# Petition for Writ of Certiorari — Milwaukee County v. Brock > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385018_1276%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition for Writ of Certiorari - **Published:** January 1, 1986 - **Citation:** 476 U.S. 1140 ## Text 85 a 1 1 0 ) 4 ; Supreme Court, U.S. 7 FILED No. | : CLERK DEC 8@ 1885 JOSEPH F. SPANIOL, iR In The iN Supreme Court of' the United States October Term, 1985 ray Vv MILWAUKEE COUNTY, WISCONSIN, Petitioner, WILLIAM E. BROCK, SECRETARY OF THE UNITED STATES DEPARTMENT OF LABOR, Respondent. ra Vv PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SEVENTH CIRCUIT ray Vv Rosert H. F'rmsert CHARLES D. CLAUSEN Davip P. Lowe Two Plaza East — Suite 1250 Milwaukee, Wisconsin 53202 (414) 271-0130 Attorneys for Petitioner Of Counsel: WrieBert, Finerty & St. Joun, S.C. Two Plaza East — Suite 1250 Milwaukee, Wisconsin 53202 (414) 271-0130 COCKLE LAW BRIEF PRINTING CO., (800) 835-7427 Eat 333 1. QUESTIONS PRESENTED Does Comprehensive Kmployment and Training Act (“CETA”) § 106(b), which states that the Secretary of Labor “shall’’ issue a final determinaiion within 120 days of a complaint alleging unlawful use of CETA funds by a grant recipient, bar the Secretary from recovering grant funds when the Secretary fails to issue a final determination within the 120-day period? Did Milwaukee County, as a CETA grantee, vio- late CETA’s prohibition against ‘‘the substitution of Federal for other funds in connection with work that would otherwise be performed’’ by reducing its local expenditures in a county-funded ‘‘workfare’’ program for welfare recipients by wage and hour reductions made in response to National League of Cities v. Usury, 426 U.S. 833 (1976), overruled Garcia v. San Antonio Metropolitan Transit Authority, 105 S.Ct. 1005 (1985), and not in anticipation of CETA fund- ing? il TABLE OF CONTENTS Questions Presented Opinions Below 0 sds nsec, MOET A te, MM cS ee: nase Reasons For Granting The Petition oa, SL TWA Appendix 000. TABLE OF AUTHOR'TITES Page CASES: Chrysler Corp. v. Brown, 441 U.S. 281 (1979) 000000. =-12 City of Edmonds v. United States Department of Labor, 749 F.2d 1419 (9th Cir, 1984) 20. 10, 11, 12 Consumer Products Safety Commission v. GTE Sylvania, Inc., 447 U.S. 102 (1980) ow 1] Garcia v. San Antonio Metropolitan Transit Au- thority, — U.S. —, 105 S.Ct. 1005 (1985) .... 8 Lehigh Valley Manpower Program vy. Donovan, ee me Ue OPPOR GAR, BO ancien DD LD, 1D Maryland v. Wirtz, 392 U.S. 183 (1968) 0... s Mohasco Corp. v. Silver, 447 U.S. 807 (1980) _..... 13 National League of Cities v. Usury, 426 U.S. 835 Co 8, 9,10, 14, 19 Pierce County v. United States Department of Labor, 759 F.2d 1398 (9th Cir. 1985) .... 10, 11 St. Regis Mohawk Tribe v. Brock, 769 F.2d 37 (2nd Cir. 1985) ................. tele AA St TR — 10 STATUTES AND REGULATIONS: | Comprehensive Employment and Training Act, 29 U.S.C. (Supp. V 1981) 801 et seq. ........... + So 0. |) 25 U.S.C. (Supp. V 1981) 816(b) ........... a 2 wae. (cup. V 1961) 817 ........................ | 9 Job Training Partnership Act, ET NEE ON OO asc namnsinncnenneenennee > + ao USC. 1991 (e) ................ iv TABLE OF AUTHORITITES—Continued 20 U.S.C.A. § 1206(b) (1) oon eee eek) ties 15 StAcs (ewes ee SURCA. $80) aaa 16 20 U.S.C.A. § S280 (8) (4) eennecnennnenener en 18 Oa Cw eee 9 29 U.S.C.A. § 708 (1974) cceneenenrnenennennnnnernerneeed 6, 17, 18, 19 29 U.S.C.A. § T95(I) (1) (TE) cnn 16 UBL. sees SE Ln Pelien APOC eh PB an ve. Ae 13 42 U.S.C.A. § 3056(b) (1) (BI) cnn eR ERS 17 42 U.S.C.A. § 5108(D) (2) (HD) occ aimee 16 42 U.S.C.A. § 5801(€) ccnnncnenennne nmmnnnnnennnnnen 16 42 U.S.CLA. §6948(D) ooo eenncennnnnnnnnnmnnmmamnnnnn 16 Sts ae. 42 U.S.C.A. § 9835 (0) ecncnnnevenenennnneeninnnnninnennnnninnn 16 42 U.S.C.A. § 10608 (a) (2) (D) ecccecennnnnnnemnnnnnnnnn 16 42 US.CLA. §10706(0) (1) nn SAC er 16 Pub.L. 88-210, as added) Pub.L. 98-524, 98 Stat. SIE brckdesicieecsd es anscincaularciobaetniasatchaloasceiia scsi iapapinisiindelibamempaitione . 1d Pub.L. 89-10, as added Pub... 95-561, 92 Stat. 2168... 16 Pub.L. 89-10, as added Pub.L. 98-511, 98 Stat. 2874 00. 15 Pub.L. 89-73, as added Pub.L. 94-135, 89 Stat. 720 0000. 17 Pub.L. 89-272, as added Pub.L. 94-580, 90 Stat. 2818... 16 Pub.L. 89-750, 80 Stat. 1219 ..................... HU mee LPN See . 16 a Te, GO Ta TT risen 15 TABLE OF AUTHORITIES—Continued Page Pub.L. 93-112, as added Pub.L. 95-602, 92 Stat. 2989 17 Pub.L. No. 93-203, 87 Stat. 839 et seq. 3,4 Pub.L. No, 93-247, 88 Stat. 5 aes 16 Pub.L. 93-383, 88 Stat. 633 ; 16 Pub.L. 94-142, 89 Stat. 782 15 Pub.L. 95-542, 92 Stat. 1909 et seq. 4 Pub.L. 95-561, 92 Stat. 2359 : 16 Pub.L. 97-35, 95 Stat. 491 Se L7 Pub.L. 97-35, 95 Stat. 499 | . 16 Pub.L. 98-473, 98 Stat. 2171 SST ie GA a ee 16 Pub.L. 98-620, 98 Stat. 3342 16 20 C.F.LR. Section 676.86(a)(1)(e) (1982) . gy | Section 676.88(e) (1982) aa an 14 29 C.F.R. l Section 676.91(f) (1983) 9 MISCELLANEOUS: S. Rep. No. 95-891, 95 Cong., 2d Sess. 42, reprinted in 1978 U.S. Code Cong. and Admin. News at 4522 ........ Sat Ee 4,1: to Sn ee In The Supreme Court of the United States October Term, 1985 re Vv MILWAUKEE COUNTY, WISCONSIN, Petitioner, WILLIAM FE. BROCK, SECRETARY OF THE UNITED STATES DEPARTMENT OF LABOR, Respondent. > Vv PETITICN FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SEVENTH CIRCUIT Vv Milwaukee County. Wisconsin by Friebert, Finerty & \ St. John, S.C. its attorneys, petitions for a writ of cer tiorari to review the judgment of the United States Court of Appeals for the Seventh Circuit in this case. 0-—- ——_—_- OPINIONS BELOW The opinion of the Court of Appeals (App., 1-89) is reported at 771 F.2d 983. The reported opinion reflects an Order (App., 40) dated August 26, 1985, amending the 1 Slip Opinion, The opinion of “ae Administrative Law Judge (App., 45-151) is unreported. JURISDICTION The judgment of the Court of Appeals (App., 42) was entered on August 6, 1985. The Court of Appeals* order denying petitioner's petition for rehearing and sugges- tion for rehearing en bane (App., 43) was entered on Sep- tember 9, 1985. On November 26, 1985, | wstice Stevens extended the time within which to file this Petition for Writ of Certiorari to and including January 2, 1986. (App., 164) The jurisdiction in this court rests upon 2s U.S.C, 1254(1). ty V STATUTES INVOLVED Section 106(b) of the Comprehensive Employment and Training Act, 29 U.S.C. (Supp. V_ 1981) 816(b), provides in pertinent part: Whenever the Seeretary receives a complaint from any interested person or organization . . . which alleges, or whenever the Secretary has reason to be lieve (because of an audit, report, onsite review, or otherwise) that a recipient of financial assistance un der this chapter is failing to comply with the require ments of this chapter, the regulations under this chapter or the terms of the comprehensive employ ment and training plen, the Secretary shall investi gate the matter. The Secretary shall conduet suel: investigation, and make the final determination re ————————OErrrerererorrererererreeee quired by the following sentence regarding the truth of the allegation or belief involved, not later than 120 days after receiving the complaint. If, after such in vestigation, the Secretary determines that there ts substantial evidence to support such allegation o1 belief that such a recipient is failing to comply with such requirements, the Secretary shall, after due notice and opportunity for a hearing to such recip ient, determine whether such allegation or belict is true. The following are excerpts from the 19783 Act (Pub. L.No, 93-203, 87 Stat. 839 ef seq.) pertaining to **main tenance of effort’’:' _- ‘ 03. Conditions applicable to all pregrams. The Secretary shall not provide financial assistance for an) program under this chapter unless— (7) the program will not result in the displace ment of employed workers or impair existing contracts for services or result in the substitution of Federal for other funds in connection with work that would otherwise be performed ; > » . (11) funds will be used to supplement, to the ex tent practicable, the level of funds that would other wise be made available from non-Federal sourees Tor the purpose of planning and administration of pro ’ grams within the scope of this chapter and not supplant such other funds; 1 Cognate statutes and regulations pertaining to individual Titles of CETA and repeating the language of § 703 are con- tained in the Decision and Order of the Adninistrative Law Judge (App., 110-113). 4 STATEMENT 1. The Comprehensive Employment and Training Act (CETA), 29 U.S.C. (Supp. V 1981) 801 et seq., author- ized the Secretary of Labor to grant federal funds to qual- ified entities, principally states or units of local govern- ment, for programs ‘‘provid[ing}' job training and em- ployment opportunities for economically disadvantaged, unemployed, or underemployed persons.’’ 29 U.S.C. (Supp. V 1981) § 801. The statute originally was enacted in 1973 (Pub.L.No. 93-203, 87 Stat. 839 et seq.) and was amended substantially in 1978 (Pub.L.No. 95-524, 92 Stat. 1909 et seqg.). Lffeective October 18, 1982, CETA was re- pealed and replaced by The Job Training Partnership Act, 29 U.S.C. 1501 et seg. (Pub.L.No. 97-300, $184 (a)(1), 96 Stat. 1857). However, CETA continues to govern ad- ministrative or judicial proceedings pending on October 13, 1982, or begun between October 13, 1982 and Septem- ber 30, 1984 (29 U.S.C. § 1591(e)). 2. As part of the 1978 CETA amendments, Congress added the 120-day provision set forth in ¢ 106(b) of CETA. (Pub. L.No. 95-524. 92 Stat. 1909 et seq.) The Senate Report relating to the 1978 amendments noted, in pertinent part, that: ‘‘In some cases grievances have been either ignored, or there have been interminable delays.’’ S.Rep. No. 95-891, 95 Cong., 2nd Sess. 42, reprinted in 1978 U.S. Code Cong. and Admin. News at 4522. The Senate Report further stated: ‘‘After a complaint is filed the Secretary must make a determination on a complaint on the merits of the case within 120 days’’ Id. at 4523. 3. Questions about the administration of CETA pro- grams by a recipient of CETA funds can be raised by the Secretary of Labor or by ‘‘any interested person or or- ganization’’ alleging that a recipient of CETA funds is failing to comply with CETA, its implementing regula- tions, or the terms of the comprehensive employment and training plan. CETA §106(b), 29 U.S.C. (Supp. V 1981) § 816(b). The same provision then provides that “not later than 120 days after receiving the complaint’’ the See- retary shall conduct an investigation “and ma-; the final determination as to whether the allegation is true.” 4. CETA contained a number of sections, generally referred to as ‘‘maintenance of effort’? provisions, which required that funds made available through the Act be used in ways that increased employment opportunities without displacing currently employed workers, impairing existing contracts for services, substituting Federal for other funds in connection with work that would otherwise be performed, or supplanting the level of funds that would otherwise be made available from non-Federal sources for the purpose of planning and administration of programs within the scope of the Act. (See, App., 110-113) 5. Petitioner, Milwaukee County, for many years prior to 1977, maintained and funded a work-training pro- gram for welfare recipients, known as the Pay for Work Program (‘‘PFWP’’). In June, 1977, Milwaukee County started using CETA funds for work training programs for welfare recipients who were not employed within PFWP because of the unavailability of sufficient job slots. Between January and March, 1978, Milwaukee County terminated its PF WP by transferring all its work- ers into a program known as the Work Assistance Pro- gram (‘‘WAP’’). In an effort to comply with the main- 6 tenance of effort provisions, Milwaukee County contrib- uted state and local monies to WAP in addition to the lederal CETA monies used to fund the program. No workers in locally fanded PF WP were transferred to the jointly-funded WAP until January, 1978. 6 In 1976, Milwaukee County expended $3,014,580 on PFWP. In 1977, Milwaukee County expended 32,097,428 on PFWP. In 1978, Milwaukee County ex- pended $333,277 on PE WP and $2,399,210 of non-Federal funds on WAP. In each of the vears 1979 and 1980, non- federal contributions to WAP were between $4,000,000 and $5,000,000. 7. The instant action arises out of proceedings be- fore the United States Department of Labor (‘the De- partment”) initiated by a series of complaints about WAP. The principal complainant was a welfare rights organiza- tion known as ‘*The Workfare Coalition’? or as ‘‘ Worker Rights Institute.’’ The initial complaint was dated Feb- ruary 20, 1978, and alleged, inter alia, that Milwaukee County’s WAP program resulted in a prohibited substi- tution of Federal funds for non-federal funds. (App. 2, 154) On May 25, 1978, the Workfare Coalition again com- plained to the Department that WAP resulted in the sub- stitution of Federal funds for other funds. (App. 2, 162 $ At some time prior to September 11, 1978, the Department commenced an investigation of the complaint against Milwaukee County. On September 11, 1978, Mil- waukee County provided to the Department’s investigator the PFWP and WAP funding figures stated in paragraph 6 above. Those figures have never been disputed by the Department or the complainants, and they formed the basis for all subsequent decisions concerning substitution 7 of funds by the Department Grant officer, the Adminis- trative Law Judge, the Secretary, and the Court of Ap- peals. (App., 124-125) 9% All the complaints against Milwaukee County were investigated by the Grant Officer of the Department’s Region V. While the February 20 and May 25, 1978 com- plaints were being investigated, the Workfare Coalition continued to file new complaints and inquiries on its own behalf and on behaif of many participants in the CHTA- funded program. These complaints and inquiries were also directed by the Department to its Region V office. (App., 136-137) 10. The Grant Officer issued his initial determina- tion on all of the complaints, including those concerning substitution of funds on May 29, 1979. The final deter- mination was issued on January 4, 1980, almost two years after the initial complaint about substitution of Federal funds for local funds, more than fifteen months after Mil- waukee County provided the Department with the relevant information, and more than nine months after the effective date of the 1978 amendment to CETA requiring the See- retary to make this final determination within 120 days after receiving the complaint. 11. In both the initial and final determinations, the Grant Officer found that Milwaukee County had not sub- stituted Federal funds for local funds, since Milwaukee County spent more non-federal funds in 1978, the year that PF WP was terminated, than in 1977. 12. An ALJ hearing on this issue and a large num- ber of other issues addressed in the initial and final deter- minations by the Grant Officer was requested by the Workfare Coalition and certain individual complainants. 13. Eight weeks of hearings before the ALJ were conducted between August 4, 1980 and March 138, 1981, on most of the issues raised in the complaints, including the allegation that Milwaukee County had improperly sub- stituted Federal funds for non-federal funds in the WAP. Before the ALJ, Milwaukee County and the Solicitor of Labor, acting as attorney for the Grant Officer, jointly defended the Grant Officer’s final deterinination that Mil- waukee County ‘had not violated CETA’s prohibition against substitution of Federal funds for local funds, and that the appropriate ‘‘base’’ year for comparing levels of non-federal expenditure was 1977. 14. The ALJ decision was not issued until Decem- ber 5, 1983. The ALJ, rejecting the arguments both of Milwaukee County and of the Solicitor of Labor attorney representing the Grant Officer, reversed the ruling that Milwaukee County had not substituted Federal funds for local funds and held that the appropriate ‘‘base’’ year for comparison purposes was 1976, not 1977. The ALJ ruled that because Milwaukee County spent $1,199,245 less on its workfare program in 1977 and 1978 than it had in 1976, the County should reimburse the Department $1,199,245 15, Over $850,000 of the ‘‘shortfall’’? between 1976 County expenditures for PF WP and the expenditures in 1977 and 1978 for PF WP was attributable to wage and hour reductions for PF WP participants undertaken by Milwaukee County in reliance on this Court’s then-recent decision in National League of Citries v. Usury, 426 U.S. 833 (1976), overruling Maryland v. Wirtz, 392 U.S. 183 (1968) and overruled in Garcia v. San Antonio Metro- politan Transit Authoryty, 105 S.Ct. 1005 (1985). The ALJ specifically found that those reductions were not CET A-related, but rather a response to Nattonal League of Cities. (App., 129-1380). Nonetheless, the ALJ held that Milwaukee County was required to spend in its loeal workfare program as much non-federal money in 1977 and 1978, after National League of Cities, as it had in 1976, before National League of Cities. 16. The ALJ also found that Milwaukee County had committed no underfunding of the workfare program in 1979 or 1980 and had in facet contributed between $4,000,000 and $5,000,000 of non-federal funds to the program during each of those vears, substantially in excess of the $3,014,580 spent in the comparison year of 1976. (App., 127). Mil- waukee County, however, received no credit for these ex- cess contributions against the $1,199,245 liability to the Department. 17. The ALJ determination became the Secretary of Labor’s final action on January 4, 1984, pursuant to 29 C.F.R. § 676.91(f) (1983). 18. Petitioner sought judicial review in the Court of Appeals pursuant to 29 U.S.C. (Supp. V 1981) 817. The Court of Appeals denied in part and granted in part the petition for review and ordered the case remanded to the Secretary for further proceedings. With respect to the ‘substitution of funds’’ issue, a divided panel of the Court of Appeals affirmed the Secretary’s conclusion, with the dissenting judge noting that the majority refused to take into account the fact that the County had reduced PF WP wages and hours solely in response to National League of Cities. The dissenter noted that the majority opinion re- 10 quiring Milwaukee County to spend as much in 1977 and 1978, notwithstanding the cost savings realized solely in response to National League of Cities, actually would have required that Milwaukee County increase its effort, not merely maintain it. (App. 34-39) i9. Respecting the effect of the statutory and regu- latory requirement that the Secretary issue his final de- termination within 120 days, the Court of Appeals held that the requirement was not ‘‘jurisdictional.’’? (App. 4-15) ~ _ REASONS FOR GRANTING THE PETITION A. Conflict in the Circuits. The decision of the Court of Appeals below, holding that §106(b) of CETA is not jurisdictional, and the deci- sion in St. Regis Mohawk Tribe v. Brock, 769 F.2d 37 (2d Cir. 1985). squarely conflict with the decisions in Pierce County v. United States Department of Labor, 759 F.2d ~ 1398 (9th Cir.), cert. granted, 106 S.Ct. 308 (Nov. 4, 1985) (No. 85-395), City of Edmonds v. United States Depart- ment of Labor, 749 F.2d 1419 (9th Cir. 1984), and Lehigh Valley Manpower Program v. Donovan, 718 F.2d 99 (3d Cir. 1983). This jurisdictional question over which the cireuits are in conflict was the sole issue raised by the Secretary of Labor in his petition for a writ of certiorari in the Pierce County case, and the Secretary relied extens- ively on the decision of the Seventh Cireuit in this case to support his petition. By granting certiorari in the 11 Pierce County case, this Court has already determined that the question over which the Courts of Appeals have split is worthy of certiorari review. Moreover, the decision below is wrongly decided be- cause it interprets § 106(b) in a manner that is contrary to the express language of the statute and that weakens the strong incentive Congress intended to give the Secre tary of Labor to resolve promptly those cases awaiting final determinations. The decision is also contrary to a long line of cases holding that administrative agencies must stay within the confines of the powers granted to them by statute. 1. The language of the 120-day provision is un- equivocally mandatory, requiring that the Secretary ‘‘ shall . make the final determination ... not later than 120 days after receiving the complaint.’’ (emphasis added). The Courts in City of Edmonds v. United States Depart- ment of Labor, 749 F.2d 1419 (9th Cir. 1984) and Lehigh Valley Manpower Program v. Donovan, 718 F.2d 99 (3d Cir. 1983) found the plain meaning of this language to be mandatory and jurisdictional. Even the court below ‘ grudgingly concedes that §106(b) ‘‘seems to require a ‘final determination’ within 120 days of the receipt of the complaint’’. (App., 6) As the Court of Appeals noted in City of Edmonds, a statute should be “construed accord- ing to the plain meaning of the words used by Congress, ‘absent a clearly expressed legislative intention to the contrary.’ Consumer Products Safety Commission v. GTE Sylvania, Inc., 447 U.S. 102, 108 (1980).” 749 F.2d at 1421. 2. There is no such ‘‘clearly expressed legislative in- 1? in § 106(b) as anything oth- tention’’ to construe ‘‘shal er than mandatory and binding on the Secretary. In reaching a contrary conclusion, the court below relied principally upon the remarks of Congressman Obey, who introduced the 120-day provision as an amendment during the floor debates over the 1978 amendments to CETA. (App. 6-7) The Court of Appeals for the Ninth Cireuit in City of Edmonds considered Congressman Obey’s remarks, but noted that the Joint Explanatory Statement of the Con- ference Report makes no reference to Congressman Obey’s floor-debate comments and that the Conference Report, which was written after Congressman Obey’s comments, ‘‘eonstrued the proposed final draft of the statute to re- quire that the Secretary ‘must’ make a final determination within 120 days.” 749 F.2d at 1422. The court also noted, as this Court observed in Chrysler Corp. v. Brown, 441 U.S. 281, 311 (1979) that the “remarks of a single legis- lator, even the sponsor, are not controlling in analyzing legislative history.’’ 749 F.2d at 1422. 3. Moreover, the Senate Report on the 1978 CETA Amendments shows that Congress was concerned that the Department was too slow in rectifying alleged abuses in CETA programs: ‘‘In some cases grievances have either been ignored, or there have been interminable delays.’’ S. Rep. 95-891 95th Cong. 2nd Sess. (1978). Giving a juris- dictional effect to the 120-day provision, thereby creating an incentive to insure prompt action by the Secretary, is entirely consistent with this legislative concern. 4. The decision of the court below is too broad be- cause it fails to give binding effect to the 120-day provi- sion of §106(b) even where the relief sought does not run in favor of an aggrieved complainant, but rather to the De- 13 partment itself. It may be appropriate to find the 120-day provision not to preclude relief, for example, where a complainant alleges an|improper termination from a CETA program and seeks reinstatement and back pay, but to give the provision preclusive effect where the Department seeks to disallow costs inenrred due to a substitution of federal for local funds, as was alleged in this case. Indeed, the illustrations used by the court below to support its interpretation of the 120-day provision are those of pro- gram participants seeking individual relief, rather than cost disallowances by the Department. The court raises the specter of the Department having the power of ‘‘pock- et dismissal’? of an aggrieved participant’s eomplaint. (App., 8-9) The court speaks of the ‘‘paradoxical hardship on claimants by destroying their claims if the Secretary does not aet expeditiously.’? (App., 11) Moreover, the court distinguished this Court’s decision in Mohasco Corp. v. Stlver, 447 U.S. 807 (1980) because the statutory time limit there—42 U.S.C. § 2000e-5(e)—dealt with ‘‘the filing of a charge by an aggrieved employee, which does not cor- respond to the situation presented by CETA § 106(b), where the claimants have filed a timely claim and only the decisionmaker is responsible for the delay.’’ (emphasis added) (App.. 18-14) Although the complainants in this ease alleged a substitution of Federal for local funds, re- lief for such a violation does not run in favor of the indi- vidual complainants, but rather in favor of the Depart- ment. Given Cengress’ purpose to insure prompt resolu- tion of complaints by the Department, it is entirely con- sistent with legislative intent to give the mandatory lan- guage of § 106(b) preclusive effect where the relief sought runs in favor of the Department. 14 5. Finally, as noted by the Third Cireuit Court of Appeals in Lehigh Valley Manpower Program v, Donovan, 718 F.2d 99 (3d Cir. 1983), since the Department incorpor- ated the 120-day limit into its own regulations, (see 20 C.FLR. 88 676.86(a) (1), (@), 676.88(e) (1982), the Depart ment is bound by its own rules. 718 F.2d at 101-102. The court below did not dispute that the Department had vio- lated its own procedural rule by failing to comply with the 120-day provision, but would have found the regulation invalid as inconsistent with its statutory source if it were read as barring relief against grantees. (App., 13) 6. At least in those instances where the Department seeks relief on its own behalf, as distinct from relief in favor of program participants, a regulation adopted by the Secretary imposing on the Department a jurisdictional requirement would not be contrary to § 106(b) of the Act in view of the aforementioned congressional purpose of assuring prompt resolution of complaints. B. The Decision Below Raises Significant and Recurring Problems Concerning Compliance by State and Local Governments with Federal ‘‘Maintenance of Effort’’ Requirements. The Seventh Cireuit’s decision in this case raises im- portant and recurring problems concerning compliance by State and local governments with ‘‘maintenance of ef- fort’? requirements in Federal grant programs. Definitive guidelines should be provided by this Court for the proper application of statutes prohibiting the substitution of Fed- eral for non-Federal funds so that both Federal grantors and State and local grantees may properly impiement stat- utory requirements. The problem addressed in the deei- 15 sion below is very likely to be a recurring one, since there are a great many Federal assistance programs which pro- hibit the substitution of Federal for non-Federal funds for program purposes, and fluctuations in levels of local spend- ing are commonplace. By using as its base of comparison, without statutory warrant, County expenditures during the year preceding the use of CETA funds, rather than during the year when CETA funds were first spent by the County, and by ignoring the effect of local savings at- tributable to wage and hour reductions implemented in reliance upon National League of Cities v. Usury, supra, the Seventh Circuit has transmuted common statutory lan- guage intended to require maintenance of effort into a requirement to increase effort. A great number of Federal grant programs designed for participation by State and local governments have statutory restrictions requiring the State or local grantee to use the Federal funds to supplement, rather than sup- plant, the state and local level of funding that would oth- erwise be devoted to program purposes. The statutory sources of these programs are most commonly found in Title 20 (Edueation)? and Title 42 (The Publie Health and 2 See, e.g., 20 U.S.C.A. § 1413(a)(9) (Pub.L. 91-230, Title VI, § 613, Apr. 13, 1970, 84 Stat. 179; Pub.L. 94-142, § 5(a), Nov. 29, 1975, 89 Stat. 782) (Federal assistance for education of handi- capped children); 20 U.S.C.A. 2323(b)(16) (Pub.L. 88-210, Title 1, § 113, as added Pub.L. 98-524, § 1, Oct. 19, 1984, 98 Stat. 2445) (Federal assistance for vocational education); 20 U.S.C.A. § 3231(f)(4) (Pub.L. 89-10;Title Vii, § 721, as added Pub.L. 98-511, Title Il, § 201, Oct. 19, 1984, 98 Stat. 2374) (Federal assistance for bilingual education). 16 Welfare)’ of the United States Code. Although a few of the statutes provide express stendards for determining whether a grantee has mez the required level of non-federal funding,* the vast majority of the statutes simply provide that the grant recipient must use the Fed- eral monies to supplement rather than supplant non-fed- eral funding or, as with 29 U.S.C. § 703(7), prohibit the substitution of Federal funds for non-Federal funds. A number of Federal grant programs intended to create employment opportunities or to enhance the employability of certain target populations contain statutory mainten- ance of effort restrictions that are identical to the CETA restrictions that Milwaukee County was found to have violated, i.e., ‘the substitution of Federal funds for other funds in connection with work that would otherwise be performed.’’ These include the Community Service Em- ployment Pilot Program for Handicapped Individuals, 2° 3 See, e.g., 42 US.CA. § 5103(b)(2)(H) (Pub.L. %5-247, Jan. 31, 1974, 88 Stat. 5) (child abuse prevention and treatment); 42 U.S.C.A. § 5301(c) (Pub.L. 93-383, Title 1, § 101, Aug. 22, 1974, 88 Stat. 633) (housin’ and community development); 42 U.S.C.A. § 6948(b) (Pub.L. 89-272, Title I, § 4008, as added Pub.L. 94-580, § 2, Oct. 21, 1976, ~* Stat. 2818) (solid waste disposal); 42 U.S.C.A. § 9835(c) (Pub.L. 97-35, Tithe VI, § 640, Aug. 13, 1981, 95 Stat. 499) (‘Head Start’ program); 42 U.S.C.A. § 10603(a)(2)(b) (Pub.L. 98-473, Title Hl, § 1403, Oct. 12, 1984, 98 Stat. 2171) (crime victim assistance); 42 U.S.C.A. § 10706(d)(1) (Pub.L. 98- 620, Title Il, § 207, Nov. 8, 1984, 98 Stat. 3342) (State Justice Institutes). * See, e.g., 20 U.S.CA. § 1206(b)(1) (Pub.L. 89-750, Title I, § 307, Nov. 3, 1966, 80 Stat. 1219, as amended Pub.L. 95-561, Title XI, § 1306, Nov. 1, 1978, 92 Stat. 2359) (adult basic educa- tion); 20 U.S.C.A. § 2736(a)(1) (Pub.L. 89-10, Title |, § 126, as added Pub.L. 95-561, Title I, § 101(a), Nov. 1, 1978, 92 Stat. 2168) (special educational needs of children). 17 U.S.C.A, § 795(b) (1) (B)5; the Older American Community Service Employment Program, 42 U.S.C.A. § 8056(b) 01) (E)*; and Community Economic Development Ubran & Rural Special Impact Programs, 42 U.S.C.A. § 9807(a) (10)’, Among the questions that ar necessarily implicated by these statutes but for which the statutes themselves provide no guidance are: (1) What are the appropriate periods of time to com- pare levels of State or local spending? (2) Under statutes like 29 U.S.C.A. ¢ 703(7), which prohibit the substitution of Federal for non-Fed- eral funds ‘‘in connection with work that would otherwise be performed,’? may a State or local grantee reduce non-Federal program expenditures, without violating the statute, so long as no work or worker is affected by the spending reduction? (3. To what extent, if any, should State or local grantees of Federal assistance be permitted to ef- fect reductions in non-Federal spending levels, un related to the availability of Federal funds? (1) Base of Reference for Comparison. The Seventh Cireuit rejected Petitioner's argument that 29 U.S.C.A. § 708(7) could not be violated so long as the level of local spending after the inception of the CRT A funded program was not less than the level of local spend. > Pub.L. 93-112, Title VI, §611, as added Pub.L. 95-602. Title ll, § 201, Nov. 6, 1978, 92 Stat. 2989. ® Pub.L. 89-73, Title V, § 502, formerly Title IX, § 902, as added Pub.L. 94-135, Title 1, § 113(a), Nov. 28, 1975, 89 Stat. 720. ” Pub.L. 97-35, Title VI, § 618, Aug. 13, 1981, 95 Stat. 491. 18 ing at the time the CETA monies were first committed or spent by Milwaukee County. When Federal assistance first becomes available in the middle or toward the end of a year during which a State or local government has reduced its local expenditures from the preceding year, not in anticipation of Federal funding, the Seventh Circuit approach will deter eligible grantees from partici- pating in the assistance program during that year, since acceptance of the Federal assistance will trigger a disal- lowance of costs equal te the difference in program expen- ditures between the first year of Federal assistance and the preceding year, whether the spending reductions are attributable to the availability of Federal assistance or not. Indeed, it may be expected that those State and local governments most in need of Federal assistance for certain programs, because of substantial spending cuts unrelated to the availability of Federal assistance, will be most hurt by the Seventh Circuit’s approach to ‘‘maintenance of effort’’. This in turn will frustrate Congressional pur- pose in making the Federal assistance available in the first instance. | An approach that is less arbitrary, more rational and consistent with Congressional purpose is to compare the grantees’ non-Federal spending after the receipt of Fed- eral assistance with the level that existed at the time of receipt. not with the level of spending a year before. The decision of the Seventh Cireuit will require State and local grantees to increase their program expenditures in the initial year of Federal assistance over what would otherwise be spent in the absence of Federal assistance. 19 (2) Meaning of “work that would otherwise be performed.”’ The majority opinion below denigrated the signifi- cance of the reference in 29 U.S.C. § 703(7) to ‘‘work that would otherwise be performed’’ by holding Milwaukee County liable for expenditure decreases which were un- related to CETA funding and which had no effect on work that was being performed at the time the CETA-funded program began. Even though Milwaukee County did not discharge, lay-off or reduce the hours of any of its locally- funded welfare recipients upon the creation of the supple- mentary CET A-funded ‘‘workfare’’ program, the major- ity opinion below held the County liable simply for its failure to spend as much local money in its program as it had during the year preceding the creation of the CETA- funded program. This approach makes the words ‘‘in eon- nection with work that would otherwise be performed’’ meaningless. Indeed, as the dissenter below pointed out, the panel majority has effectively transmuted a ‘‘mainte- nance of effort’? statute into an ‘‘enhancement of effort’’ statute. Unless reversed or clarified by this Court, the decision below will have a chilling effect on State and local partici- pation in Federal work-related grant programs during any vear in which, for any legitimate reason, the potential grantee has substantially reduced its level of expenditures from the preceding year. It is important to note that neither the Secretary nor the Seventh Cireuit majority be- low found that Milwaukee County had reduced its expendi- tures ‘‘in anticipation of’’ Federal assistance but rather that it had substituted Federal for non-Federal funds ‘‘in connection with work that would otherwise be per- 20 os formed.’’ Thus, regardless of the reason for loeal spend- ing reductions, a state or local government which initiates participation in a Federal work program during a year of reduced spending but not reduced work, will do so at the risk of being found to have substituted funds ‘‘in connec tion with work that would otherwise be performed.” (3) Effect of Cost-Efficiencies By adopting an approach to determining maintenance of effort violations that ignores the reasons for decreases in local program spending from year to year and that ig- nores the effects of cost efficiencies on program opera- tions, the decision below will operate to discourage that which should be encouraged: legitimate reductions in state and local government spending levels not attributable in fact to the availability of Federal assistance. With the advantage of hindsight, it is clear that Milwaukee County’s mistake, if there was one, was in creating a program for CETA-eligible welfare recipients akin to its loeally-funded program in the middle of a year when local expenditures were below the previous year’s, in large measure due to savings realized afier this Court decided National Leaque of Cities v. Usury, supra. As the dissenting opinion be- low pointed out, by requiring that these savings be reim- bursed to the Federal government, ‘‘the majority decision penalizes a community that effectuated cost-saving and cost-efficient programs for the benefit of welfare re- cipients and taxpayers as well.” (App., 39) Focusing as it does exclusively on comparative annual expenditures, the decision below vitiates the normal incentives to in- creasing productivity and cost-effectiveness for state and local governments participating in the manifold lederal 21 assistance program requiring maintenance of effort. It is hard to believe that this is what Congress intended by pro- hibiting ‘‘the substitution of Federal for non-Federal funds in connection with work that would otherwise be performed.’’ i) CONCLUSION For these reasons, a writ of certiorari should issue to review the decision and opinion of the Seventh Cireuit. Respectfully submitted, Rosert H. F'RIeBERT CHARLES D. CLAUSEN Davin P. Lowe Attorneys for Petitioner P.O. ADDRESS: Friesert, Finerty & Sr. Jonn, S.C. Two Plaza East - Suite 1250 330 East Kilbourn Avenue Milwaukee, Wisconsin 53202 (414) 271-0130 December, 1985 tice. App. 1 IN THE UNITED STATES COURT OF APPEALS FOR THE SEVENTH CIRCUIT No. 84-1067 Mi.wavukkeE County, Wisconsin, Petitioner, Wintuam EK. Brock, SECRETARY OF THE Unirep Stares DeparrMent or Lapor, Respondent. Gin ray Vv Petition for Review of an Order of the United States Department of Labor a o— ARGUED SEPTEMBER 20, 1984—Decipen AvucGust 6, 1985* ray MV Berore Escupacu and Correy, Circuit Judges, and Grant, Senior District Judge.** * On July 17, 1985, while a draft of this opinion was being cir- culated among all of the judges of this court in regular active service pursuant to Circuit Rule 16(e) because Section II had created a conflict with the decision of the United States Court of Appeals for the Third Circuit in Lehigh Valley Manpower Pio- gram v. Donovan, 718 F.2d 99 (3d Cir. 1983), and that of the United States Court of Appeals for the Ninth Circuit in City of Edmonds v. United States Department of Labor, 749 F.2d 1419 (9th Cir. 1984), the United States Court ot Appeals for the Sec- _ ond Circuit issued its opinion in St. Regis Mohawk Tribe, New ‘ = & v. Brock, No. 85-4042 (2d Cir. July 17, 1985) (Friendly, J.), ini Which it held that the 120 day limitation of CETA § 106(b) was not jurisdictional. The Rule 16(e) submission was, there- fore, withdrawn. ** The Honorable Robert A. Grant, Senior District Judge for the Northern District of Indiana, sitting by designation. App. 2 Kscusacn, Circuit Judge. This dispute arises out of the development aud administration by Milwaukee Coun- ty, Wisconsin (‘*County’’ or ‘‘Petitioner’’) of programs funded under the Comprehensive Employment and Train- ing Act (“‘CETA”’ or ‘‘Act’’), 29 U.S.C. §§ 801-999 (Supp. I] 1978). The County petitions for review of an order of the Seeretary of the United States Department of Labor (‘*Seeretary’’) in which it was determined, inter aliv that (1) in 1977 and 1978, the County has substituted appr-.ci- mately $1.2 million in federal CETA funds for County funds in violation of CEHTA ‘‘maintenanee of effort’? requirements; (2) the County, because of a violation of CHTA wage and benefit regulations, was required to perform a record review and provide backpay and benefits to former participants; (8) costs associated with 17 in- eligible CK'TA participants would be disallowed; and (4) a former County employee was entitled to backpay for wrongful discharge. In addition, the County now argues that the Secretary was barred from ordering relief be- cause he failed to observe the statutory time limits for the processing of claims against CETA grantees. For the reasons stated below, we grant in part and deny in part the petition for review. |. Procedural History This action arose from the consolidation of a series of complaints filed with the United States Department of Labor (‘‘DOL’’). The first written complaint was received by the DOL in February 1978. A second letter of com- plaint, containing 57 issues and signed by 22 persons, was received in May 1978. Most of the matters raised ir the initial complaint were alleged in more detail in the second complaint. A third complaint in December 1979 added 16 —— | App. 3 new allegations. Two additional and independent com- plaints were filed in May 1978 and Janaury 1980. These five complaints were subsequently consolidated with other individual complaints. The Grant Officer issued his initial determination on May 29, 1979. In response to a hearing request from the representative of one of the parties filed on December 11, 1979, the Office of the Administrative Law Judges ordered the Grant Officer to provide his final determination by December 30; the final determination was in fact issued on January 4, 1980. Hearings before tlhe ALJ began on August 4, 1980, and were coneluded on March 13, 1981, with the ALJ issuing his decision on December 5, 1988. This petition for review followed.! 1 The statutory source of our jurisdiction is 29 U.S.C. § 817(a) (Supp. Il 1978). The decision of the ALJ became the final de- cision of the Secretary under 20 C.F.R. § 676.91(f) (1983). CETA was originally enacted in 1973 as Pub. L. No. 93-203, 87 Stat. 839, amende: in 1974 by Pub. L. No. 93-567, 88 Stat. 1845, in 1976 by Pub. L. No. 94-444, 90 Stat. 1476, and in 1977 by Pub. L. No. 95-93, 91 Stat. 627, and substantially revised in 1978 by Pub. L. No. 95-524, 92 Stat. 1909. The Act was repealed, effective October 13, 1982, by § 184 of the Job Training Partner- ship Act (“JTPA”), Pub. L. No. 97-300, 96 Stat. 1322, 1357 (1982). However, JTPA § 181(e), 96 Stat. 1355, 29 U.S.C. § 1591(e), provides that the new legislation ‘shall not affect administra- tive or judicial proceedings pending on [October 13, 1982], or begun between [October 13, 1982,] and September 30, 1984, under [CETA].” Because the events that gave rise to this petition for review occurred before the effective date of the 1978 CETA amend- ments, the substantive provisions of the 1973 version of the Act, as amended prior to 1978, govern the resolution of this case. Unless otherwise noted, however, the procedural and remedial aspects of this action are controlled by the Act as amended in 7978. App. 4 ll. Jurisdiction Before considering the merits of the Secretary’s or- der, we address the threshold argument presented by Petitioner that, because the ‘‘final determination’’ of the Grant Officer was not issued within 120 days of the receipt of the initial complaint, the Seeretary was divested of Jurisdiction under § 106(b) of the Aet, 29 U.S.C. § 816(b) (Supp. IL 1978), and, therefore, was ‘‘barred from reecov- ering agaist the petitioner.’’ After a thorough exam- ination of the language of § 106(b), its legislative history, and the general purpose behind the 1978 amendments to the Act, we conclude that the 120-day limit of § 106(b) is not jurisdictional and, therefore, that the Seeretary had the authority to proceed against Petitioner? We would initially note the well-established canon of construction that a single provision will not be interpreted 2 In the context of this opinion, the term “jurisdictional” re- fers to a statutory requirement that, if not complied with by the agency, would divest that agency of all power to act on the matter and that would not allow for any consideration of, for example, equitable exceptions or prejudice to the litigants. A parallel in federal litigation would be a requirement (such as diversity) necessary to the district court’s subject-matter juris- diction. The term ‘‘mandatory” refers to a statutory requirement that the agency should attempt to comply with as a matter of course; however, the failure to comply does not automatically divest the agency of power to act, but may provide the litigants with, for example, the right to compel the agency to act. Cf. 5 U.S.C. § 706. The term “directory” refers to a statutory provision that is hortatory only and thus coniers no right on the litigants to compel agency action. Under the facts of this case, we need only determine wheth- er § 106(b) is “jurisdictional” and, therefore, we express no opinion on the question whether this provision is either ‘“man- datory” o» “directory.” App. 5 so as to defeat the general purpose that animates and informs a particular legislative scheme. See Bob Jones University v. United States, 461 U.S. 574, 586, 103 S. Ct. 2017, 2025-2 (1983); United States v. American Trucking Associations, Inc., 310 U.S. 534, 543-44, GO S. Ct. 1059, 1063-64 (1940). We, of course, do not substitute our judgment for that of Congress, but merely attribute to that legislative body a general overriding intent to avoid results that would undermine or vitiate the purposes of specific provisions. Cf. Sorrells v. United States, 287 U.S. 435, 447, 53 S. Ct. 210, 214 (1982). In addition, it is beyond dispute that the 1978 amend- ments to the Aet were ‘‘remedial’’ in nature, in that they were intended to give the Secretary greater power to prevent and correct the fraud and abuse that had devel- oped in CETA programs. See S. Rep. No. 891, 95th Cong., Yd Sess. 42-48 (1978). reprinted in 1978 U.S. Code Cong. & Ad. News 4480, 4522-23; H.R. Rep. No. 1124, 95th Cong., 2d Sess. 3, 5-6, 13 (1978); 124 Cong. Ree. 27,789 remarks of Sen. Bellmon), 27,223 (remarks of Sen. Nelson), 25,183 (remarks of Rep. Myers), 25,182 (remarks of Rep. Leh- man) 25,168 (remarks of Rep. Hawkins) (1978); see also 18 U.S.C. § 665; 29 U.S.C. §§ 816(d)(1), (e), (f), 825(g), 836 (Supp. II 1978). We acknowledge, of course, that the term ‘‘remedial’’ does not have talismanie significance in the construction of legislation. Cf. Zimmerman 'v. North American Signal Co., 704 F.2d 347, 353 (7th Cir. 1983). It does, however, affect the presumptions to be employed. With reference to the 1978 CETA amendments, we must in doubtful situations indulge in a presumption in favor of the Seeretary’s jurisdiction and will construe the Act accordingly. eee App. 6 Section 106(b) provides in relevant part: Investigation Of Complaints By Secretary Whenever the Secretary receives a complaint from any interested person or organization .. . which alleges, or whenever the Secretary has reason to believe . . . that a recipient of financial assistance under this chapter is failing to comply with the requirements of this chapter, the regulations under this chapter or the terms of the comprehensive em- ployment and training plan, the Seeretary shall in- vestigate the matter. The Secretary shall conduct such investigation, and make the final determination required by the following sentence regarding the truth of the allegation or belief involved, not later than 120 days after receiving the complaint. If, after such investigation, the Secretary determines that there is substantial evidence to support such allega- tion or belief that such a recipient is failing to comply with such requirements, the Secretary shall, after due notice and opportunity for a hearing to such recipient, determine whether such allegation or belief is true. It should be noted that §106(b), when read as a whole, is opaquely written and that the second sentence of the provision, when considered in isolation, seems to require a ‘*final determination’’ within 120 days of the receipt of the complaint. It should also be noted that § 106(b) does not expressly address the situation present- ed in the instant case, ?.e., the timing requirements for the final determination after the consolidation of numerous related complaints. The second sentence did not in fact appear in the original bill, but was proposed by Congressman Obey and added as an amendment during the floor debates on the 1978 amendments to the Act. 124 Cong. Ree. 25,230-31 (1978). The Obey amendment actually contained two (pp. 7 separate provisions. The first required that the prime sponsor reach a decision on a grievance within 60 days after the filing of the grievance; the second was the 120- day provision at issue in the instant dispute. After the reading of the amendments, the following colloquy oe- curred: Mr. OBEY. Mr. Chairman, I understand this amendment will be accepted by the committee. It is a very simple amendment. All it does is put a specific period of time in the bill during which the prime sponsor must answer a complaint lodged against it for violations of the conditions under which the CETA program exists in the first place, and also it estab- lishes a 120-day time limit on the time during which the Labor Department can consider a complaint be- fore it has to proceed. Mr. HAWKINS [sponsor of original bill}. Mr. Chairman, we have seen the amendment. We accept the amendment. If [Mr. OBEY) would further yield, do 1 under- stand from [him] that if the determination is not made in a specified time it shall not affect the Secre- tary’s jurisdiction in the matter? Mr. OBEY. That. is correet. Mr. HAWKINS. With that understanding we do accept the amendment. ld. Thus, it is clear from this exchange that the author of the 120-day provision and the sponsor of the original bill did not consider it jurisdictional in any way. Of course, these statements are not controlling; nevertheless, we find them highly persuasive. They were made by the ———rrrrereee App. 8 author of the amendment and the sponsor of the original bill on the floor of the House during debates on the bill. In addition, no contrary view of the jurisdictional effect of the amendment was expressed, no objection was voiced, and nothing in the record indicates that Congress may have had an intent different from that expressed in this exchange. We also find further support for our position in the general purposes of the 1978 amendments to the Act To ensure that CETA funds would not be diverted from their intended purposes, Congress sought to grant the Secre- tary ‘‘maximum authority to protect the integrity of the program.’’ S. Rep. No. 891, supra, at 21, reprinted in 1978 U.S. Code Cong. & Ad. News at 4501. It is also evident that Congress was aware that the DOL commanded in- sufficient resources to handle CETA investigations and that there was a backlog in the Department. See id. at 42, reprinted in 1978 U.S. Code Cong. & Ad. News at 4522; H.R. Rep. No. 1124, 95th Cong., 2d Sess., 3, 5-6, 18; see also 124 Cong. Ree. 31,021 (1978) (remarks of Rep. Maguire) ; id. at 31,026 (remarks of Rep. Collins). Thus, it would indeed be incongruous to conclude that Congress would have the Secretary divested ef jurisdiction under § 106(b) when he does not render his final determination within four months of the receipt of the complaint. Cf. Occidental Life Insurance Co. v. EEOC, 432 U.S, 355, 369-71, 97 S.Ct. 3. The congressional reports that refer specifically to the 120- day limit of the 1978 amendments are unilluminating, as they merely track the language of § 106(b) and offer no elaboration. See S. Rep. No. 891, 95th Cong., 2d Sess. 43, 80 (1978), reprinted in 1978 U.S. Code Cong. & Ad. News 4480, 4523, 4560; H.R. Conf. Rep. No. 1765, 95th Cong., 2d Sess. 123 (1978), reprinted in 1978 U.S. Code Cong. & Ad. News 4581, 4588. App. 9 2447, 2496-57 (1977). In addition, suen an interpretation would, in effect, give the DOL the power of ‘pocket dismissal (analogous to the President’s ‘‘pocket veto’’), a power entirely inconsistent with the duty to ferret out fraud and abuse in the CETA system. Furthermore, the argument for a jurisdictional bar is weakened by the fact that the Act does not specify the consequences of the Secretary’s failure to comply with the 120-day limit. See Thomas v. Barry, 729 F.2d 1469, 1470 0.5 (D.C. Cir. 1984) ; Usery v. Whitin Machine Works, Inc. 554 2d 498, 501 (Ist Cir, 1977); Tri-State Seceanteniathin: lune. v. Board of Govornors, 524 F.2d 562, 565-66 (7th Cir. 1975): Fort Worth National Corp. v. Federal Savinas & Loan lusur- ance Corp,, 469 F.2d 47, 58 (Sth Cir. 1972); ef. Zipes v. Trans World Airlines, Inc., 455 U.S. 385, 398-94, 102 S. Ct. 1127, 1132-33 (1982). The instant case vividly illustrates why the 120-day limit cannot be construed as jurisdictional. Counsel for Respondent informed this court at oral argument that this was the most elaberate and time-consuming CETA dispute to date. As noted above, the Grant Officer was confronted with over seventy separate ‘counts’ derived from a series of complaints that were filed over an approx imately two-year period. Of course, the proceedings before the ALJ are not included in the 120-day period * It should be noted that, under CETA § 106(b) and 20 C.F.R. § 676.86 (1984), the 120-day period begins to run from the date the Grant Officer receives a complaint filed after the exhaustion by the complainant of local administrative remedies. This in- itial complaint, of course, may be amended, clarified, or ampli- fied at any time during the proceedings and such modifications (Continued on following page) App. 10 We will refer to them, however, as they illustrate the complexity of this dispute. Petitioner described the hear- ing before the ALJ as follows: ‘‘This case, as presented to the ALJ, involved a great number of issues. Thirty-nine days were spent in evidentiary hearings, approximately 9,000 pages of transcript were generated, and hundreds of exhibits were offered and received.’’ Petitioner’s Brief at 4. The ALJ described the allegations presented as an ‘‘almost unmanageable conglomerate mass.’’ See also Peti- tioner’s Appendix at 68-69 (ALJ’s discussion of com- plexity of dispute and reasons for Grant Officer’s delay). His final order covered eighty single-spaced typewritten pages. The requirement of a final determination from the (Continued from previous page) relate back to the original filing date, 20 C.F.R. § 676.86(b)(7). The Grant Officer must first investigate the complaint and then issue an “Initial Determination” that there is or is not sufficient evidence to support the allegations of the complaint, id. § 676.86(c), § 676.88(a), (b); see also id. § 686.86(d)-(h). In this case, for example, the Grant Officer was obliged to conduct a lengthy investigation, which included interviews with approxi- mately 67 individuals. An opportunity for an informal resolution must then be provided, id. § 676.88(d). If the parties cannot resolve the dis- pute, the Officer must then issue a “Final Determination,” which shall (1) indicate the efforts undertaken to resolve infor- mally the matters contained in the initial determination, (2) list those matters upon which the parties continue to disagree, (3) list any sanctions and required corrective actions, and (4) inform the parties of their opportunity to request a hearing before an ALJ, id. § 676.88(e). It is this document that consti- tutes the “final determination” required within 120 days under § 106(b). See 20 C.F.R. § 676.86(a) (1); cf. id. § 676.86(a)(2). Thus, the final-determination process “consists of the non-criminal investigation, the determination of substantial evidence (either supporting or not supporting the allegations of the complaint _..), and the procedures regarding notice, informal resolution or lack of informal resolution, and notice of opportunity for hearing,” id. § 676.86(a)(1), under the Act, but does not include subsequent proceedings before the ALJ. App. 11 Grant Officer in 120 days under these facts would be a practical impossibility at best, and the effeet of such a construction would be to remove completely disputes of this kind from the Seeretary’s jurisdiction and to ex. tinguish absolutely the claims of innocent complainants, even though they were in no way untimely or at fault in initiating the action. Thus, we conclude that the 120-day limit is not jurisdictional, for such a construction would be inconsist- ent with the purpose of the 1978 amendments and would frustrate the intent of Congress to accord the Secretary ‘‘maximum authority’’ to control abuse and fraud in CETA programs. In addition, we believe that the 120-day limit was intended to benefit claimants by ensuring that their claims would be resolved expeditiously. If jurisdiec- tional, the limit would impose a paradoxical hardship on claimants by destroying their claims if the Secretary does not act expeditiously. In effect, timely claims would be de- feated by the Secretary’s failure or inability to process those claims. Our conclusion is not only supported by the specific cirevmstances of the 1978 CETA Amendmenis, but also by the general rule that agency action should not be set aside for delay, see, e.g., NLRB v. International Asso- ciation of Bridge, Structural & Ornamental Ironworkers, — U.S. —, 104 8S. Ct. 2081 (1984) (Administrative Pro- cedure Act and National Labor Relations Act); NLRB v. J.H. Rutter-Rex Mfg. Co., 396 U.S. 258, 263-66 & n.3, 90 S. Ct. 417, 420-21 & n.3 (1969) (same); Garvey Grain Co. v. Director, 639 F.2d 366, 368 n.3, 372 (7th Cir. 1981) (Longshoremen’s and Harbor Workers’ Compensation Act); Ralpho v. Bell, 569 F.2d 607, 626-28 (D.C. Cir. 1977) (Micronesian Claims Act of 1971); Usery v. Whittin Ma- App. 12 chine Works, Inc., 554 F.2d 498, 501-03 (1st Cir. 1977) (Trade Act of 1977); sce also Chromeraft Corp. v. EEOC, 465 F.2d 745 (5th Cir, 1972) (Administrative Procedure Act); ef. Logan v. Zimmerman Brush Co., 455 U.S. 422, 102 S. Ct. 1148 (1982); ln re Grand Jury Proceedings, 757 I’.2d 108, 110-12 a1 (7th Cir.) (30-day limit of 28 U.S.C. § 1826(b) not jurisdictional), cert. denied, — U.S. —, 100 8S. Ct. 2025 (1985), as the contrary rule would place the adverse consequences on the specific beneficiaries of the legislation and on federal taxpayers generally and would allow the alleged wrongdoer to escape liability merely because of a procedural default on the part of the ageney. We note that the Court of Appeals for the Third Cireuit, in Lehigh Valley Manpower Program v. Donovan, 718 F.2d 99 (8d Cir, 1983), has considered the effect of the Grant Officer's failure to comply with the 120-day limit of §106(b). Although it did not expressly denominate § 106(b) as ‘‘jurisdictional,’’ the Third Cirenit did hold that the Grant’s Officer's failure to comply with that pro- vision divested the Secretary of all power to act and that the question of prejudice to the litigants was irrelevant. The Secretary’s order was then set aside. Thus, in the context of this decision, see supra note 2, the court. in Lehigh construed § 106(b) as ‘*jurisdictional.’’ Given our own independent analysis of the question, we decline to follow the Lehigh decision. The Third Cireuit examined the language of § 106(b), but did not consider its legislative history or the general purpose of the 1978 amendments, even though the court acknowledged that the ‘‘[i]nsertion of the Obey amend- ment... resultfed] in a somewhat garbled provision.’’ 718 F.2d at 101. In addition, the court placed great weight on Wiis tistics saat Mie App. 13 the DOL’s ineorporation of the 120-day limit into the CHTA regulations. See e.g., 20 C.F.R. §§ 676.86(a) (1), (c), 676.88(e) (1983). The agency, according to the Third Circuit, was bound by its own procedural rules. This is, of course, usually the case, but the threshold question, which the court in Lehigh did not exhaustively examine, is whether the regulations were consistent with their statu- tory source, as it is the enabling legislation that deter- mines the scope of any corresponding regulatory provi- sion. More recently, the Court of Appeals for the Ninth Circuit, in City of Edmonds v. United States Department of Labor, 749 F.2d 1419 (9th Cir. 1984), has expressly held that § 106(b) is jurisdictional. See also Pierce County v. United States, 759 F.2d 1598 (9th Cir. 1985). For the most part, the court in “dmonds simply adopted the rea- soning of the Lehigh decision. In addition, the court in Edmonds, focusing on the use of the word ‘‘shall’’? in § 106(b), conclude that this term was generally ‘* manda- tory’’ and stated that there was no reason to depart from this interpretation, The court relied in part in reaching its conclusion on the Supreme Court’s decision in Mohasco Corp, v. Silver, 447 U.S. 807, 100 S. Ct. 2486 (1980), which construed the use of the term ‘‘shall’’ in 49 U.S.C. § 2000e-5(c) and (e) to 5 As indicated in the text, after our own independent analysis, we have concluded that § 106(b) is not jurisdictional. If 20 C.F.R. §§ 676.86 and 676.88 could only be read as imposing a jurisdictional requirement, we would also find that they con- travene § 106(b) and were, therefore, invalid. However, as these regulations merely follow the language of the statute, they must be construed as imposing a time limit that is no more onerous than that of § 106(b) itself. Thus, the Grant Officer’s failure to comply with the DOL’s regulations did not divest the Secretary of jurisdiction. App. 14 impose a mandatory requirement of filing a charge with the EEOC within the statutory time limits. We, of of course, can distinguish Mohasco on the ground that § 2000e-5(e) deals with the filing of a charge by an ag- grieved employee, which does not correspond to the situa- tion presented by CETA §106(>), where the claimants have filed a timely claim and uoniy the decisionmaker is re- sponsible for the delay. However, cases subsequent to Mo- hasco provide a definitive response to the Edmonds deci- sion. It is true that the Court in Mohasco found the filing requirement to be mandatory. It does not follow, however, that all ‘‘mandatory’’ requirements are ‘‘jurisdictional.’’ The Mohasco decision itself is ambiguous on the jurisdic- tional guestion. Compare 447 U.S. at 811-12, 100 S. Ct. at 2490 with ad. at 811 n.9, 100 8. Ct. at 2490 n.9. Any ques- tions concerning the character of § 2000e-5(e), however, were unequivocally dispelled in Zipes v. Trans World Air- lines, Inc,, 455 U.S. 385, 393, 102 S. Ct. 1127, 1132 (1982), in which the Supreme Court held that ‘‘filing a timely charge of discrimination with the EEOC is not a jurisdictional prerequisite to suit in federal court, but a requirement that, like a statute of limitations, is subject to waiver, estoppel, and equitable tolling.’’ The Court did not simply rely on the use of the term ‘‘shall,’’ but considered the specific context in which it appeared and concluded that the imposition of a jurisdictional requirement would be inconsistent with the legislative history and the remedial purposes of Title VIL. The Zipes decision aptiy illustrates that no universal legislative lexicon has yet been developed and that the App. 15 courts, therefore, must consider each provision against the background of its enactment. Cf. Wirtz v. Local 153, Glass Bottle blowers Ass’n, 389 U.S. 463, 468, 88 S. Ct. 643, 646 (1968). The legislature’s use of terms such as ‘‘shall’’ and ‘‘must,’’ rather than ‘‘may,’’ does not automatically re- quire that the provision be construed as mandatory, muck less jurisdictional. A variety of factors must be con- sidered, including whether such a construction would pro- duce an absurd or unnecessarily harsh result. See Bar- tholomew v. United Staies, 740 F.2d 526, (7th Cir. 1984) ; Ralpho v. Pell, 569 F.2d 607, 626-28 (D.C. Cir. 1977); see also Walsh v. United States, 723 F.2d 570, 873-74 (7th Cir. 1983) (‘‘may’’ construed as mandatory); Thompson v. Clifford, 408 F.2d 154, 158-60 (D.C. Cir. 1968) (same). In the context of § 106(b), such an interpretation would lead to ‘‘absurd’”’ and ‘‘harsh’’ results, in the sense that it would undermine the general purposes of the 1978 CETA amendments described above and the evident purpose of the 120-day limit itself. In conclusion, the Grant Officer’s failure to comply with the 120-day deadline of §106(b) did not divest the DOL of jurisdiction over this dispute. We will now con- sider the merits of the Secretary’s decision. Ill. ‘‘Maintenance of Effort’’ Violations® As authorized by state law, the County has, since the 1930’s, maintained some form of work relief for general- 6 Pursuant to Fed. R. App. P. 17(b), the DOL filed a certified list with this court in lieu of the administrative record. Although the party seeking review is ordinarily responsible for assembling the record, Trotter v. Klincar, 748 F.2d 1177, 1184 n.8 (7th Cir. 1984), Rule 17(b) represents a departure from this allocation of responsibility, see J. Moore, B. Ward & J. Lucas, 9 Moore’s Fed- eral Practice 9] 217.02[1], |3] (2d ed. 1982). (Continued on following page) App. 16 assistance recipients. See Wis. Stat. § 49.002. During the 1970’s, this program was known as the Pay for Work Program (‘‘PFWP’’) and, prior to 1977, it provided 550 to 750 minimum-wage positions, primarily within the county government, for individuals who would otherwise be re- ceiving cash welfare grants. Both the general-assistance program and the PF WP programs were funded by County revenues. During the period under consideration, Petitioner made the following expenditures for PF WP: YEAR EXPENDITURE 5 een nt $2,335,996 rr | ere $3,014,580 OT ce 2,097,428 en soccsilcasie ata $ 333,277 (Continued on following page) We acknowledge the value of Rule 17(b) in that it allows parties seeking review of agency action to forego the expense associated with filing and transcribing the complete adminis- trative record when an examination of the entire record may not be necessary. Nonetheless, although technically permissible, the filing of a certified list may be inappropriate, especially if the Petitioner challenges the evidentiary basis of the agency’s rulings. If the Petitioner is relying on some portion of the rec- ord, it should at least provide it in an appendix to the court. In any event, the County does not, for the most part, dis- pute the Secretary’s findings of fact, but rather the application of the relevant legal rules to those facts. To the extent that the County disagrees with the Secretary’s findings, we have deter- mined that these facts are not material to the resolution of this dispute. Thus, we have proceeded to consider the Secretary’s order on the basis of the briefs and appendices filed with this court. App. 17 | Petitioner also made the following expenditures on general-assistance grants: YEAR EXPENDITURE 1976 $8,705,256 1977 $8,818,328 Petitioner had originally budgeted for 1977 over $4.2 million for PF WP in order to expand the program to 1200 positions. This goal, however, was never achieved. The initial budget for general assistance for the same year of $3.1 million was substantially less than the amount ac- tually spent in 1976. The ALJ in fact found that the 1977 budget had been set at an ‘‘unrealistically low’’ level. In early 1977, it became apparent that the original budget for the general-assistance program was inadequate. The County transferred during the latter half of 1977 $2.2 million from PF WP and $1.25 million from the County contingency fund to general assistance and _ ultimately spent $8.8 million for general assistance. By the middle of 1977, however, PF WP had approximately 682 participants and a ‘‘backlog’’ of 2,000 individuals who were eligible for the program, but for whom positions were not available. During the first half of 1977, the County began planning for a new CETA program that would provide training and work experience to individuals eligible for general assistance, /.e., the same class of individuals served by PF WP. The result was the creation of two new CETA programs. The first, Learn-to-EKarn (‘‘LTE”’’), which be- gan in June 1977, was a training program in job-search skills and was funded under Title I of the Act. The original budget for LTE was $1,022.311 for the period from June 7, 1977, to December 31, 1977. The second, App. 18 Handicapped Serving the Hardicapped (‘‘HSH?’’), pro- vided work-experience and _ public-service employment positions in sheltered workshops and was funded under Title VI of the Act. The original budget for HSH was ‘2,409,624 for the period from July 1, 1977, to June 30, 1978. By the end of 1977, 571 general-assistance eligibles were enrolled in the work-experience segment of HSH. In early 1978, LTE and HSH were combined and renamed the Work Assistance Program (‘‘WAP”’’). Addi- tional funding was obtained under Titles II (publie service employment) and III (youth employment) of the Act, and from the County. WAP, like its predecessors LTE and HSH, was to benefit the general-assistance population. Although it is not essential to the resolution of this dispute, there are indications that, during the second half of 1977, participation in PF WP began to decline and that the County apparently reduced its referrals to PF WP and began to refer eligible general-assistance applicants to the CETA programs. Thus, it would appear that, in January 1978, when the County transferred PF WP to the CETA Work Assistance Program, the number of partici- pants in the County-funded program was below 682. The Grant Officer found that, because PF WP was discontinued in January of 1978, the County’s ex- penditures in 1977 should be used as the benchmark in determining whether a violation of the CETA mainte- nance-of-effort provisions had occurred. Thus, since the total amount of non-federal funds expended for work- experience positions for general-assistance eligibles in 1978 was greater than the corresponding amounts for 1977, the Grant Officer found no violation. | App. 19 The Secretary reversed this portion of the Final De- termination. He first rejected the Grant Officer’s reason- ing as too superficial, because it did not account for the fact that CETA funds were initially expended in 1977. After finding that WAP was the functional replacement for PFWP, in that both programs provided work- experience positions for the general-assistance population in lieu of cash grants, the Secretary concluded that this replacement began in 1977, when CETA funds were first used for the LTE and 1ISH programs. He also found that: The record leaves absolutely no doubt that the major purpose of the WAP was to save County tax levy dollars previously spent on both General Assist- ance and the PF WP by creating a new employment and training program for General Assistance eligibles to be supported by Federal CETA dollars. The Secretary concluded that Petitioner had violated the maintenance of effort provisions in that it failed to maintain its funding in 1977 and 1978 (when these CETA programs were first implemented) at the 1976 level and that the substitution of CETA funds resulted in the substitution of federal for non-federal funds ‘‘in con- nection with work that would otherwise be performed.”’ The year 1976 was chosen as the base year for comparison, because this was the most recent year during which no CETA money was expended for work-experience positions for the general-assistance population. Thus, the extent of the substitution was determined in the following manner: NON-FEDERAL YEAR EXPENDITURES “SHORTFALL” Cea $3,014,580 N/A ee $2,097,428 $ 917,152 ee $9 732,487 $ 282,093 TOTAL: $1,199,245 App. 20 The County was, therefore, ordered to pay $1,199,245 in disallowed costs to the DOL. CETA contains a number of ‘‘maintenance of effort’? provisions designed, in general, to require CETA grantees to use CHTA funds to create new employment and train- ing opportunities, to guard against the displacement of current civil-service employees, and to ensure that federal grants are not substituted for local funding of the same jobs or public services.’ Certain provisions prohibit ‘‘the substitution of Federal for other funds in connection with work thai would otherwise be performed.’’® Section 605(b) of the Act® states that ‘‘{nJo funds for publie service employment programs under this chapter may be used to provide publie services, through a private or nonprofit organization or institution, which are customarily pro- vided by a State, a political subdivision, or a loeal eduea- tional ageney in the area served by the project.’’ Other provisions prohibit) the substitution of federal for nonfederal funds." 7 See generally CETA § 205(c)(8), (25), 29 U.S.C. § 845(c)(8), (25) (1976); CETA § 208(a)(1), 29 U.S.C. § 848(a)(1) (1976); CETA § 353(a), (b)(1)-(6), 29 U.S.C. § 895b(a), (b)(1)-(6) (Supp. | 1977); CETA § 602(c), 29 U.S.C. § 962(c) (1976); CETA § 605(b), 29 U.S.C. § 965(b) (1976); CETA § 703(7), (11), 29 U.S.C. § 983(7), (11) (1976); see also 29 C.F.R. §§ 96.24, 97.334, 97.719, 99.34 (1978). 8 See, e.g., CETA § 208(a)(1)(C), 29 U.S.C. § 848(a}(1)(C) (1976); CETA § 353(b)(3), 29 U.S.C. § 895b(b)(3) (Supp. | 1977); CETA § 602(c), 29 U.S.C. § 962(c) (1976); CETA § 703(7), 29 U.S.C. § 983(7) (1976); see also 29 C.F.R. § 99.34(b)(3) (1978); cf. CETA § 205(c)(25), 29 U.S.C. § 845(c)(25) (1976). ® 29 U.S.C. § 965(b) (1976). 10 See, e.g., CETA § 205(c)(25), 29 U.S.C. § 845(c)(25) (1976); CETA § 703(11), 29 U.S.C. § 983(11) (1976). App. 2 The County does not dispute the factual findings of the Secretary, and its attack is a narrow one that is limited to the finding that the use of CE'TA funds resu!ted in the substitution of federal for non-federal funds ‘*in connection with work that would otherwise be per- formed.’’ Petitioner argues that the Secretary mis- construed the maintenance-of-effort provisions. The County’s position is, in essence, that there was no ‘‘ work that would otherwise be performed”? that was affected by Petitioner’s expenditure of CITA funds in 1977. Petition- er claims that no PE WP participant was transferred out of that program in 1977; it does concede, however, that ‘certain CET A-eligible welfare recipients on the ‘[PF WP] backlog’ were enrolled in the CE'TA-funded [LTE] and [ISH] programs.’’ Petitioner maintains, how- ever, that, since these 1977 participants had not previously been working in a County-funded program, their enroll- ment in the CETA programs ‘‘cannot be viewed as sub- stituting federal for ether monies in connection with work that would otherwise be performed.”’ Petitioner’s position represents a misreading of the maintenance-of-effort provisions and their implementing regulations, as well as a misunderstanding of their pur- pose. These statutes are phrased in the conditional, yet Petitioner would have them reach only work that ‘*was heing performed,’’ not work that ‘‘would otherwise be performed.’’ Congress intended that CETA funds supple- ment, not replace, non-federal funding. See Maine v. United States Department of Labor, 669 F.2d 827 (1st Cir. 1982). A requirement of a ‘‘maintenance’’ of effort is meaningless unless a benchmark is available to determine the appropriate level of the ‘‘effort.’? In addition, even App. 22 Petitioner’s own argument is an acknowledgment that the inquiry must focus, not on the number of individuals in a given program, but on the level of funding and that a ‘*benchmark’’ must be initially established. The crucial issue, then, is whether 1976 or 1977 is the appropriate year for determining the level of the County’s ‘‘effort.’’ Thus, the question of whether there was participant ‘‘attrition”’ in PF WP during 1977 is, under these facts, of little moment, as it is the level of funding, not the number of participants, that is dispositive. We agree with the Secretary’s conclusion that, although Petitioner was entitled to use CETA funds to provide training and work experience for the general- assistance population, it was at the same time required to maintain its local funding for substantially equivalent County programs at the level of the most recent year in which no CETA money was expended for these purposes. Thus, 1976 provides the proper reference point. Had the County maintained its funding at the 1976 level, some portion of the work-experience positions and public serv- ices provided by LTE, HSH, and WAP would otherwise have been funded by non-federal money. Because the County did not, work and services were performed as a result of the substitution of federal funds for non-federal funds. In its reply brief, Petitioner counters with the argu- ment that its reduction of the 1977 PF WP budget was not due to the decrease in the number of participants or substitution of federal for non-federal funds, but to the fact that, after the Supreme Court’s decision in National League of Cities v. Usery, 426 U.S. 833, 96 S. Ct. 2465 App. 23 (1976), overruled, Garcia v. San Antonio Wetropolitan Transtt Authority, — U.S. —, 105 S. Ct. 1005, 1021 (1985), the County decided to reduce the PF WP emplovees’ wages and hours below the minimum federal requirements, In 1976, the County paid $2.20 an hour for a 40-hour work week; in 1977, the County paid $2.00 an hour for a 32-hour work week. Thus, assuming that the same number of employees, t.e., 682, was participating in PF WP in 1976 and 1977 and that those employees worked 52 weeks a vear, the County was able to “save” $851,186 in 1977." We initially note that this figure represents only 93% of the “shortfall” found by the ALJ for 1977 and only 71% of the total deficiency for 1977 and 1978. Moreover, this second argument suffers from the same fundamental de- ficiency as the first, fur the relevant question under the maintenance-of-effort provisions is not the number of positions, but the level of non-federal funding before and after the use of CETA funds. It is clear from the werding of these statutes that Petitioner cannot discharge its obligations under CETA by simply retaining the same number of employees at a reduced annual salary while using CETA funds to provide employment for similarly situated individuals. Following Petitioner’s argument to its logical extension would mean that, if the National League of Cities decision had allowed the County to pay $1 1! As noted above, the record does not necessarily support the conclusion that 682 participants remained in the PFWP through- out 1977. We will assume for the sake of argument that this level was maintained. We also note that the County, presumably because of an inadvertent mathematical error, overstated in its reply brief the amount of this “savings” by 80°/o (i.e., $682,000). App. 24 a year to each PF WP participant, then the County would have discharged its obligations under CETA had it allo- cated only $682 of County funds to PF WP in 1977. : Quite to the contrary, we find that the National League of Cities argument further undercuts Petitioner’s position: in view of the availability of CETA funds, the proper response to the wage-and-hour reduction after National League of Cities would have been the creation of more PF WP positions, especially in view of the backlog of eligible applicants in 1977. The County did in fact originally intend to expand PF'WP in 1977 with a consid- erably larger budget, but subsequently reduced the pro- gram with substantial transfers from PFWP to the general-assistunce program after it was known that CETA funds were available. The National League of Cities decision may justify the wages and hours of PF WP par- ticipants in 1977, but it does not explain why the original 1977 PF WP. budget of $4.2 million was ultimately reduced to $2 million when approximately $2 million were spent in the CETA programs in 1977. We have considered all of the remaining arguments raised by Petitioner in its challenge to the Secretary’s finding of a violation of the maintenance-of-effort pro- visions and have found them to be without merit. In conclusion, we agree with the Secretary’s finding that Petitioner did not meet its obligation under the mainten- ance-of-effort provisions of the Act and that the “short- fall” for 1977 and 1978 should be disallowed. IV. Wage and Benefit Review Regulations for CETA Titles I and VI that were in effect from the inception of the County’s CETA programs App. 25 in mid-1977 to April 1, 1979, provided that wages and benefits for work-experience participants were to be commensurate with such factors as the type of work per- formed, the skill proficiency of the participant, the geo- graphic region of the program, and the prevailing wages and benefits for similarly employed employees. See 29 C.F.R. §§ 95.33(d)(4) (viii), 96.34, 98.24(b), 99.37(e) (1978).'2 However, the base wage provided by the County for work-experience participants in WAP was set at the federal minimum wage. In his Initial and Final Determinations, the Grant Officér concluded that Petitioner had violated CETA regulations by paying only minimum wage and by not providing the proper benefits. The initial corrective ac- tion proposed was an order to the County to classify all work-experience positions in WAP by the factors enumer- ated in the applicable regulations, to determine the proper wages and benefits under the regulations, and to submit the results to the DOL’s regional office for review. The Final Determination modified this remedy to require that the County first notify all former CETA participants, by newspaper notices and mailings, to submit claims if they believed they were underpaid. A representative of the employees could also submit specific documentation on individual participants. The claims would next be re- viewed by an outside ageney, which would then notify each participant of the results of the review and of the right to appeal to the Office of Administrative Law Judges. Costs for the record review, back wages, and benefits could be paid from CETA funds. 12 20 C.F.R. § 676.26-1(b) (1984), which became effective on April 1, 1979, see 44 Fed. Reg. 19,990, 20,014 (1979), allowed the payment of the minimum wage to almost all work-experience participants. App. 26 The County did not appeal this portion of the Final Determination and has thereby coneeded liability; the complainants, however, in the proceedings before the ALJ, did contest the corrective action ordered by the Grant Officer on the ground that the burden of determining the proper wages and benefits should be borne by the County, not by the individual CETA participants. The ALJ found that the record lacked the type of ~ detailed information needed to allow him to establish the proper wages and benefits for each of the approximately 5,400 individuals enrolled in the County’s CETA programs between July 1, 1977, and April 1, 1979. He also concluded that the corrective action ordered in the Grant Officer’s Initial Determination was more appropriate than that of the Final Determination. He found that a requirement of computation of the appropriate earnings prior to notifica- tion to former employees was necessary because this placed “the burden of evaluating jobs and calculating wages on the prime sponsor, which could have avoided the problem by following the regulations in the first place, and which has better access to the necessary information than former participants.” Thus, the ALJ ordered that the County classify all CE'’TA work-experience positions ae- cording to the factors enumerated in the regulations, de- termine the proper wages and benefits, and submit the results to the regional DOL office for review within 60 days of the date of his decision. The DOL office would then have 30 days to review these submissions and the County would have 30 days thereafter to compensate all underpaid former CETA participants that could be located. If, due to changed cireumstances, federal funds were not available for the back wages, the benefits, and the expenses associated with the record review, the County was required App. 27 to defray these costs from its own funds. The Final De- termination was affirmed in all other respects. In its petition for review, the County contests the corrective action ordered and argues that the Secretary’s requirement of a comprehensive wage review was an abuse of diseretion and not in aecordance with the applicable law. We concur in the Seeretary’s observation that the County, with superior access to the records and as the party at fault, should bear the costs of the record review. Furthermore, we recognize that, given the characteristics of the class of former CETA employees, it is unreasonable to assume that they will be able to recognize independently whether they are entitled to additional compensation. Nonetheless, it is not obvious that the appropriate solution is to require Petitioner to complete the record review for all former participants when a substantia] num- ber of them will never be located. The former employees bear the burden of coming forward after they have received notice whether the record review is performed before or after the notification. However, undertaking the revicw before notification would require Petitioner to perform many costly calculations that will never be used, when the goal of the record review is to provide the proper com. pensation to the former CETA participants at a reason- able cost to all parties involved. Thus, to the extent that the Secretary’s order requires Petitioner to incur substan- tial expense in undertaking the wage review” prior to 13 At oral argument, the County represented to this court that the wage review cannot be accomplished solely by computer analysis en masse of the information the County now has at its disposal and that the determination requires an examination of the individual records for each former participant. We do not understand the Secretary to argue to the contrary. In fact, at oral argument, counsel for the DOL stated that the Secretary would not object if notice were provided prior to the record review. App. 28 notification when it is almost certain that, despite reason- able efforts at notification, a considerable number of for- mer CETA participants will never be located, we agree that the remedy constitutes an abuse of discretion. We conclude that notice should first be sent to the participants and that the reeord review should then be performed for those individuals who come forward. To that extent, we reinstate the corrective action set forth in the Grant Of- ficer’s Final Determination. We note, however, that the Final Determination re- quired that the County notify all CETA participants to submit claims if they believed they were wnderpaid. This places an iiappropriate burden on the participants, as it calls for a threshold determination on their part that they are in fact entitled to additional compensation. Thus, the initial notice must simply instruct those individuals who participated in CETA programs during the relevant period to come forward; the records of the individuals who are located will then be analyzed by Petitioner. The Secretary should determine the proper form of notice to be sent to the former CETA employees and set the appropriate procedure and schedules for the subsequent record review and reimbursement. | We have considered all of the remaining arguments raised by Petitioner in its challenge to the reeord review and have found them to be without merit. In conclusion, this portion of the Secretary’s order is remanded for ac- tion consistent with this opinion. V. Disallowed Costs under CETA Title VI The Secretary found, and Petitioner does not dispute, that 17 WAP participants were originally enrolled under App. 29 CETA Title VI following their transfer from PFWP in 1978 when they were in fact ineligible under that Title. The County, however, claimed that any initial misalloca- tion was “cured” when the costs associated with these participants were subsequently “backed out” of Title VI and applied to Title I, under which the participants were eligible. The Secretary rejected this argument: [EF }ligibility determinations should be made before a participant is enrolled in CETA and the key eligibility question is whether, at the time of application, a par- ticipant is eligible for the title in which he or she is then enrolled. See 29 CFR 99.42(a)(1). Adjustments of the type made here by the prime sponsor cannot retroactively create eligibility. Moreover, any at- tempt to do so would be contrary to the cost principles of Federal Management Cireular 74-4... , codified at 41 CFR Subpart 1-15.7, incorporated by reference in the CETA regulations at 29 CFR 98.12(a). Aceord- ing to 41 CFR 1-15.703-2(b): “Any cost allocable to a particular grant or cost objective under the principles provided for in this subpart may not be shifted to other Federal grant programs to overcome fund deficiencies, avoid restrictions imposed by law or grant agreements, or for other reasons.” (emphasis in original) Thus, Petitioner was ordered to pay the DOL the amount of the disallowed costs for these 17 participants. The County’s argument is unpersuasive, and its cur- sory description of the proceedings below has not aided our review. In addition, there are no citations to the record on the issue of cost allocation. We, therefore, have no information regarding the eryptic allusions to the sub- sequent “backing out” of the costs associated with these 17 individuals. App. 30 In any event, as we understand its contentions, the County, with no citation to authority, maintains that, al- though these individuals were initially improperly enrolled under Title VI when thev were eligible under Title I, the “backout” of costs was “a bookkeeping or accounting prac- tice used to cure a bona fide human error in participant enrollment, and not an evasive act designed ‘to avoid re- 999 strictions imposed by law.’” so that the costs should not be disallowed. We disagree. CETA Titles I and VI had different eligibility criteria. Compare 29 C.F.R. § 95.382 (1978) (Title 1) with id. § 99.42 (1978) (Title VI). The requirements of Title VI were more stringent. For example, under 29 C.F.R. § 99.42(a) (1) (ii), the participant (1) must have been unemployed or receiving unemployment compensation for 15 out of the 20 weeks preceding his application and (2) must not have obtained permanent, unsubsidized, full-time employ- ment during that 20-week period. We gather from the ALJ’s decision that he relied on the employee-record eval- uation described in the affidavit of Helen Humphrey, a “Manpower Development Specialist” for the DOL. With reference to the 17 individuals under consideration, Ms. Humphrey, because of the County’s inadequate documenta- tion, found that none of these participants met the require- ment of 29 C.F.R. § 99.42(a) (1) (i1). 29 C.F.R. § 99.43(a) (1978) provides that “[{p]rime sponsors shall be liable for any payments made to partici- pants determined ineligible during program audits or re- views or otherwise.” See also 29 C.F.R. §§ 96.25, 99.42(¢) (1) (1978). 29 C.F.R. §99.43(b) and (¢) set out proced- ures that would allow prime sponsors to “protect their liability [sie].” See also 20 C.F.R. § 676.88(¢e) (1983). App. 31 Petitioner has in no way indicated that it followed those procedures with reference to these 17 participants. Al- though disallowance ef the costs may appear inflexible, the regulations discussed above set out the limited cireum- stances under which the County may escape liability. Otherwise, it bears the risk that the associated costs will be disallowed. The County is essentially arguing that it is “unfair” to impose this sanction. Although the regula- tions do not suggest that equitable exceptions are avail- able, we need not decide this question, as the equities clearly do not weigh in the County’s favor. We, therefore, affirm the ALJ’s decision that the costs associated with these 17 individuals be disallowed. VI. Backpay Award to Cheryl Tucker Ms. Tucker, a former PF WP staff mamber, was laid off on May 8, 1978, due to the termination of that pro- gram, and maintained no further communications with Petitioner. The Secretary noted that it was undisputed that Ms. Tucker was laid off due to the dissolution of the County-funded PF WP, which was replaced by the CH TA- funded WAP, and thus concluded that the layoff was a displacement of a currently employed worker in violation of the maintenance-of-effort and anti-displacement pro- visions of the Act. The County was erdered to take affirmative steps to locate Ms. Tucker, to offer her rein- statement to a comparable position, and to award her backpay plus interest from non-CETA funds; however, the County could offset against this award, upon proof sub- 4 See, e.g., CETA § 208(a)(1)(B), 29 U.S.C. § 848(a)(1)(B) (1976); § 353(b)(2), 29 U.S.C. § 895(b)(2) (Supp. | 1977); § 602(c), 29 U.S.C. § 962(c) (1976); § 703(7), 29 U.S.C. § 983(7) (1976); see also 29 C.F.R. § 99.34(b)(2) (1978). App. 32 mitted to the Grant Officer, any amounts of wages earned by Ms. Tucker or of general assistance paid to her by the County after her layoff. The County does not contest the finding of liability and apparently does not challenge the reinstatement order. [t does maintain, however, that (1) the award of backpay should be remanded to the DOL due to the absence of findings on the extent of Ms. Tucker’s injury and on her efforts to mitigate those damages and (2) the Secretary improperly limited the seope of offsetting payments for the backpay award. Once again, there is little reliance on relevant legal authority and xo citation to the record in the County’s brief. Because Ms. Tucker was terminated without cause in violation of the maintenance-of-effort and anti-displace- ment provisions of the Act, there is no serious question that backpay was an appropriate remedy. See City of Chicago v. United States Department of Labor, 753 ¥.2d 606, 607-08 (7th Cir. 1985). It is, of course, unreasonable under these circumstances to require that the Secretary set an exact amount on the backpay award, as this liability continues to acerue until reinstatement. In any event, the Secretary intended that a calculation of the precise amounts be made by the parties, with the aid of the Grant Officer, if necessary. 1S The Secretary represented to this court at oral argument that Ms. Tucker has recently been in communication with the County, that she has been reinstated with the County, and that she is in the process of transmitting information to the County with regard to the income she had earned since her layoff. The Secretary has also suggested that Ms. Tucker has not been rein- stated at the appropriate level; that question is not, however, before us. Similarly, the issues raised in the amicus brief filed by the Worker Rights Institute and John Kropp are not prop- erly before us. App. 33 The County had the burden of proving that Ms. Tucker failed to make reasonable efforts to mitigate her damages. Cf. Hanna v. American Motors Corp., 724 F.2d 1300, 1306- O07 (7th Cir.), cert. denied, 104 S. Ct. 3512 (1984); Syvock v. Milwaukee Boiler Manufacturing Co., Inc., 665 F.2d 149, 159 (7th Cir. 1981); NURB v. Nickey Chevrolet Sales, Inc., 493 F.2d 108, 107-08 (7th Cir.), cert. denied, 419 U.S. 834 (1974). Petitioner, however, has in no way indicated that it attempted to locate Ms. Tucker in order to determine the extent of her damages or her efforts at mitigation. In view of the County’s concession of liability and its fail- ure of proof, a remand on the issue of imitigation is in- appropriate in this protracted dispute. Finally, we perceive no deficiency in the scope of the payments that may be offset against the backpay award. Petitioner has cited no authority in support of its position and we find that the Secretary’s order was reasonable. As the County is at fault, it would be inappropriate to allow it to offset funds paid to Ms. Tucker by other governmental entities, as these payments would constitute benefits from a eollateral source and deducting them would in effect relieve the County of its obligation to make the former employee whole. The responsibility, if any, for repayment to other governmental entities lies with Ms. Tucker. The Secretary was simply permitting the County to offset pay- ments that it may have already made to Ms. Tucker from other sources after the layoff. The ALJ’s order concerning Ms. Tucker will be af- firmed, VIL. In conclusion, the petition for review is denied with reference to the issues regarding (1) the Seeretary’s juris- App. 34 diction, (2) the maintenance-of-effort violations, (3) the disallowed costs under CETA Title VI for the 17 in- eligible participants, and (4) the backpay award for Ms. Tucker. With regard to the record review, the petition for review is granted in part and the ease is remanded for further proceedings consistent with this opinion. IT IS SO ORDERED. Correy, Circuit Judge, concurring in part and dis- senting in part. I concur in the majority’s well-reasoned analysis that the 120-day time limit set forth in 29 U.S.C. §816(b) is not a jurisdictional bar to actions taken by the Seeretary of Labor after expiration of the 120-day time limit. I further concur in Sections [V, V, and VI of the opinion. However, Iam unable to agree with the majority’s resolution of the alleged ‘‘Maintenance of Efforts’’ violations discussed in Section III of the opinion. Although I agree that the ma- jority is correct in using 1976 as the ‘‘benchmark’’ for pur- poses of analyzing whether or not there has been a ‘‘ Main- tenance of Efforts’ by county officials in funding the local job training programs, I cannot agree that the County should be liable for the entire.amount of the ‘‘shortfall’’ in funding since the County enacted cost-saving measures in 1977 that explains, in part, why their funding in 1977 did not match their spending efforts in 1976. Thus, I would remand this case to the administrative law judge for an accurate determination of the ‘‘shortfall’’ in local funding. As set forth in the majority opinion, the non-federal funding of the local job training program for the general welfare recipients from 1976 through 1978, (the vears in App. 35 question) was $3,014,580 in 1976, $2,097,428 in 1977, and 2,732,487 in 1978.' In 1977, CETA began to fund various job training programs for general welfare recipients in Milwaukee County, budgeting approximately $1 million in 1977 for the LTE program and approximately $2.4 million for the HSH program from July 1, 1977 to June 30, 1978. These programs, local and CETA, were geared toward training general assistance welfare recipients for future employment in the private sector. Congress in enacting the CETA program sought to create new employment and training opportunities for welfare recipients. See 20 C.F.R. §675.1(a) (1979). In order to ensure that CETA funds were not used to replace local funding, Congress promulgated rules prohibiting ‘*the substitution of l’ederal funds for other funds in con- nection with work that would otherwise be performed’’ by local government entities and providing for annual audits conducted by the Secretary of Labor. See, e.g., 29 U.S.C. §845(e)(a) (25) (1976); 29 U.S.C. §848(a)(1) (1976); 29 C.F.R. §99.84(b) (3). In this manner, Congress sought to ensure that local communities maintain their effort in pro- viding job training programs when the CETA funding be- came available. The majority chooses the funding level provided in 1976 as the ‘‘benchmark’’ or focal point to de- termine if Milwaukee County maintained their funding of local job training programs once CETA funds became available. It is proper to use 1976 as the focal point for 1 In 1978, the County’s job training program, PWFP, was elim- inated; the County established a job-training program entitled the Work Assistance Program (“WAP”), that was funded by the County and the State in the amount of $2,732,487. CETA’s con- tribution to the WAP program was approximately $200,000. App. 36 purposes of comparison since 1976 is the year prior to CE'TA funds becoming available for job training programs for the general welfare assistance population in Milwaukee County. In 1976, the level of non-federal spending was $3,014,580, while in 1977, the year CETA funds became available, the non-federal funding dropped to $2,097,428, and rose slightly in 1978 to $2,732,487. However, based upon these figures alone, the majority coneludes that there was a ‘‘shortfall’’ in the effort by the County to train workers under its programs. The majority agrees with the AL.J’s finding that the County is responsible for the entire difference in funding, totaling $1,199,245; but the majority fails to consider much less weigh any information as to how and why these figures necessarily differ. At least as a starting point for the purpose of analysis in establishing whether or not the County had maintained its efforts in the local job-training programs, it is proper to compare the level of spending between the years 1976, 1977 and 1978, and assessing the County $1,199,245 for the alleged CETA violation would be appropriate if the County was in fact unable to explain the reduced funding in its local program. However, for some unknown reason, the ALJ and now the majority fail to consider that the County, beginning in late 1976 and through 1977, instituted cost-saving measures in its local job-training program when it reduced the workers’ wages and hours, and thus the majority and the AL.J disregard the County’s sincere efforts to operate the most cost-efficient program possible. Specifically, relying on National League of Cities v. Usery, 426 U.S. 833 (1976), overruled Garcia v. San Antonio Met- U.S. , 105 S.Ct. 1005 ropolitan Transit Authority, (1985), the County reduced the wages and cut the hours of » App. 37 participants in its job training programs in an honest at- tempt to save taxpayers some expense in providing these programs. As the majority notes, these cost-saving meas- ures saved the County approximately $850,000 in 1977 and as the majority admits, this figure represents 93 percent of the shorifall in fund'ag during 1977. However, the ma- jority refuses to take this into account in computing the potential liability of the County, and instead applies a simplistic analysis using only the gross funding figures without any inquiry whatsoever into the number of work- ers employed in the loeally funded programs during the years in controversy, 1976 through 1978. This analysis penalizes the County for instituting cost-saving measures to save taxpayer’s hard-earned dollars. The majority boldly asserts that ‘‘the proper response to the wage and hour reduction after National League of Cities would have ** been the creation of more PF WP positions ....’* Thus, the maj rity’s position is that the only way the County could avoid liability was to have increased its efforts in training more general assistance welfare recipients than it was training in the previous year. But Unis position does not espouse a maintenance of effort, consistent with the requirement that federal funds not be substituted for work that ‘‘would otherwise be performed’* by the County, rather it requires the County to heve increased its job training efforts with the employment of more workers and to have spent funds at previous year’s levels regardless of whether or not it was the most cost-efficient use of tax- payer dollars. The County, on the other hand, logically argues that it maintained its efforts in training general welfare recipients in not transferring any workers em- ploved in the PWFP program to the CETA funded pro- grams and in replacing those workers who left the local App. 38 program, after their training was completed, with persons on the waiting list. Because the ALJ failed to make spe- cific findings as to the number of welfare recipients em- ployed in the program at any given time this case must in ail fairness be remanded to the trier of facet to complete the record for proper review. Nevertheless, the majority penalizes the County for enacting cost-saving measures when it adopts the position that the County, with the sav- ings accumulated through pay-cuts, was required to use the savings to employ more general assistance welfare recip- ients in its own program. The majority fails to cite, nor could | discover, any case law to support this gratuitous theory of federal meddling in a local budgetary decision. Because the record before us is sparse and unclear as to the number of workers actualiy employed in the County job-training programs for the years in question, see ma- jority n.11,? this ease should be returned to the ALJ to determine what portion of the County’s ‘‘shortfal!’’ in funding is explained by the County’s legitimate cost- saving measures. Further, the ALJ should determine whether the County, in instituting the reduced wages and shorter hours, was able to employ more trainees or employ persons in the program for a longer period of time; thus, enabling these persons to gain more experience and re- main off the assistance roles. I am convinced that in fair- ness to the community which implemented cost-saving measures to benefit its taxpayers, that the community should not be responsible for reimbursing the federal gov- ernment for any amount of money resulting from these 2 The record-contains evidence that the number of workers employed in PWFP ranged anywhere from 250 to 682 toward the end of 1977. as sinatiaba tee neeneenmceaitaae eaten App. 39 cost-saving efforts. In this era of reductions in govern- ment deficit spending and increased government economy caused by bureaucratic mismanagement of the past, the majority decision penalizes a community that effectuated cost-saving and cost-efficient programs for the benefit of the welfare recipients and the taxpayers as well. Thus, I respectfully dissent from Section III of the opinion. A true Copy: Teste: Clerk of the United States Court of Appeals for the Seventh Circuit App. 40 United States Court of Appeals lor the Seventh Cireuit Chicago, Illinois 60604 August 26, 1985. Before Hon. JESSE KE. ESCHBACH, Cireuit Judge Hon. JOHN L. COFFEY, Circuit Judge Hon. ROBERT A. GRANT, Senior District Judge* MILWAUKEE COUNTY, WISCONSIN, Petitioner, No. 84-1067 VS. WILLIAM EK. BROCK, SECRETARY OF THE UNITED STATES DEPARTMENT OF LABOR, Respondent. Petition for Review of an Order of the United States Department of Labor ORDER On consideration of the ‘‘MOTION FOR ORDER AMENDING PANEL OPINION”? filed herein on August 16, 1985, by counsel for petitioner, IT IS ORDERED that said motion is GRANTED. The following sentence, which appears on page 21 in the * The Honorable Robert A. Grant, Senior District Judge for the Northern District of Indiana, sitting by designation. : App. 41 second paragraph of footnote 11 of the opinion issued August 6, 1985, in the above-captioned case is deleted: ‘‘We also note that the County, presumably be- cause of an inadvertent mathematical error, overstated in its reply brief the amount of this ‘savings’ by 80% (i.e., $682,000).”’ App. 42 United States Court of Appeals For the Seventh Cireuit Chicago, Llinois 60604 August. 6, 1985 Before Hon. JESSE KE. ESCHBACH, Circuit Judge Hon. JOHN L. COFFEY, Cireuit Judge - Hon. ROBERT A. GRANT, Senior District Judge* MILWAUKEE COUNTY, WISCONSIN, Petitioner, No. 84-1067 vs. RAYMOND J. DONOVAN, SECRETARY OF THE UNITED STATES DEPARTMENT OF LABOR, Respondent. Petition for Review of an Order of the United States Department of Labor This cause was heard on the reeord from the United States Department of Labor, and was argued by counsel. On consideration whereof, IT IS ORDERED AND ADJUDGED by this Court that the petition for review of an order of the Department of Labor is DENIED IN PART, GRANTED IN PART, and the case is REMAND- ED. in accordance with the opinion of this Court filed this date. No costs are awarded in this Court. * The Honorable Robert A. Grant, Senior District Judge for the Northern District of Indiana, sitting by designation. App. 43 United States Court of Appeals For the Seventh Cireuit Chicago, Llinois 60604 September 9, 1985. Before Hon. JESSE E. ESCHBACH, Circuit Judge Hon. JOHN L. COFFEY, Circuit Judge Hon. ROBERT A. GRANT, Senior District Judge* MILWAUKEE COUNTY, WISCONSIN, Petitioner, No. 84-1067 VS. WILLIAM E. BROCK, SECRETARY OF THE UNITED STATES DEPARTMENT OF LABOR, Respondent. Petition for Review of an Order of the United States Department of Labor ORDER On consideration of the petition for rehearing and : suggestion for rehearing en bane filed in the above- entitled cause by petitioner, no judge in active service has requested a vote thereon, and all of the judges on the * The Honorable Robert A. Grant, Senior District Judge for the Northern District of Indiana, sitting by designation. alist App. 44 original panel have voted to deny a rehearing. . Act as specified in £98.29 of this es 6a The regulations effective April 3, 1979 that apply to some of these matters are 20 C.F.R. 676.25-4, 676.26-1, and 676.27. App. 66 \ to workman’s compensation, public liability insurance, paid holidays, 22 hours vacation per year, 22 hours sick leave per year and medical services from the County Medical Complex with a delayed payment system. However, more generous benefits were provided to JVS employees cov- ered under the collective bargaining agreement with AFSCME. These included 12-25 vacation days per year, depending on length of service, 144 working days per month medical leave, hospitalization and medical surgical coverage, iife insurance, a pension plan, 10 holidays, 4 or 5) personal days per vear, depending on length of services, leaves of absence, unemployment insurance, workman’s compensation insurance, automobile liability insurance and professional liability insurance. The Grant Officer’s initial determination ordered the County to classify all work experience jobs in WAP by job titles, duties, responsib'lities and supervision, deter- mine the proper wage and benefits under the regulations, and submit the results to the Regional Office for review. The Grant Officer’s final determination modified the cor- rective action to require the County to notify all former CETA participants, by mail and newspaper advertising, to submit claims if they believe they were underpaid. The Worker Rights Institute conld also submit specifie docu- mentation on individual participants’ pay. The claims would then be reviewed by an outside agency, such as the State Job Service or a contractor approved by Region V, DOL, and the ageney would notify each participant of the results of its review and the right to appeal to the Office of Administrative Law Judges. Costs both for the record review and baek wages could be paid from CETA funds. The prime sponsor did not appeal the Grant Officer’s final App. 67 determination. The Complainants did appeal the corree- tive action ordered in the final determination, but pot the findings of fact or conclusions of law upon which it was based, since they felt that the burden of determining the proper wages and benefits should more appropriately be placed upon the prime sponsor inst2ad of the individual CETA participants. At the hearing the Complainants introduced a con- siderable amount of evidence concerning wages actually paid to WAP participants, as well as some evidence re- lating to comparable wages in the community and some evidence as to the type of wage records WAP consortium agencies maintained for CETA participants. However, the record definitely lacks the type of detailed evidence needed to permit me to establish the proper wage for each of the approximately 5,400 participants enrolled in WAP between July 1, 1977 and April 1, 1979 (when the regula- tions changed to permit payments of the minimum wage in almost all work experience positions). The evidence showed that at the beginning of the WAP program all participants were paid the minimum wage only. However, there was other evidence that a few WAP participants were paid more than the minimum wage. Mr. Obletz testified that beginning in October 1978, if a par- ticipant in a production training area of JVS produced enough on a piece rate to earn more than the minimum wage, he was paid the minimum wage from CETA funds plus a supplementary check from non-CETA sources for the additional amount earned. However, according to Messrs. Galazan and Lutzow, this was a rarity and Mr. Dolberg testified that no WAP participants in the food App. 68 services area were paid more than the minimum wage. At the other WAP agencies, the participants from Goodwill, Curative and De Paul Sertoma interviewed by Ms. Lorman, a DOL investigator, in late 1978 were all paid minimum wage. ‘Testimony from Goodwill employees indicated that at some later date CETA checks for 22 hours at minimum wage were sometimes supplemented by Goodwill, either for additional pay based on an incentive piece rate, or for additional hours. At Curative, participants could be paid above the minimum wage from non-CETA funds if their production leve! s» warranted, but the evidence indicated that no wage supplementation occurred at De Paul. According to Ms. Powers, the CETA Director, the prime sponsor itself never classified jobs at the worksites in order to set appropriate wage rates for either PSE or work experience participants, but instead left that task up to each employing agency. The prime sponsor approved WAP subgrants which were budgeted on the basis of mini- mum wage and it had no set standard on how additional wages would be funded. The practice apparently varied hetween agencies and over time, and there was no evidence that the prime sponsor ever established or enforced a uniform poliey based on anything other than minimum wage, The evidence also showed that the WAP consortium agencies kept detailed individual records on the production of each WAP participant assigned to a production train- ing area which permit an individualized wage determina- tion based on piece rate times productivity. Piece rates were established based on a community norm for similar work, which could be based on a time study of staff pro- ot App. 69 auctivity and/or information from the State Job Service or private employers. This system relied on the methed- ology used to calculate wages for handicapped clients 1 sheltered workshops, who may be paid less than minimum wage under certain conditions established by DOL’s Em- ployment Standards Administration. No comparable ree- ords were maintained for participants in nonproduction areas, althorgh at JVS, evaluation forms were used to estimate a percentage of the community norm at which each participant was functioning. There was some evidence as to community wage rates for comparable work. With respect to food service wages, Albert Grant, who provided senior citizens meals to the County in competition with JVS, testified he paid his em- ployees minimum wage plus workmen’s compensation and unemployment compensation with a possible 50 cents an hour raise after 6 months on the job. There was other evidence on private industry wage rates from four com- panies in the Milwaukee area: EK. KR. Wagner, Ben Turick, Allen Bradley, and General Electric. Each of these had had subcontracts with one or more of the WAP consortium agencies. However. this evidence was not sufficiently spe cifie to show that any particular group of CETA partici- pants had performed a task identical to that performed by regular com)any employees at a specified wage rate. As in the case of eligibility requirements, the regula- tions governing wages vary from title to title of CETA. Since the Title III (YETP) regulations expressly en- courage payment of the minimum wage ‘‘whenever fea- sible,’’? Title III wages are not in controversy. For Title Vi projects, wages must be the highest of the rates speci- App. 7€ fied in 29 C.FLR, 95.33 (d) (4) (viii) or ‘‘the prevailing rates of pay for persons employed in similar occupations by the same employer.’? 29 CFR 99.37(e). As applied to WAP, persons similarly employed by the same employer could include handicapped clients, PSE’s, or ageney staff, a de- termination which would have to be made on a case-by-case basis. It should be noted that under this regulation, only jobs within the same employing agency may be compared, and thus wages at outside firms, such as Allen Bradley or G.I... are irrelevant. Under 29 CFR 95.33(d) (4) (viii), which applied to Titles | and VI (if higher than the alternative just men- tioned), wages ‘shall be commensurate with the type of work performed, tle geographic region of the program, and the skill proficiency of the participant,” with the mini- mum wage as a floor. This standard does allow for com- parisons with the private sector in the community. For example, if entry level food service wages in the Milwaukee area are generally minimum wage, it would be acceptable to pay minimum wage to work experience parficipants doing the same type of work. Another example is the G.E. line. If WAP participants performed the same work as ‘*B” assemblers at the local G.E. plant, at the same level of skiil and speed, they should be paid a commensurate wage. On the other hand. if they only packed rather than assembled an item; or performed a task by breaking it down into a series of simple operations each done by one person; or worked only half as fast, or were allowed twice as many mistakes, or required 3 times as much super- vision, they should probably be paid less. The evidence in this ease does not contain the detailed information fe- App. 71 quired for me to be able to make such individual wage determinations. With respect to benefits, the applicable regulation for all 3 titles is 29 CFR 98.24(b), the so-called ‘‘ equal bene- fits’? regulation. Applying this regulation involves identi- fying similarly employed employees of the same employer, whose benefits must also be afforded to CETA partici- pants. The regulation lists certain factors to be considered in making this determination: employment status, type of work performed, job classification, and method of ap- pol..tment to the position. Again, the evidence ix this case is not sufficient for me to make this determination for each of WAP’s work experience positions. As a matter of fact, there was evidence that, at JVS, at least WAP partici- pants were vot similarly emploved to regular JVS staff and PSE’s. In this case, in my opinion, the remedy proposed by the Grant Officer in his initial determination is far more appropriate than that contained in his final determina- tion. the initial determination placed the burden of evalu- ating jobs and caleulating wages on the prime sponsor, which could have avoided the problem by following the regulations in the first place, and which has better access to the necessary information than former participants.’ *During the hearing there was evidence that the consortium agencies had records confirming the details of the work per- formed, the specific content and nature of the work, the dura- tion of each contract, the number of units in the contract, the cost of the contract, the number and name of each person work- ing on each contract, the hours they spent on each contract and their rate of production. Also maintained was the location of (Continued on following page) App. 72 Therefore, that port [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385018_1276%3A1. Public record. Not legal advice.