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COMMONWEALTH PENNSYLVANIA v. SCHOOL DISTRICT PHILADELPHIA (02/13/80)

decided: February 13, 1980.

COMMONWEALTH OF PENNSYLVANIA, DEPARTMENT OF PUBLIC WELFARE, PETITIONER
v.
SCHOOL DISTRICT OF PHILADELPHIA, RESPONDENT



Appeal from the Order of the Board of Arbitration of Claims in case of School District of Philadelphia v. Commonwealth of Pennsylvania, Department of Public Welfare, Docket No. 413.

COUNSEL

David J. DeVries, Deputy Attorney General, with him James R. Adams, Chief Counsel, Paul Schilling, Deputy Attorney General, Norman T. Watson, Deputy Attorney General, and Gerald Gornish, Attorney General, for appellants.

Andrew M. Rosen, Assistant Counsel, with him Roberta Griffin Mason and Eugene F. Brazil, General Counsel, for respondents.

Judges Wilkinson, Jr., Rogers and MacPhail, sitting as a panel of three. Opinion by Judge MacPhail. Judge Rogers concurs in result only. Judge DiSalle did not participate in the decision in this case.

Author: Macphail

[ 49 Pa. Commw. Page 317]

This is an appeal from an order of the Board of Arbitration of Claims (Board), now the Board of Claims, awarding a judgment of $464,076.75 in favor of the School District of Philadelphia (Claimant) and against the Pennsylvania Department of Public Welfare (DPW). We reverse.

[ 49 Pa. Commw. Page 318]

Under date of April 1, 1970, Claimant and DPW entered into a contract under which Claimant agreed to provide day care services*fn1 in exchange for reimbursement of 75 Percent of Claimant's actual expenditures up to the limit of each major budget category specified in the contract. Under the contract Claimant was entitled to exceed a budget category by 10 percent with prior DPW approval, provided that the total budget was not exceeded. On expiration of the contract Claimant was to return excess monies to DPW. By the terms of the contract DPW agreed to pay Claimant in advance on the basis of monthly invoices estimating Claimant's needs. Beginning with the third month of the contract Claimant was obligated to submit monthly statements of actual expenditures and the monthly invoices were adjusted to take into account the difference between advanced payments and actual expenditures. At the expiration of the contract on June 30, 1971, Claimant had exceeded neither the budget category for staff costs nor the total budget.

On September 21, 1971, Claimant's Board of Education authorized its superintendent to pay retroactive salary increases to certain staff members and on November 19, 1971, pursuant to the Board's resolution, the sum of $502,900.00 was paid to those employees for the contract year 1970-71. In addition, the retroactive raise resulted in an increase of employee benefits of $62,863.00 and administrative costs of $53,006.00. Some time thereafter*fn2 Claimant submitted a final invoice

[ 49 Pa. Commw. Page 319]

    for the 1970-71 contract year including adjustments for food expenses and for the retroactive salary increases. DPW reimbursed the former but refused to reimburse the latter. Claimant subsequently successfully sued before the Board to recover the portion of the salary increase reimbursable by DPW under the terms of the contract.

DPW contends here as it did before the Board that (1) the claim was untimely filed and (2) it was not obligated under the contract to reimburse Claimant for the retroactive salary increase. DPW argues that the Board erred as a ...


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