law the failure of agency many cases to seek restitution recover the funds misused. H. R. Rep. No. supra, at 50. In sum, not only does our conclusion give meaning the efforts
790 meaning under- gives to their Congress, it also
of the 95th Accordingly, amending. they were standing that law of the of ESEA pre-1978 version that view to our adhere they for funds hable recipients held be requires that misuse.17
IV
League
National
in
relying
decision
Jersey,
on our
of
New
im-
(1976),
urges that
also
Usery,
426 U.
v.
Cities
state
with
interferes
funds
liability
misused
for
position of
It views
Amendment.
of the Tenth
sovereignty,
violation
in
"unpalat-
presenting with
it
as
statute
theof
construction
our
repay
special appropriation
making a
alternatives:
able”
budget
education
for
cutting
its
back
funds, or
misused
for
Brief
Federal Government.
to the
owed
the amount
as-
alternative,
Jersey
Either
28-29.
Respondent New
sovereignty.
infringes its
serts,
obliga-
honor
Requiring
agree.
cannot
We
funding
of federal
a condition
voluntarily
as
assumed
tions
simply
not
ownership
recognizing their
before
participate
sovereignty.
chose
State
their
on
intrude
receiving the
a condition
program and, as
I
Title
freely
in the
by the
abide
it would
assurances
gave
grant,
School
generally
State
Pennhurst
I. See
conditions
(1981);
v.
Quern
17 1,S.
Halderman,
Hospital v.
Hospital
Pennhurst State School
argued
also
The States
the effect
view
(1981),
a different
requires
Halderman,
U. S.
Congress
required that
Pennhurst
statute.
of the
pre-1978 version
grant
on the
impose a condition
it intends
when
“unambiguously”
act
speak
not
Congress did
argue that
Id.,
The States
at 17.
money.
federal
therefore
liability and it
imposing
unambiguously before
shows, we
our discussion
As
disagree.
liability. We
imposing
effective
clear, and
sufficiently
ESEA
is
statute
language
plain
think that
Moreover, Penn
clarity.
legislative
requirement
Pennhurst’s
meets
compli
condition
unexpected
imposing an
context
in the
hurst arose
concern
here our
States —while
participating
obligation for
ance —a new
noncomplying State.
against a
available
the remedies
with
Mandley, 436 U. S.
(1978);
726, 734
Wyman,
Rosado v.
(1970);
397, 408
Oklahoma v. CSC,
Y Once we have right established the of the Federal Govern ment to recover by funds misused the States, we are con fronted question with the how, statutory under the scheme, the Federal Government rights. must assert Again, its agree Secretary’s with the view that the initial determination is to be made administratively. The clearly statute assigned agency to the duty the auditing grant recipients, see § GEPA, § 437, 20 U. S. C. 1232f, and it is in the auditing process that the misuse of funds, magnitude, and its will sur face. provision Further, the supports Secretary’s the right to recover funds, 415 of GEPA, 20 U. S. C. 1226a-1 (1976 Supp.V), ed., adjustments refers to to be made for overpayments Secretary may “as the determine.” Conse quently, we conclude that the determination of the existence and amount liability of the is agency, committed to the in the first instance. The States, of course, an had opportunity present to their any view the justifications facts and expenditures for their agency. to the After the initial determination the audi- Department tors, the provided the opportunity an States for review before the App. Board, see 137-138, 144-145, 158- Depart the decision, rendered body once and, the before comments submit to the invited
ment Secretary, decision final became decision Board’s deci Also, agency’s 86a-87a. 57a, Cert. for Pet. App. Amendments The 1978 review. judicial subject is sion Even appeals. the courts in review provide explicitly review review, for judicial provision explicit an without in the ESEA, for version pre-1978 under available also a deci commits statute indications strong absence 701(a), §§ S. C. discretion, agency irrevocably sion Gardner, Laboratories Abbott ed.); (1982 702, 704 pre action agency’s propriety (1967), S.U. courts, see district in the cognizable question a federal sents in lies Board Appeal Education supra. Review 3,n. § 2851 C. § 195, ESEA appeals, the courts (1976 ed., § 1234d S.U. § 455, GEPA Supp.V); ed., be began which ones, present like cases so, V), Supp. transferred were which Board I Audit fore available review Board, judicial Appeal Education *17 Commons, Hallowell appeals. courts the retroac applied be can of forum (change (1916) opportunity an supra. the Thus, n. tively); of the findings the whether appeals in courts the to litigate reflect and evidence substantial by supported are Secretary 20U. S. §455(c), standards. legal ofthe proper application ed.). (1982 706§C. V); Supp. (1976ed., 1234d(c) V I fol- has Secretary the that conclude then, we case, In this de- administratively has He procedures. proper the lowed State each by owed debt amount termined supra, empowered he is 4,n. see Government, Federal substantial by supported determination Whether do. standards legal proper application by and evidence judi- seek parties affected if courts, ais question sought Pennsylvania and Here, review. cial to per- Appeals to the Court remand and review, mit it to undertake to review the challenges raised each State to the Secretary’s determination. Accordingly, judgment is reversed, and the case is remanded for further proceedings consistent with this opinion.
It is so ordered. Justice White, concurring. The Court holds that the “plain language” 207(a)(1) Elementary Secondary Education ofAct 1965, Pub.
L. 89-10, 79 Stat. 32, successor provision, §415 of the General Education Act, Provisions 20 U. S. C. § 1226a-l (1976 ed., V), Supp. expressly grants the of Edu- (1) cation the right to require States to repay misspent Title I (2) funds, and right make an administrative ad- judication of the question whether funds have in fact been misspent, with the result that such adjudication is subject to judicial review only on a limited, “substantial evidence” basis. Ante, at 782-792. The Secretary will no doubt be pleased with today’s holding, but I note that he must have thought the authorizing language of this provision was not so “plain,” since his lawyers deemed worthy of no more than passing mention in his brief. See Brief for Petitioner 7, 20.
I join the Court’s opinion,
I
although would have preferred
to decide the case on a different basis, one that has been
thoroughly briefed.
I
Specifically, would have
held
1978 Amendments,
see U. S.
2835(b)
§§C.
ed.,
Supp. V), which unequivocally state that the Secretary may
administratively recoup misspent
I
funds, should be
applied
A
retroactively.
federal court or administrative
agency must “apply the
law effect at the the time it ren-
ders its decision, unless doing so would
result manifest in-
*18
justice or
is
there
statutory direction or legislative history
to the contrary.”
Bradley
v.
Richmond School Board, U. S.
(1974).
696, Accord,
Co. v. Mobil
Gulf Offshore
Oil Corp.,