E.D. Auditor Seeks Opinion on Property

By Tom Mirga — November 21, 1984 2 min read

Washington--The Education Department’s top auditor has asked the department’s legal office for an opinion regarding the ownership of $3.6-million worth of office equipment and other property now in the hands of educational laboratories and centers supported by the National Institute of Education.

According to department documents, unconditional title to scientific instruments, automatic data-processing equipment, cameras, and other property was transferred by nie to the labs and centers in the late 1970’s in an effort to minimize reporting and recordkeeping requirements.

But in an internal memorandum last July, Inspector General James B. Thomas Jr. told General Counsel Maureen E. Corcoran that in his view the title transfers were improper.

He also recommended that the transfers be rescinded if legally possible and that the department recoup proceeds derived from any sales of the disputed items.

Officials in the general counsel’s office said Ms. Corcoran has not yet responded to Mr. Thomas’s request for a legal opinion on the propriety of the transfers.

Loss of Contracts

A dispute over ownership of the property could arise next year if current sponsors of the labs and centers fail to win contracts to continue operating them. A 1981 law required nie to begin awarding contracts for the labs and centers on a competitive basis this year.

The winners of the labs competition will be announced in June and those in the centers competition in September. Several observers have pointed out that the competitive-bidding process and changes in the “missions” of the centers all but ensure that at least some of the current lab and center sponsors will lose their contracts.

ed Forfeited Rights

In his July memo, Mr. Thomas noted that because of the title transfers the department forfeited “its right to redistribute the property upon completion of a contract or grant or termination of [a] laborato-ry or center’s operation.”

For example, he continued, the department was not able to sell or redistribute to other government agencies property worth $245,000 when the Central Midwest Regional Educational Laboratory ceased operation last year. The lab lost its nie contract due to auditors’ findings of “serious and significant” deficiencies in its accounting procedures.

Mr. Thomas also noted in his memo that the Southwest Regional Development Laboratory in Austin, Tex., sold property given to it by the nie for $113,293 and deposited those funds in an investment account. The account balance, including accrued interest, was $132,548 as of last Feb. 28, he said.

An nie official familiar with the labs and centers competition said last week that the agency would most likely handle the redistribution and sale of property at labs and centers that lose their contracts “on a case-by-case basis.”

“I doubt there would be a uniform policy,” the official said. “We’d have to see exactly how they came into possession of the property.”