School District Number Five v. South Carolina Department of Social Services

320 S.E.2d 451, 283 S.C. 110, 1984 S.C. LEXIS 354

• Court: Supreme Court of South Carolina
• Decided: September 10, 1984
• Docket: 22164
• Status: Published

Opinions

Littlejohn, Chief Justice:

At issue in this appeal is whether School District Number Five of Anderson County is obligated to repay the South Carolina Department of Social Services the sum of $14,517. The dispute arises over the construction of a contract whereby the Department agreed to provide funds to the School District for day care services for school children in the District. There are twenty schools in the District of which one is Perry.

The issue was first tried before an administrative board called The Fair Hearing Committee. It determined that the School District had been over paid and ordered the District to reimburse the Department. This administrative determination was appealed to the Court of Common Pleas of Anderson County. The circuit judge, holding that the Committee’s determination was not sustained by substantial evidence, reversed the Committee. It is from this ruling of the Circuit Court that the appeal is submitted. We reverse.

Under the terms of the contract, the School District submitted a claim for reimbursement basically for payment of meals. The District is supplied (1) with funds by grants received by the federal government under Title IV-A and XX of the Social Security Act; (2) with funds from the Appalachian Regional Council; (3) with funds collected as fees for day care services; (4) with funds collected from children in the project; and (5) with funds from the United States Department of Agriculture paid as flat-fee per meal payments.

As a result of an audit made by the Department, it was determined that the Perry School had shown a profit and that it had received from various sources more money than it had expended for meals. This was largely because the children at Perry School are young and consume less food than the older children in the other schools.

The judge correctly held in his order, and it is not disputed, as follows:

Certainly, the Committee was correct in determining that Respondent is permitted to offset or reduce its reimbursements to an agency electing to purchase services under the Social Security Act by applicable credits, including federal funds received by or available from sources other than the grant program financing its operation. See 45 C.F.R. Part 74, app. C. Sec. C(3)(a), (b).

We think, however, that he erred when he continued by saying:

If, however, the agency does not apply all of the funds received from another source to the cost of services funded by the Social Security Act and properly applies them elsewhere, the funding body, here Respondent, [Department] cannot deduct those, not applied to reduce program costs, as applicable credits.

We are of the opinion that the judge erroneously treated the issues as disputed ones of fact in applying the substantial evidence rule. The question is solely one of law and the circuit judge erred in not so holding.

The order of the lower Court is

Reversed.

Ness, Gregory and Harwell, JJ., concur.